S&P 500 vs. U.S. Corp Investment Grade All Sectors OAS A widening OAS for investment grade debt is typically a bearish signal for U.S. equities. That’s not what stock bulls want to see. Image: TS Lombard
Valuation Percentile for Equity, Credit and Bond Valuations matter more over the medium term than in the moment. In years like 2025, robust growth let markets climb anyway, powered by rising profits despite high price tags. Image: Goldman Sachs Global Investment Research
U.S. Equity Volatility vs. Credit Volatility Credit markets are calm, with volatility running below its long-term average, but equity volatility tells a different story, pointing to a more anxious tone in stocks. Image: Fundstrat Global Advisors, LLC
S&P 500 Index The current rally is underpinned by solid employment data and improving trade sentiment. If the S&P 500 can sustain levels above 6,000, the only major resistance ahead is the all-time high near 6,150. Image: Bloomberg
Probability of U.S. Recession As Priced Across Asset Classes The S&P 500 is pricing in about a 25% chance of a recession, which is lower than signals from copper prices or the yield curve, but higher than the recession probabilities implied by global equities or high-yield credit markets. Analysts often use the current percentage change…
Fed Balance Sheet The ongoing reduction of the Fed’s balance sheet is expected to reduce bank reserves. This reduction may lead to higher inflation, increased real yields, and a steeper yield curve. Image: TS Lombard
U.S. Money Market Fund Assets U.S. money market fund assets hit a new all-time high of $8.2 tn, reflecting a continued trend of investors seeking safety and yield. Image: Goldman Sachs Global Investment Research
Bonds Flows Since January 2024, there has been a notable trend of strong inflows into bond ETFs, particularly high-yield bonds, driven by favorable yield conditions and an overall “risk-on” sentiment in the market. Image: J.P. Morgan
Flows into Money Market Funds Investor interest in U.S. government money market funds continues to be strong, driven by their current attractive yields, high level of safety and liquidity. Image: Goldman Sachs Global Investment Research
U.S. Dollar vs. Japanese Yen (USD/JPY) When yields on U.S. Treasury bonds are higher than those on Japanese government bonds, it can lead to a weakening of the Japanese yen relative to the U.S. dollar. Image: BCA Research
FMS Investors – Net % Expecting Lower Long-Term Rates Only 38% of FMS investors expect bond yields to decrease, while the majority anticipate stable or potentially higher bond yields. Image: BofA Global Fund Manager Survey