What Presents the Biggest Risk to Markets over the Next 6 Months in Your View? According to a recent survey, 27% of JPM customers consider high valuations to be the biggest risk to markets, indicating a growing concern about the potential for overinflated asset prices. Image: J.P. Morgan
Do You Believe the Risk of an Equity Market Correction at Some Point Over the Next 3-6 Months Is High or Low? JPMorgan’s survey reveals that 82% of their clients anticipate a high likelihood of an equity market correction within the next 3-6 months. Image: J.P. Morgan
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
VIX and Geopolitical Risk Index The VIX tends to be sensitive to geopolitical events and can serve as an indicator of market sentiment during times of heightened geopolitical risk. Image: Goldman Sachs Global Investment Research
U.S. Equity Risk Premium – Long-Term View Should investors approach U.S. equities with caution due to the significant decline in the equity risk premium, which stands well below its historical average? Image: Topdown Charts
Sentiment – Global PMI and Risk Appetite Indicator The GS risk appetite indicator remaining elevated suggests that investors have a high appetite for risk in the financial markets. Image: Goldman Sachs Global Investment Research
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
FMS Financial Market Stability Risks Index vs. S&P 500 Financial market stability risks continue to weigh on the S&P 500. Image: BofA Global Fund Manager Survey
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