Stock Market Capitalization as a Percentage of Nominal GDP This ratio is useful in determining whether the U.S. stock market is undervalued or overvalued relative to its historical average. The current reading is pretty high at 149.15%. You may also like the “Stock Market Valuation” and “S&P 500 Index – Earnings & Valuation.” Image: Bianco Research
Negative-Yielding Debt by Country The chart shows negative-yielding debt by country as of June 2019. Bondholders will get back less than what they paid if they hold bonds to maturity. So, in a sense, negative yield bonds are a tax on bondholders. Picture Source: Bloomberg
First, Middle, Final Years of S&P 500 Bull Markets since 1975 The chart shows that the S&P 500 has generated a 26.9% return on average, in the final years of bull markets since 1975, excluding the current bull market. You may also like “Equity Market Performance Around Bear Markets.” Image: Legg Mason
Homeownership Disparity Deepens Since 1994, the gap between blacks and whites has widened, in part because starter-home prices have exploded, year after year. Inequality: you may also like “U.S. Unemployment Rate: Black or African Americans” and “U.S. Net Worth by Wealth Bracket” and “Countries With the Highest Housing Bubble Risks.” Picture Source: Bloomberg
Negative Yielding Bonds In the World Now, 25% of all bonds in the world trade at negative interest rates. Keep in mind that raising interest rates in the future could be painful for bond investors. Image: Deutsche Bank Global Research
S&P 500 Consumer Discretionary / Industrials Around First Fed Rate Cut If consumer discretionary outperforms industrials after first Fed rate cut, then it could signal a recession. Image: Ned Davis Research
Are Small Cap Stocks Overvalued? Small Cap Stocks Valuation: based on the forward PE ratio, the valuation of small cap stocks seems reasonable, with no sign of bubble. You may also like our “Stock Market Valuation.” Image: Bianco Research
U.S. Labor Force vs. Inflation The chart shows the enduring link between labor force and inflation. The chart also suggests that U.S. labor force leads U.S. CPI by three years. Demographic trends imply subdued inflation. You may also like “World Population & Demographics – More People Over 65 than Under 5 for the First Time.”…
Stocks, Bonds, Bills, and Inflation since 1926 Great chart showing the hypothetical value of $1 invested in stocks, bonds, and bills, at the beginning of 1926. Warren Buffett is right when he says that stocks are generally better than bonds. Picture souce: Morningstar
U.S. – China Competition (Focus Risk) The United States and China will eventually conclude a trade agreement, but tensions between the two countries are structural and won’t go away any time soon. Image: BlackRock Investment Institute
Treasury Bond Prices Around First Rate Cuts Since 1970, Treasury bonds have rallied 2-3 months before the first rate cut. Image: Ned Davis Research