U.S. Fed Funds Target Rate While “panic rate cuts” have historically been associated with negative market outcomes, the current context suggests that Wall Street may be embracing these cuts as necessary adjustments rather than signs of economic distress. Image: BofA Global Investment Strategy
Probability of Negative Returns, Based on S&P 500 Total Returns from 1929-Present Extending the investment time horizon allows investors to minimize U.S. equity losses, navigate short-term market fluctuations, and leverage the long-term growth potential of equities. Image: BofA US Equity & Quant Strategy
Average Annualized 1-Month Real Total S&P 500 Return and U.S. Unemployment Rate While a low U.S. unemployment rate is generally a positive indicator for the economy, very low unemployment rates can be seen as a negative for U.S. stocks. Image: BCA Research
S&P 500 Average Negative Sentiment Score YoY vs. Quarterly EPS YoY (Leading Indicator) The significant increase in corporate sentiment indicates a potential recovery in earnings, which is good news. Image: BofA Global Research
Gold vs. 10-Year U.S. Real Rate Gold tends to be negatively correlated with U.S. real interest rates. Is gold at risk of price decline? Image: Morgan Stanley Wealth Management
U.S. Recession – 3-Month T-Bills Minus 12-Month CPI Inflation and 10-Year Treasury Rate Minus 12-Month CPI Inflation Historically, there has never been a recession in the United States with negative real interest rates. Image: Gavekal, Macrobond
S&P 500 Forward EPS vs. Fed Funds Rate When forward EPS growth goes negative, the Federal Reserve typically does not hike rates. Image: Morgan Stanley Research
Global Negative Yielding Debt The transition from $18 trillion to zero in negative-yielding debt over the past few years reflects a broader shift away from the era of ultra-low interest rates and easy monetary policy. Image: BofA Global Investment Strategy
Rates – U.S. 10-Year Real Interest Rate How long will real U.S. 10-year interest rates remain negative? Image: BofA Global Investment Strategy
Interest Rates – Global Rate Cuts vs. Global Rate Hikes Could global rate hikes have a significant negative impact on markets? Image: BofA Global Investment Strategy
S&P 500 24-Month Forward Dividend Yield vs. U.S. 10-Year Rates Negative real rates are still supporting U.S. equities. Image: Goldman Sachs Global Investment Research