Sentiment – Global Risk Demand Index The Morgan Stanley Global Risk Demand Index indicates that investors’ risk appetite is very low, which can often be seen as a contrarian indicator, where extreme pessimism might signal a potential rebound in equity markets. Image: Morgan Stanley
Risk Appetite in Flows After Adjusting for Seasonality and Cyclical Growth Market sentiment is currently robust, with risk appetite in flows at the 85th percentile, falling short of extreme levels. Image: Deutsche Bank Asset Allocation
S&P 500 Equity Risk Premium Despite potential in U.S. equities, the decline in equity risk premium suggests caution is needed, prompting diversification across asset classes for risk management. Image: BofA Global Research
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