Median S&P 500 Stock Short Interest as % of Market Capitalization The S&P 500’s median short interest level is low at 1.8%, suggesting that market participants are largely optimistic or, at least, not significantly bearish regarding its future performance. Image: Goldman Sachs Global Investment Research
Emerging Markets vs. Developed Markets Emerging economies, despite their vast populations and potential for growth, have not yet achieved a corresponding level of representation in global equity markets. Image: BofA Global Investment Strategy
Ownership of Developed Markets Government Debt Most U.S. government debt is owned domestically, while foreign investors hold a smaller but still significant portion. Image: BofA Global Investment Strategy
Market Capitalization of the Largest Stock Relative to the 75th Percentile Stock Over the past century, episodes of extreme stock market concentration have frequently resulted in heightened volatility and market corrections. Image: Goldman Sachs Global Investment Research
Average S&P 500 Performance Around Bear Markets and Corrections The current drawdown in the S&P 500 has been notably sharper compared to the average bull market correction, aligning more closely with the characteristics of an average bear market. Image: Goldman Sachs Global Investment Research
Sentiment – Global Risk Demand Index The Morgan Stanley Global Risk Demand Index indicates that investors’ risk appetite is very low, which can often be seen as a contrarian indicator, where extreme pessimism might signal a potential rebound in equity markets. Image: Morgan Stanley
Seasonality of Market Performance – MSCI USA August and September have historically been less favorable months for U.S. equities, with lower average performance compared to other months. Image: BofA Global Quantitative Strategy
Market – Current Pricing of Policy, Political and Macro Outcomes Investors are confidently predicting a 100% chance of a Fed rate cut on September 18, a 75% likelihood of Donald Trump winning the U.S. election on November 5, and a 68% probability of a soft landing within the next 12 months. Image: BofA Global Investment…
Secular Bull Market – S&P 500 Weekly Chart with the 40-Week MA and 200-Week MA The S&P 500 has reached the 5600s target based on the bullish cup and handle pattern that formed in 2022-2023. The early-2024 breakout to new all-time highs projects further upside potential to the 6150 level. Image: BofA Global Research
Share of U.S. Corporate Profits from Foreign Markets Foreign markets, including emerging markets, significantly contribute to the profits of U.S. corporations. Specifically, they account for 16% of U.S. corporate profits, with emerging markets making up 4% of these profits. Image: Goldman Sachs Global Investment Research