S&P 500 Valuation – Shiller CAPE Ratio Shiller CAPE puts U.S. stocks back in the stratosphere, great on the way up, unforgiving on the way down. From these levels, history argues for lower returns and higher risk. Not a great starting point if you care about future returns. Image: Topdown Charts
S&P 500 Returns – Strong vs. Weak Periods U.S. stocks tend to lose some of their edge over the summer, with May to October often lagging the stronger November to April period. Even so, seasonality is a guide, not a guarantee. Image: Real Investment Advice
S&P 500 Quarterly Net Profit Margin (ex. Financials & Utilities) Corporate America is delivering solid profits, and with margins set to climb in the coming quarters, the bullish case keeps gaining traction. It’s getting harder to argue against that trend. Image: Goldman Sachs Global Investment Research
Earnings Growth – Mag 7 and S&P 500 ex-Mag 7 The Magnificent Seven are pacing for 32% earnings growth this year, more than double the S&P 500’s 15%. With tech momentum still running hot, betting against them looks like a tough call. Image: J.P. Morgan Asset Management
Share of S&P 500 Company Quarter-Ahead EPS Guidance Above Consensus Estimates Strong earnings and confident forecasts are keeping corporate America bullish on near-term profits, adding fuel to already rich valuations. As long as companies deliver, investors are willing to look past rich pricing. Image: Goldman Sachs Global Investment Research
Share of Global Market Capitalization The U.S. accounts for only 4% of the world’s population, but it holds 62% of global equity value. Its innovation pipeline continues to pull in overseas capital. The simple truth: markets still move to a U.S. beat. Image: Goldman Sachs Global Investment Research
Seasonality – S&P 500 Average Monthly Returns Since 1950 Since 1950, the S&P 500 has returned just 1.7% from May to October, versus more than 7% from November to April. When the market hits May near record highs, that already weak stretch has tended to get weaker. Image: Real Investment Advice
S&P 500 Performance During the 1980-2000 and 2013-Current Secular Bull Markets The S&P 500 has been rising since March 2013, but age alone doesn’t call the top. The last secular bull market ran nearly two decades. If history is any guide, this one may still have further to go. Image: Carson Investment Research
S&P 500 Intra-Year Declines vs. Calendar Year Returns On average, investors stomach drawdowns of around 14% a year, but the S&P 500 has still climbed in 35 of the past 46. That turbulence is part of the deal for long-term returns. Image: J.P. Morgan Asset Management
Number of S&P 500 Stocks Making New 52-Week Lows Above 20 The number of S&P 500 stocks hitting new 52-week lows is rising, rarely a healthy signal. In sustained bull markets, new lows tend to stay below 20. That is not the kind of breadth you want to see in a healthy uptrend. Image: Bloomberg
S&P 500 Quarterly EPS Deutsche Bank sees S&P 500 earnings pushing above the long-term trend, broadly echoing Street expectations. At the end of the day, stocks follow profits. And profits have a way of drowning out the noise. Image: Deutsche Bank