Expected Real Return of U.S. Equities and U.S. Bond Over Next 5 Years This chart suggests a real return of around 5% p.a. on U.S. equities over the next 5 years vs. -5% for U.S. Treasury bonds. Image: Pictet Asset Management
Probability of a U.S. Recession as Currently Priced Across Asset Classes Chart suggesting that the S&P 500 implies a 57% chance of recession, while 5-year U.S. Treasuries imply a 86% chance of recession. Image: J.P. Morgan
Baseline Equity Returns (5 Years) Chart suggesting that high market valuations will affect equity returns in the coming years. Image: Oxford Economics
S&P 500 Valuation – Forward P/E Ratio – May 10, 2019 S&P 500 Valuation: Forward P/E Ratio is 16.5 and equal to the 5-year average, above the 10-Year average (14.7).Based on the forward P/E ratio, the US stock market is not too expensive. You may also like our “Stock Market Valuation.” Image: FactSet Research Systems Inc.