Earnings Sentiment (Analyst Upgrades Minus Downgrades Across Markets) The S&P 500 is still enjoying positive earnings sentiment, but momentum has cooled amid concerns over demand, margins and broader economic uncertainties. Image: Goldman Sachs Global Investment Research
Market Breadth – Percent Below 52-Week High S&P 500 Index Less Median Stock The rebound in the S&P 500’s 52-week market breadth suggests the rally could extend into year-end, buoyed by wider participation, looser monetary policy, and steady earnings growth. Image: Goldman Sachs Global Investment Research
S&P 500 Market Cap vs. Equal Weighted Returns Since the March–April correction, most of the gains have come from the largest stocks, which is clear from the difference between equal-weighted and market-cap-weighted S&P 500 indexes. Image: Real Investment Advice
U.S. Corporate Equities Market Value Outstanding vs. Monetary Base vs. Nominal GDP Quantitative easing expands the monetary base, alongside a rising federal deficit, a combination that usually boosts financial asset prices but delivers mixed and modest impacts on overall economic growth. Image: TS Lombard
S&P 500 Market Cap / S&P 500 Equal Weight Index The current performance gap—where the market-cap-weighted index outperforms the equal-weight index—does not necessarily signal an imminent bear market, but it does warrant some caution for investors. Image: Real Investment Advice
U.S. Money Market Fund Assets vs. Federal Funds Effective Rate U.S. money market funds typically experience asset inflows during rate hikes but see outflows approximately 12 months after the Fed initiates rate cuts. Image: Real Investment Advice
Seven Largest Companies as Share of S&P 500 Total Market Capitalization The seven largest stocks in the S&P 500 make up 34% of the index’s total market capitalization. Although such a high concentration doesn’t guarantee market declines, it has the potential to increase volatility. Image: Goldman Sachs Global Investment Research
Market-Implied U.S. Recession Probability The market-implied probability of a U.S. recession within one year is modestly elevated but not extremely high. Image: Goldman Sachs Global Investment Research
S&P 500 – U.S. Broad Market Net Forward Profit Margin Elevated profit margins in the U.S. broad market, which continue to show forward-looking expansion, point to underlying economic resilience and do not align with the start of a severe, systemic labor market downturn. Image: TS Lombard
U.S. Labor Market – Job Openings per Unemployed Worker The ratio of U.S. job openings to unemployed workers below 1 indicates labor market weakness, with policy uncertainty and slowing demand increasing the likelihood of a September Fed rate cut. Image: J.P. Morgan Asset Management
Share of Top 5 Companies by Market Capitalization in the S&P 500 The U.S. equity market is highly concentrated in just a few mega-cap tech companies. While this does not definitively mean the U.S. is in a bubble, investors face uncharted waters as performance hinges on a few key players. Image: Deutsche Bank