Valuation – S&P 500’s CAPE Ratio and U.S. GDP Growth The S&P 500’s CAPE ratio is currently high relative to U.S. GDP growth, potentially indicating lower expected returns in the future. Image: Deutsche Bank
DM Economies Real GDP and Working Age Population CAGR The working-age population plays a pivotal role in driving economic growth and productivity. However, many developed nations face a projected decline in this demographic, potentially hindering their economic prospects. Image: Deutsche Bank
U.S. Private Sector Financial Assets % of GDP The growing disconnect between U.S. financial asset values and GDP raises concerns about the widening wealth gap, potential systemic risks, economic instability, and policy challenges. Image: BofA Global Investment Strategy
S&P 500 Valuation – Real Market Capitalization to Real GDP Ratio The inflation-adjusted market capitalization to GDP ratio is a valuable tool to evaluate the U.S. stock market’s valuation. The high current ratio implies a potential overvaluation. Image: Real Investment Advice
Modeled Forward Russell 2000 Returns Conditional on Coincident Real U.S. GDP Growth The performance of small-cap stocks is linked to economic conditions. Weak U.S. economic growth may affect their returns, while strong growth offers potential for solid returns. Image: Goldman Sachs Global Investment Research
U.S. Nominal GDP Less Government Budget Deficit While fiscal spending in the United States has the potential to boost GDP growth, it is important to carefully consider the long-term implications and trade-offs associated with such policies. Image: Morgan Stanley Wealth Management
U.S. Budget Deficit as a % of GDP The trend of elevated deficits and increasing debt can have potential long-term implications for the U.S. economy. Image: BofA Global Investment Strategy
Advanced Economies – Household Sector Credit To GDP Are household balance sheets a potential source of risk? Image: BCA Research
U.S. Fiscal Stimulus as a Percent of GDP The chart shows the impact of the Trump fiscal stimulus on U.S. economic growth until 2021. You may also like “Despite Full Employment, Why Real GDP Should Stay Above Potential GDP?“ Image: ClearBridge Investments
U.S. Output Gap and Inflation This chart shows that actual U.S. GDP is higher than potential GDP. Historically, a positive output gap leads to inflation. Image: Richardson Wealth
U.S. Economy Has Prospered While Europe Has Slowed This chart shows how the US economy is strong compared to European countries. And despite full employment, US real GDP should stay above potential GDP. Image: Financial Times