S&P 500 Performance per Year of a 4-Year Presidential Cycle Midterm years have a reputation for shaky markets. History tells a different story in second presidential terms, with U.S. stocks averaging an 8.8% gain since 1950. Those midterm jitters tend to fade quicker than investors expect. Image: Carson Investment Research
U.S. ETF and Mutual Fund Flows Over the past year, U.S. investors have favored bonds and money market funds over riskier equities, with geopolitical tensions hanging over markets and interest rates staying elevated. Image: Goldman Sachs Global Investment Research
Citi Economic Surprises The U.S. economy has held up better than its peers since the Middle East conflict escalated, as growth prospects elsewhere have dimmed, pushing investors toward the U.S. as the steadier bet. Image: TS Lombard
Average Global Equities Returns Depending on Absolute Moves in U.S. 10-Year Yieldss Big moves in bond yields rarely go unnoticed by equities. A rapid rise in yields can act as a red flag for stocks, as investors push for greater compensation to stay exposed. Image: Goldman Sachs Global Investment Research
1-Month Rolling Correlation of 10-Year UST Yield Change and S&P 500 Returns Since the start of the Middle East conflict, U.S. Treasuries have struggled to play their traditional diversification role. The one-month rolling correlation between 10-year yields and equitie returns has sunk to a multi-decade low. Image: Goldman Sachs Global Investment Research
Valuation – The Buffett Indicator The Buffett Indicator, which compares U.S. market capitalization to GDP, hit a fresh high. It’s not a crash signal, but it raises a flag. At these levels, history suggests weaker long-term returns and a thinner margin of safety Image: Real Investment Advice
Implied Probability of S&P 500 Drawdown The rally has made U.S. equities harder to chase. Upside looks limited, while the risk of a pullback is building as valuations stretch. The risk-reward now looks less compelling. Image: Goldman Sachs Global Investment Research
Median Annual S&P 500 Total Return Based on Nominal 10-Year U.S. Treasury Yield There is no fixed relationship between bond yields and equity returns. Their correlation changes over time, driven by inflation dynamics, rate expectations, and shifts in credit risk. Image: Goldman Sachs Global Investment Research
U.S. Net Margin Debt U.S. margin debt is hovering near record highs. That level of borrowing reflects strong risk appetite, but it also leaves the market more exposed to sharp pullbacks if stocks slide and leveraged investors rush to cut positions. Image: Goldman Sachs Global Investment Research
CTAs Exposure to Bonds CTAs’ overall allocation to bonds sits in the 8th percentile, indicating little appetite for rates risk. Fixed income is simply not where they want exposure right now. Image: Deutsche Bank Asset Allocation
Cyclical Minus Defensive Sectors Positioning At the 52nd percentile, sector positioning shows a market in balance, with no meaningful shift toward either cyclicals or defensives, pointing to a lack of strong conviction. Image: Deutsche Bank Asset Allocation