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
Is The U.S. Stock Market Overvalued? S&P 500 Valuation: the chart shows that the U.S. stock market is not cheap. Based on the forward P/E ratio, the S&P 500 is not extremely overvalued either. You may also like our “Stock Market Valuation.” Image: Bianco Research
Small Business Optimism Roars Back, Rivaling Historic Highs Small Business Optimism Index improved: expectations for sales, business conditions, and expansion rose. That’s good news for the U.S. economy. See why the “Small Businesses Optimism Index” is a good recession indicator. Image: National Federation of Independent Business (NFIB)
New York Fed Probability of Recession in Next 12 Months since 1990 When an inverted yield curve occurs, short-term interest rates exceed long-term rates. It suggests that the long-term economic outlookis poor and that the yields offered by long-term fixed income securities will continue to decline. Since 1962, no recession has occurred without an inverted…
“You Need to Divorce your Mind from the Crowd…” –Warren Buffett Quote of the day: “You need to divorce your mind from the crowd. The herd mentality causes all these IQ’s to become paralyzed. I don’t think investors are now acting more intelligently, despite the intelligence. Smart doesn’t always equal rational. To be a successful…
What Does Government Debt Look Like Across the Globe? Government debt has risen to over $63 trillion in absolute terms. Japan is the most indebted countries in the world, with debt-to-GDP ratio of 237.6% in 2017. The United States debt-to-GDP ratio is 105.2% in 2017. Image: howmuch.net
The “Small Businesses Optimism Index” Is a Good Recession Indicator This is not the perfect recession indicator, but when the Small Businesses Optimism Index falls below 100 or more likely below 95, then the risk of a recession remains high. And when the Small Businesses Optimism Index hits an all-time high, a recession may occur…
Why Is “Small Businesses Planning to Hire” a Good Recession Indicator? When the percentage of Small Businesses Planning to Hire, falls from a high level to less than 10%, then the risk of a recession remains high. That’s not the case today, there is no recession coming. Image: National Federation of Independent Business (NFIB)
Why Lower Bond Yields Influence the S&P 500? Because lower interest rates push stock market multiples higher. If interest rates are lower, then the value of future cash flows increases, because future cash flows are discounted back at a lower interest rate. So, lower U.S. 10-year yields influence the stock market equity risk premium. On the other…
Why Is Core Inflation So Low Compared To Previous Business Cycles? The Consumer Price Index Less Food & Energy (Core CPI) is very low compared to previous business cycles in the US, for several reasons: – not fast-rising money supply – globalization: inflation is a global phenomenon – lack of wage acceleration – increase in…