Valuation – Nasdaq 100 Fwd P/E Tech stocks are priced at a premium, with forward valuations significantly above their 10-year average. This rich valuation assumes technology companies will maintain their earnings leadership. Image: Bloomberg
Valuation – Price-to-Forward Earnings Ratios The U.S. stock market maintains a premium valuation compared to global markets, with the exception of India, leaving little room for error as it’s priced for perfection. Image: Goldman Sachs Global Investment Research
S&P 500 vs. S&P 500 Equal-Weight The S&P 500 cap-weighted index return premium has reached extreme levels. Should investors now favor the S&P 500 equal-weighted index over the cap-weighted index? Image: Morgan Stanley Wealth Management
Valuation – S&P 500 Normalized P/E Ratio At 22x, the S&P 500 is currently trading over 40% above the long-term average, which suggests that investors are willing to pay a premium for stocks in the index. Image: BofA US Equity & Quant Strategy
10-Year U.S. Treasury Yield Less CPI Given investors’ historic tendency to demand a 200 basis point premium over inflation rates, could rates rise further? Image: Morgan Stanley Wealth Management
S&P 500 ERP and S&P 500 Fwd vs. Trailing EPS The S&P 500 looks unattractive until the equity risk premium increases. Image: Morgan Stanley Research
Valuation – S&P 500 Index Forward P/E Ratio vs. MSCI World Ex-U.S. Forward P/E Ratio U.S. equities currently trade at roughly a 50% premium over international stocks, fueled by stronger earnings growth, greater profitability, and investors’ willingness to pay extra for these advantages. Image: Bloomberg
Implied Volatility (VIX) and Realized S&P 500 Volatility (1-Month) According to Goldman Sachs, the volatility risk premium will return toward 2021’s highs in the coming weeks. Image: Goldman Sachs Global Investment Research
Valuation – 12-Month Forward P/E of Top vs. Bottom Quintile Does valuation still matter? The premium of the 20% most expensive companies is near highs. Image: Goldman Sachs Global Investment Research
Cross-Asset Valuations on their 10-Year Range Equity risk premiums suggest that equities are still cheaper than average. Image: Morgan Stanley Research
Relative P/E Valuation of Stable Growth vs. Variable Growth S&P 500 Companies Investors are paying a huge premium for stable growth S&P 500 companies vs. variable growth companies. Image: Goldman Sachs Global Investment Research