Small Cap Stocks – Relationship Between Relative Fwd P/E of Russell 2000 vs. Russell 1000 and Subsequent 10-Year Annualized Relative Returns For long-term investors, periods when small-cap stocks are trading at a significant discount to large-cap stocks may offer attractive investment opportunities. Image: BofA US Equity & Quant Strategy
U.S. 10-Year Treasury Yield – Weekly Chart The outlook for the U.S. 10-year Treasury yield suggests a declining trend in the fourth quarter of 2024 and into the first quarter of 2025. Image: BofA Technical Research
U.S. 10-Year Treasury Yield The 10-year U.S. Treasury yield has been in a secular bear market since February 2022, and it could potentially approach 6% in the coming years. Image: BofA Global Research
Forecast – U.S. 10-Year Treasury Yield According to consensus, the 10-year U.S. Treasury yield is expected to reach 4.20% by the end of 2024. Image: The Daily Shot
U.S. 10-Year Treasury Yield Since 1790 The trajectory and duration of the U.S. bond bear market can be influenced by factors such as inflation, economic growth, and the Federal Reserve’s monetary policy. Image: BofA Global Investment Strategy
Russell 2000 Forward P/E vs. Subsequent 10-Year Annualized Returns Should long-term investors increase their allocation to U.S. small-cap stocks, given the potential for 9% annualized ten-year returns suggested by the absolute forward P/E for the Russell 2000? Image: BofA US Equity & Quant Strategy
U.S. 10-Year Real Rate A potential rise in U.S. real rates could cause the collapse of the AI bubble, leading to turbulence in the stock market. Overvalued AI companies facing declines could trigger widespread market instability, eroding investor confidence. Image: BofA Global Investment Strategy
Real Market Cap to GDP Ratio vs. Expected 10-Year Forward Returns The current elevated inflation-adjusted market capitalization to GDP ratio suggests the likelihood of anemic returns for the U.S. stock market over the next 10 years. Image: Real Investment Advice
S&P 500 Annualized Forward 10-Year Returns (Forecast vs. Actual) Investors in U.S. equities should anticipate a modest annualized return of around 3% over the next 10 years, requiring tempered long-term expectations. Image: BofA Global Research
10-Year U.S. Treasury Yield Since the Global Financial Crisis, there have been only two other occasions where the 10-year U.S. Treasury yield has experienced such a rapid decline, underscoring the exceptional nature of the current situation. Image: Deutsche Bank
S&P 500 vs. 10-Year U.S. Treasury Yield Since August 2023, there has been a strong correlation between the S&P 500 index and the 10-year U.S. Treasury yield, which has been a significant factor in shaping market dynamics and investment strategies in recent months. Image: Deutsche Bank