Market-Implied Fed Funds Rate and 2-Year U.S. Inflation Swap Current market pricing of Fed rate cuts indicates a pivot from inflation worries to growth concerns, suggesting investors expect the Fed to prioritize economic stability over aggressive inflation control. Image: Deutsche Bank
Equity Sector Returns While large-cap growth stocks, particularly those in the Magnificent 7, performed strongly in 2024, there was also a significant shift toward value sectors throughout the year, reflecting broader economic resilience. Image: J.P. Morgan Asset Management
U.S. M2 to Nominal GDP Ratio The return of the U.S. M2 to nominal GDP ratio to its long-term trend is a positive indicator. It reflects a healthier balance between money supply and economic output, fostering stability and sustainable growth in the economy. Image: Federal Reserve Bank of St. Louis
MSCI World EPS The decline in MSCI AC World EPS consensus estimates for 2025 reflects a cautious stance among analysts as they navigate an uncertain economic landscape marked by slower growth and sector-specific challenges. Image: Goldman Sachs Global Investment Research
S&P 500 Ratio to Stoxx 600 The S&P 500’s performance relative to the Stoxx 600 has hit the upper limit of its long-term channel. While U.S. equities may continue to lead due to strong growth potential, economic shifts could alter this trend. Image: Deutsche Bank
S&P 500 Price Forecast JPMorgan has shifted to a bullish outlook on U.S. stocks, setting a 2025 year-end S&P 500 target of 6,500, driven by U.S. economic strength, AI sector growth, a robust labor market, and monetary easing by central banks. Image: Bloomberg
Indexed Return of Cyclicals vs. Defensives ex. Commodities and ISM Manufacturing Index U.S. equity sector rotations are pricing in a “no landing” economic scenario, where the U.S. economy avoids both recession and significant slowdown, maintaining steady growth instead. Image: Goldman Sachs Global Investment Research
Performance – Cyclicals Outperformance Following the election, U.S. cyclical stocks have significantly outperformed, reflecting investor optimism about the new administration’s pro-growth policies and economic resilience. Image: Morgan Stanley Research
CEO Business Confidence Expectations for Economy The current landscape suggests a cautious yet optimistic outlook among CEOs, which could lead to increased economic activity and investment as businesses prepare for potential growth. Image: Goldman Sachs Global Investment Research
MSCI Cyclicals/Defensives Return During anticipated economic expansions, investors lean towards cyclical stocks for their growth potential, while defensive stocks serve as a buffer during economic downturns. Image: Goldman Sachs Global Investment Research
MSCI World Fwd PE and EPS Revisions Downward revisions in global EPS raise concerns, suggesting that the global economic landscape is precarious, prompting central banks to adopt more aggressive strategies to stimulate growth. Image: J.P. Morgan