Valuation – Shiller P/E and U.S. 10-Year Yield Sure, U.S. equities are expensive, but inflation and debt worries make bonds no easy refuge either. The smart move now? Stay selective, not scared. Image: Goldman Sachs Global Investment Research
Fed Funds Rate and 10-Year U.S. Treasury Yield The S&P 500’s record-breaking rally shows no signs of cooling, with market participants now positioning for another Fed rate cut on October 29 to fuel the next leg higher. Image: Goldman Sachs Global Investment Research
Survey – 10-Year U.S. Treasury Yields While expectations tilt toward falling 10-year U.S. Treasury yields, plenty of voices argue for a rise, citing everything from sticky inflation to uncertain rate cuts and uneven economic growth. Image: Deutsche Bank
U.S. High Yield Credit Spreads Tight high-yield spreads signal strong market confidence, but they also raise red flags by potentially masking underlying vulnerabilities and feeding investor complacency by making risks seem less significant than they are. Image: Topdown Charts
U.S. 10-Year Real Yield (TIPS) The recent decline in U.S. 10-year real yields points to growing investor caution, with labor market softening fueling bets on more Fed easing ahead. Image: Deutsche Bank
U.S. 2-Year Treasury Yield vs. Fed Funds The current 2-year U.S. Treasury yield, which is below the fed funds rate, signals that monetary policy is restrictive. It also implies the Fed is about 80 basis points behind the curve in cutting rates. Image: Real Investment Advice
S&P 500 Buyback Yield While S&P 500 share buybacks remain significant, their impact on reducing share counts and boosting returns to shareholders is diminishing compared to past years. Image: Goldman Sachs Global Investment Research
Average and Median Monthly 10-Year U.S. Treasury Yield Change Since 2000 U.S. Treasury bond yields typically increase in September and October due to a surge in bond supply after the summer lull, combined with market influences like policy shifts and investor repositioning. Image: Deutsche Bank
10-Year U.S. Treasury Yields with Various Moving Averages When the Fed prioritizes the labor market over inflation, it can reduce the immediate risk of recession by sustaining employment. However, this is likely to increase inflation expectations and push yields higher. Image: J.P. Morgan
U.S. Real Yields and Gold Gold’s typical inverse link to real rates is fundamental, but inflation expectations, central bank buying, geopolitical risks, and investor sentiment driven by debt and fiscal worries can disrupt this relationship for extended periods. Image: Goldman Sachs Global Investment Research
S&P 500 Equity Risk Premium and Yield Gap With the S&P 500 equity risk premium at historically low levels, the current investment landscape presents significant challenges for equity investors. Image: Goldman Sachs Global Investment Research