Small Caps: Russell 2000 vs. MSCI USA Select Strong Balance Sheet Index Chart suggesting that it makes sense to avoid balance sheet risk in U.S. small caps. Image: Societe Generale Cross Asset Research
Inflation and S&P 500 6-Month Realised Volatility Since 1987, the S&P 500 6-month realised volatility has been the lowest, when U.S. CPI growth has been in the 2 to 3 per cent range. Image: Societe Generale Cross Asset Research
Relative Performance MSCI Europe vs. MSCI USA The relative performance of European stocks vs. the U.S. is at its lowest level in 50 years. Will this year be Europe’s time to outperform? Image: Legg Mason
Leverage – Net Debt to EBITDA of Small Caps vs. Large Caps Excess leverage is more pronounced among U.S. small caps. Image: BofA US Equity & Quant Strategy
Inequality – Percent of Total Investment Assets Held by Wealth Distribution The U.S. economy is not the stock market. The top 10% of American households own 84% of all stocks, and the bottom 90% own 16% of all stocks. Image: Deutsche Bank Global Research
S&P 500 – Performance since 2016 vs. Performance since 2019 The U.S. stock market is on fire. Will history repeat itself? Image: Gavekal, Macrobond
Gold and Emerging Market Currency Index Historically, a weak U.S. dollar tends to be good for gold and emerging markets. Image: Gavekal, Macrobond
Valuation – Largest Company in Terms of Market Value in the S&P 500 At current level, Apple is the largest publicly traded U.S. company. Image: Financial Times
S&P 500 Valuation Metric Is the U.S. equity market overvalued? The S&P 500’s median valuation metric is in the 89th percentile. That’s not cheap by historical standards. Image: Goldman Sachs Global Investment Research
U.S. Real Interest Rates and Recessions Currently, U.S. real interest rates are negative. In recent history, real interest rates were at least above 1.8% (orange line) before a recession.