Category: Blog

Market-Implied U.S. Recession Probability The market-implied probability of a U.S. recession within one year is modestly elevated but not extremely high. Image: Goldman Sachs Global Investment Research

S&P 500 – U.S. Broad Market Net Forward Profit Margin Elevated profit margins in the U.S. broad market, which continue to show forward-looking expansion, point to underlying economic resilience and do not align with the start of a severe, systemic labor market downturn. Image: TS Lombard

Top 10 Mega Cap Stocks as % of S&P 500 The growing dominance of the top 10 companies in the S&P 500 has raised concerns about whether the index still provides sufficient diversification, given the concentration risks and sector imbalances. Image: Real Investment Advice

Median S&P 500 Performance After Fed Cuts Rates The S&P 500 has typically risen by a median of roughly 50% in the two years after the Fed begins cutting rates. However, when cuts take place during recessions, returns are usually much weaker. Image: Deutsche Bank

Amount of Fed Rate Cuts Priced by End of Year The outlook could shift quickly in response to upcoming inflation data and changing economic conditions, but for now traders are pricing in 67 basis points of easing by the end of 2025. Image: Bloomberg

Valuation – S&P 500 Forward P/E Multiple The five largest S&P 500 stocks are trading well above their historical valuation norms—reflecting strong investor confidence in their earnings power and growth prospects—yet their valuations remain below previous peak levels. Image: Goldman Sachs Global Investment Research

S&P 500 and Speculators’ Net Positioning Speculators have turned increasingly bearish, slashing their net long positions in major U.S. equity index futures—E-mini S&P 500, Nasdaq, Dow Jones, S&P Midcap, and Russell 2000—to levels not seen since late 2023. Image: Bloomberg

Gold Spot Price and Russell 3000 Gold Miners Subindustry Goldman Sachs is bullish on gold over the next 12 months, projecting a 14% rise driven by central bank demand and anticipated rate cuts, with even greater gains possible in riskier scenarios. Image: Goldman Sachs Global Investment Research

S&P 500 vs. 20+-Year U.S. Treasuries U.S. stocks continue to outperform bonds in an ongoing post-pandemic risk-on rally, despite periods of volatility. Market sentiment remains tilted toward risk assets. Image: Bloomberg

U.S. Labor Market – Job Openings per Unemployed Worker The ratio of U.S. job openings to unemployed workers below 1 indicates labor market weakness, with policy uncertainty and slowing demand increasing the likelihood of a September Fed rate cut. Image: J.P. Morgan Asset Management

Oil Prices and Events Higher oil prices function like a tax, reducing disposable income and increasing business costs, which can slow growth or cause recessions. However, these spikes are typically brief as demand falls and markets adjust accordingly. Image: Real Investment Advice