Valuation – S&P 500 Forward P/E Ratio The valuation of mid-cap stocks is well below historical averages, which, combined with their potential for growth and lower volatility compared to small-caps, makes them a compelling option for long-term investors. Image: Goldman Sachs Global Investment Research
S&P 500 Earnings Estimates The Magnificent Five are positioned for strong earnings growth through 2025, driven by superior sales growth, robust profit margins, and reasonable valuations relative to their growth potential. Image: Goldman Sachs Global Investment Research
EPS Revisions Typically, positive EPS revisions lead to an increase in stock market value and attract more investors, while negative revisions often result in downward pressure on stock prices. Image: Goldman Sachs Global Investment Research
Market Capitalization of Six Largest Companies as Share of S&P 500 Total With the six largest companies accounting for 29% of the S&P 500’s total market capitalization, discussions about diversification have become increasingly relevant. A well-diversified portfolio is vital for effective risk management. Image: Goldman Sachs Global Investment Research
Median Path of S&P 500 Around Un-Inversion in the 2s10s U.S. Treasury Yield Curve An un-inversion in the 2s10s U.S. Treasury yield curve can suggest a positive outlook for U.S. stocks, if a recession is avoided. Image: Goldman Sachs Global Investment Research
Market-Implied Change in Fed Funds Rate Traders are anticipating a significant shift in the Fed’s interest rate policy, predicting a total of 223 bps in cuts over the next 12 months due to weakening economic indicators, such as rising unemployment and easing inflation. Image: Goldman Sachs Global Investment Research
Sahm Rule Recession Indicator – U.S. Unemployment Rate While the Sahm Rule has historically been a reliable predictor of U.S. recessions, the current labor market dynamics differ from past recessions and may challenge its applicability in the present context. Image: Goldman Sachs Global Investment Research
Change in Nonfarm Payrolls Consensus expectations for the August non-farm payrolls report suggest an increase of approximately 165,000 jobs, while the U.S. unemployment rate is projected to decline to 4.2%. Image: Goldman Sachs Global Investment Research
S&P 500 Volatility The concentration of large-cap stocks has significantly impacted market volatility, with these stocks accounting for a record share of it. Image: Goldman Sachs Global Investment Research
G10 Policy Rates The majority of G10 central banks are either currently cutting rates or are expected to start soon, reflecting a broader global disinflationary trend and changing economic conditions. Image: Goldman Sachs Global Investment Research