U.S. Equities and Global Equities ex-U.S. This chart suggests that higher yields could cause great rotation from bonds to stocks, US equities to non-US equities, growth to value, large caps to small caps, tech stocks to bank stocks, credit to commodities,… Image: BofA Global Investment Strategy
Small Cap Cyclical Sectors vs. Defensive Sectors Median Forward P/E Relative valuations for small-cap cyclicals versus small-cap defensives also remain near the 20-year lows. Image: BofA US Equity & Quant Strategy
S&P 500 Total Return Decomposition by Sector Financials is the only sector that has experienced multiple contraction for the past decade. Image: BofA US Equity & Quant Strategy
S&P 500 Operating EPS vs. Normalized EPS The gap between operating and normalized EPS is the widest since Q3 2007 (the prior market peak). Image: BofA US Equity & Quant Strategy
BofA Sell Side Indicator The BofA’s Sell Side Indicator suggests no euphoria and equity returns of 12% over the next 12 months, putting the S&P 500 at 3,629 by year-end. Image: BofA Global Research US Equity & Quant Strategy
Momentum to Value Rotation The rotation into value suggests a rebound in global economic growth, not a recession. Image: BofA Merrill Lynch US Equity & US Quant Strategy
Multiple Expansion – Year-Over-Year Change in the S&P 500 Forward P/E Since the beginning of the year, the multiple expansion explains the S&P 500 return. Historically, S&P multiples contract or remain flat following years of big multiple expansion. Image: BofA Merrill Lynch US Equity & US Quant Strategy
JPMorgan Global Manufacturing PMI The JPMorgan Global Manufacturing PMI rises to a seven-month high of 50.3, after having been in contraction territory. NBF Economics and Strategy
Debt Securities Issued by S&P 500 Companies Should investors be concerned about the corporate debt maturity wall? This chart shows the long term S&P 500 debt maturity schedule. Image: J.P. Morgan US Equity Strategy & Global Quantitative Research
Cumulative Market Cap Growth vs. Cumulative Executed U.S. Buybacks Through the current cycle, U.S. buybacks have returned about $5.5 trillion to shareholders. Image: J.P. Morgan US Equity Strategy & Global Quantitative Research