S&P 500 Equity Risk Premium Considering the substantial decline in the equity risk premium, which currently stands well below its historical average, should investors approach U.S. equities with caution? Image: BofA US Equity & Quant Strategy
PMI vs. Equity Risk Premium The divergence between the ISM PMI and the equity risk premium is significant. Image: Morgan Stanley Research
Valuation – S&P 500 P/E, S&P Equity Risk Premium and U.S. 10-Year Treasury Yields Significant multiple expansion in the absence of a corresponding increase in earnings growth can generally be a warning sign that U.S. stocks are getting too expensive. Image: Morgan Stanley Research
Stocks – MSCI EMU Earnings Yield Minus Real 10-Year Bund Yield (Equity Risk Premium) The equity risk premium below its 10-year average does not bode well for eurozone stocks. Image: Gavekal, Macrobond
U.S. Equity Risk Premium vs. ISM Manufacturing and ISM Services The equity risk premium is likely to rise if a U.S. recession occurs this year. Image: Goldman Sachs Global Investment Research
12-Month Forward S&P 500 Equity Risk Premium The equity risk premium should rise as a recession is likely in the United States. Image: BCA Research
S&P 500 Equity Risk Premium – Consensus Bottoms Up Earnings Yield – 10-Year Treasury Yield Can U.S. Treasury bonds be considered more attractive than U.S. stocks at present? Image: Morgan Stanley Research
Equity Risk Premium – Change in ERP vs. 24-Month Lows Will the equity risk premium rise in 2023 as a U.S. recession is likely? Image: BofA US Equity & Quant Strategy
Equity Risk Premium (ERP) – S&P 500 Earnings Yield Minus 10-Year Treasury Yield The S&P 500 looks attractive relative to bonds. Image: Truist
S&P 500 Equity Risk Premium and VIX The equity risk premium is sensitive to changes in the VIX. Image: Morgan Stanley Research
S&P 500 Equity Risk Premium vs. U.S. Agg OAS Spread to Treasuries The S&P 500 equity risk premium remains too low relative to IG credit spreads. Image: Morgan Stanley Research