Valuation – S&P 500 Forward PE Ratio The forward P/E ratio of the S&P 500 is 19.77 and remains at high level. The historical range is about 15.5 to 17. Image: Bianco Research

Effect of Financial Conditions on U.S. Real GDP Growth Chart suggesting an improvement of U.S. real GDP growth in 2020, as the impulse from financial conditions turns positive. Image: Goldman Sachs Global Investment Research

S&P 500 – The 1994-1998-2011 Mini-Bear Analog The “mid-cycle adjustment” analog works very well so far and suggests where the S&P 500 could go next. Image: Fidelity Investments

10Y-2Y Yield Curve and U.S. Recession The U.S. yield curve is steepening and suggests optimism for 2020, as investors become more confident in the U.S. economy. Image: Financial Times

Fed Balance Sheet vs. S&P 500 Chart suggesting that since October 2019, a 1% increase in the Fed balance sheet has been associated with a 0.9% increase in the S&P 500,  (R² = 0.52). Image: Deutsche Bank…

Business Loans at U.S. Banks Business loans at U.S. banks are tightly connected to the real economy and stalled in second half of this year. Image: Financial Times

ISM Manufacturing Index and S&P 500 Realized Volatility Interesting chart suggesting the correlation between the S&P 500 realized volatility and the ISM Manufacturing Index. Image: Goldman Sachs Global Investment Research

S&P 500 Index and Recessions Usually, the U.S. stock market isn’t this buoyant just before a recession. Image: Bloomberg

Flows for the Broad U.S. Asset Classes: Stocks and Bonds During the week ending December 25th, U.S. ETFs and equity funds had the largest weekly outflow YTD. Image: BofA Global Research

Passive Equity and Bond Funds vs. Active Equity and Bond Funds The popularity of passive investing through ETFs and index mutual funds has grown significantly since 2010. Image: Financial Times

Share of Global GDP Today, U.S. GDP contributes 23.9% of the world’s economic output. In 1960, U.S. GDP was 40% of global GDP. Image: Jeroen Blokland