S&P 500 Valuation Multiples Despite the U.S. stock market’s robust performance, the growing gap between earnings growth and price increases has inflated valuations to potentially unsustainable levels, warranting caution based on historical trends. Image: Real Investment Advice
ISABELNET Cartoon of the Day The S&P 500’s performance since the end of the 2022 bear market has rewarded bullish investors, contradicting pessimistic forecasts. It’s already Wednesday, Happy “Hump” Day, Everyone! 🐫🐪😎
Real Returns for U.S. Dollar-based Assets by Quarter Century While there have been periods of volatility and negative returns, real stock market returns over the past 25 years have been positive and in line with long-term historical averages. Image: Deutsche Bank
Active vs. Passive Fund Flows The trend of investors shifting from active to passive funds has accelerated significantly over the past decade, driven by cost considerations, performance outcomes, and evolving market practices. Image: Goldman Sachs Global Investment Research
Post-Election Day S&P 500 Returns While investors have responded positively to the election results, the true effects of new policies remain uncertain. The market’s robust performance is based on expectations, not realized economic outcomes. Image: Bloomberg
World Technology Earnings The technology sector’s consistent outperformance relative to other sectors since 2010 can be attributed to its robust profit growth and the transformative impact of technological innovations like AI. Image: Goldman Sachs Global Investment Research
Buybacks – S&P 500 Companies in Blackout Period Once the blackout period for stock buybacks ends, many U.S. companies are likely to resume buyback activities, which could substantially influence both stock performance and market dynamics. Image: Deutsche Bank Asset Allocation
Sector Composition of the S&P 500 by Equity Capitalization The market capitalization of sectors within the S&P 500 reflects the market’s changing landscape, driven by economic conditions and investor sentiment, leading to fluctuations in sector performance over time. Image: Goldman Sachs Global Investment Research
% of Days per Year to Make a New All-Time High for the S&P 500 The S&P 500’s performance this year reflects a strong bullish trend, with over one-fifth of trading days achieving new all-time highs, underscoring a favorable market environment. Image: Carson Investment Research
What Do You Think Is Currently the Most Crowded Trade? For FMS investors, the “Long Magnificent Seven” trade continues to be the most crowded, largely attributed to the impressive performance and market leadership of these tech stocks. Image: BofA Global Fund Manager Survey
Returns – U.S. Equities vs. Commodities While commodities can serve as a hedge in certain market conditions, U.S. equities are likely to continue outperforming them over the long term due to their lower volatility, more stable returns, and historical performance trends. Image: BofA Global Investment Strategy