Earnings Growth – S&P 500 Historical Operating and Normalized EPS The U.S. stock market needs earnings growth to rise in 2021 and 2022 as the global economy recovers. Image: BofA US Equity & Quant Strategy
Rolling 10-Year Annualized Real GDP Growth vs. Total Return for S&P 500 Index Chart suggesting that the U.S. stock market can ignore the economy for long periods of time. Image: Bloomberg
Aggregate EPS Growth U.S. earnings are outperforming the rest of the world in Q1:2020, because the U.S. was the slowest to lock down its economy. Image: Deutsche Bank Asset Allocation
Prediction for Near-Term S&P 500 Downside to 2,000 Goldman Sachs suggests that equity markets are unlikely to make new lows, if the U.S. doesn’t have a second surge in infections after the economy reopens. The year-end S&P 500 target remains 3,000. Image: Bloomberg
Inequality – Monthly Income After Tax Minus Average Monthly Expenditures Greatest economy ever? Despite increasing wage growth and a low unemployment rate, half of the U.S. population spends more than their income. Image: Deutsche Bank Global Research
Share of World GDP U.S. consumption alone accounts for around 17% of word GDP, a larger share than the entire Chinese economy. Image: Deutsche Bank Global Research
S&P 500 Total Return Change During Economic Expansions The current business cycle is the longest and weakest expansion. The next downturn could hit the U.S. stock market much harder than the economy. Image: Irrelevant Investor LLC
Productivity: How Productive is an Hour of Work? An hour’s work in Ireland contributes $102.3 to the economy, while in the U.S., this contribution is on average $72.1 Image: Statista
Global Nominal GDP After the U.S., China is the world’s second largest economy. Its nominal GDP represents 16% of world GDP, compared to 24% for the United States. Image: Scotiabank