U.S. Corporate Bond Ownership More than 25% of U.S. corporate bonds are held by insurance companies. Many investment grade investors are not allowed to hold junk-rated bonds. Any drop in the credit ratings could amplify the next recession. Image: NBF Economics and Strategy
Share of Total U.S. Equity Trading Are stock pickers an endangered species? Only one-tenth of the US equity market’s trading volumes comes from fundamental equity investors. Image: Financial Times
Gold and U.S. 10-Year Treasury Yield Risk sentiment in the market has improved and investors shift away from gold, while U.S. equities have reached new all-time highs. Image: U.S. Global Investors
U.S. Corporate Bond Market Risk It is different this time. Since the 2008 regulations change, corporate bond market-risk-taking has moved from banks to investors in mutual funds. Image: Swedbank Research
Valuation – Commodity Prices Relative to S&P 500 Chart suggesting that commodity prices have never been more depressed relative to stocks, since the late 90’s. Image: U.S. Global Investors
Survey – U.S. Recession Probability U.S. recession fears are fading and U.S. credit investors now see a 21% chance of recession over the next 12 months. It was 25% in September. Image: BofA Credit Investor Survey
Local Currency Returns and Return to Vol Ratios in YTD 2019 Chart showing what investors should have bought this year. Image: Goldman Sachs Global Investment Research
Relative P/E Valuation of Stable Growth vs. Variable Growth S&P 500 Companies Investors are paying a huge premium for stable growth S&P 500 companies vs. variable growth companies. Image: Goldman Sachs Global Investment Research
Demographics – Labor Force Growth and Term Premium Chart suggesting that growth in the labor force could explain the term premium. The term premium is the risk premium (or the bonus) that investors receive for the risk of owning longer-term bonds. Image: Fidelity Investments
S&P 500 vs. IPO Performance The chart shows how IPOs have performed since 2015. Currently, investors seem reluctant to invest in high-risk, high-growth companies. Image: Richardson Wealth