Search Results for: inflation

S&P 500 Earnings vs. CPI and PPI While inflation can influence S&P 500 earnings, it is commonly seen as a lagging indicator rather than a leading one. Image: BofA US Equity & Quant Strategy

Sentiment Scores During Earnings Calls In recent quarters, falling inflation and the prospect of lower interest rates have had a positive impact on U.S. corporate sentiment, which is seen as a favorable sign for the U.S. economy. Image: BofA US Equity & Quant Strategy

Rolling 24 Month Correlation Between U.S. Treasury Bonds and Equities Amid high inflation, UST bonds become less effective as a hedge against U.S. stocks, as rising prices erode bond payouts and interest rate hikes lead to a drop in bond prices. Image: BofA Research Investment Committee

Performance – Large Cap vs. Small Cap The durability of the rotation from U.S. large caps to U.S. small caps remains to be seen as the market assesses the implications of changing inflation and rate expectations. Image: Goldman Sachs Global Investment Research

Survey – Credit Investors: What Are Your Biggest Concerns? The 2024 U.S. election outcome could significantly impact fiscal policy, debt, interest rates, inflation, and economic growth, which are key concerns for U.S. credit investors. Image: BofA Credit Investor Survey

Fed – The Distribution of FOMC Voters Should investors bet for a hawkish Fed policy tone in 2025, as the central bank remains focused on its fight against persistent inflation, even if it means risking some economic pain? Image: BofA Global Research

Returns for Major Global Financial Assets Over the past 50 years, the annualized equity returns in the U.S., adjusted for inflation, have been around 7.5%. This solid long-term performance has allowed investors to achieve significant growth, outpacing the rate of inflation. Image: Deutsche Bank

ISM Manufacturing PMI and Global Stocks vs. Government Bonds In a potential shift from a “no” to a “hard” landing scenario, government bonds may outperform due to increased risk aversion, interest rate cuts, lower inflation expectations, and their historical performance during economic downturns. Image: BofA Global Investment Strategy

Brent Oil Price Brent crude oil prices remain high relative to their levels five years ago, before the pandemic, reflecting past inflation’s impact. Image: J.P. Morgan

Financial Conditions Financial conditions in G3 economies have been experiencing a trend of loosening, posing challenges for central banks in their efforts to manage inflation and making it more difficult to keep it under control. Image: BofA Global Research

S&P 500 Valuation – Real Market Capitalization to Real GDP Ratio The inflation-adjusted market capitalization to GDP ratio is a valuable tool to evaluate the U.S. stock market’s valuation. The high current ratio implies a potential overvaluation. Image: Real Investment Advice