Search Results for: premium

S&P 500 Next Twelve Month Equity Risk Premium Chart suggesting that the S&P 500 NTM equity risk premium remains well above its long-term average. Image: Morgan Stanley Research

U.S. Dollar and S&P 500 Equity Risk Premium Higher bond yields reduce the S&P 500 equity risk premium, which weakens the U.S. dollar. Image: Morgan Stanley Research

Demographics – Labor Force Growth and Term Premium Chart suggesting that growth in the labor force could explain the term premium. The term premium is the risk premium (or the bonus) that investors receive for the risk of owning longer-term bonds. Image: Fidelity Investments

Liquidity Premium and IG Bonds The spread between low liquid and high liquid IG bonds is widening, despite the rally and the belief of an improvement in US-China trade tensions. Image: Goldman Sachs Global Investment Research

U.S. Market – Earnings, Valuation and Equity Risk Premium This chart shows that the P/E ratio is above average, but the equity risk premium is relatively high. Image: Fidelity Investments

S&P 500 Valuation and Equity Risk Premium This chart shows that the equity risk premium (earnings yield less 10-year Treasury yield) has declined to 3.9%. Image: Fidelity Investments

S&P 500 Equity Risk Premium and Global DM Composite PMI Nice chart showing that the equity risk premium of the S&P 500 is currently elevated. Image: JDI research

Liquidity Premium: Investment Grade vs. High Yield Bonds The chart shows that the premium provided by illiquid IG and HY bonds has been drifting wider. Image: Goldman Sachs Global Investment Research

MOVE vs. Treasury Term Premium This chart shows the nice correlation between MOVE (implied volatility of U.S. Treasury markets) and the Treasury term premium. The term premium is the risk premium (or the bonus) that investors receive for the risk of owning longer-term bonds. Image: Longview Economics, Macrobond

Term Premium on a 10-Year Zero Coupon Bond Term premium on a 10-year zero coupon bond remains in negative territory. Investors do not seem to fear rising rates over the long-term. The term premium is the risk premium (or the bonus) that investors receive for the risk of owning longer-term bonds.

The Equity Risk Premium May Be Bullish The equity risk premium suggests that the S&P 500 is not overvalued, which may be a bullish signal. You may also like our “Stock Market Equity Risk Premium.” Image: Fidelity Management and Research