Daily Markets Overview - Yardeni Research · 2020-05-19 · Table Of Contents Table Of...

Market Briefing:Daily Markets Overview

Yardeni Research, Inc.

May 22, 2020

Dr. Edward Yardeni516-972-7683

[email protected]

Joe Abbott732-497-5306

[email protected]

Please visit our sites atwww.yardeni.comblog.yardeni.com

thinking outside the box

Table Of Contents Table Of ContentsTable Of Contents

May 22, 2020 / Daily Markets Overview www.yardeni.com


S&P 500 Index & Sectors 1P/Es & VIX 2Bonds 3Yield Curve 4-5High Yield Bonds 6Municipal Bond Yields 7Dollar & Commodities 8Growth vs Value 9S&P 500 Equal-Weighted vs. Cap-Weighted 10Foreign Interest Rates 11

2015 2016 2017 2018 2019 2020 20211700

1900

2100

2300

2500

2700

2900

3100

3300

3500

1700

1900

2100

2300

2500

2700

2900

3100

3300

3500

5/22

S&P 500 INDEX(daily) 3386.15

2237.4

Latest (2955.45)

Source: Standard & Poor’s.Note: Dotted lines show previous years’ closing prices.

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Figure 1.

1 2 3 4 5 8 9 10 11 12 15 16 17 18 19 22 23 24 25 26 29 30-50-45-40-35-30-25-20-15-10-5051015202530354045505560657075

-50-45-40-35-30-25-20-15-10-505

1015202530354045505560657075

S&P SECTORS PERFORMANCE: MAY 2020 MONTH-TO-DATE(percent change from last trading day of April)May 2020

S&P 500 Index (1.2)Consumer Discretionary (2.9)Consumer Staples (-1.9)Energy (0.4)Financials (-3.6)Health Care (-0.5)Industrials (-0.7)Information Technology (4.9)Materials (2.1)Real Estate (-5.9)Communication Services (4.9)Utilities (-2.8)

Source: Standard & Poor’s. May 2020 M-T-D

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Figure 2.

S&P 500 Index & Sectors

Page 1 / May 22, 2020 / Daily Markets Overview www.yardeni.com


2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20228

10

12

14

16

18

20

22

24

8

10

12

14

16

18

20

22

24

5/22

FORWARD P/E RATIOS FOR S&P STOCK PRICE INDEXES*(daily)

S&P Forward P/EsS&P 500 (21.0)S&P 400 (20.1)S&P 600 (22.0)

* Daily stock price index divided by 52-week forward consensus expected operating earnings per share.Source: Standard & Poor’s and I/B/E/S data by Refinitiv.

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Figure 3.

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 220

10

20

30

40

50

60

70

80

90

0

10

20

30

40

50

60

70

80

90

VIX: S&P 500

5/22

Latest (28.2)

Note: Shaded areas denote recessions according to the National Bureau of Economic Research.Source: Chicago Board Options Exchange.

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Figure 4.

P/Es & VIX



2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022-2

0

2

4

6

-2

0

2

4

6

5/22

5/22

10-YEAR TREASURY vs 10-YEAR TIPS(percent, daily)

Source: Federal Reserve Board.

10-Year TreasuryBond Yield (0.66)TIPS Yield (-0.46)

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Figure 5.

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022.0

.5

1.0

1.5

2.0

2.5

3.0

3.5

.0

.5

1.0

1.5

2.0

2.5

3.0

3.5

5/22

WIDELY-USED PROXY FOR 10-YEAR EXPECTED INFLATION RATE*(percent, daily)

Expected Inflation Proxy (1.12)

* Nominal 10-year US Treasury bond yield minus 10-year TIPS yield.Source: Federal Reserve Board.

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Figure 6.

Bonds



2015 2016 2017 2018 2019 2020.0

.2

.4

.6

.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

2.8

3.0

3.2

3.4

.0

.2

.4

.6

.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

2.8

3.0

3.2

3.4

5/22

US TREASURY 10-YEAR & 2-YEAR YIELDS & FED FUNDS RATE(percent, daily)

Interest Rates10-Year Yield (0.66)2-Year Yield (0.17)Fed FundsTarget Rate (0.13)


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Figure 7.

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022-100

-50

0

50

100

150

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300

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400

450

-100

-50

0

50

100

150

200

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300

350

400

450

5/22

YIELD CURVE(basis points, daily)

10-Year Treasury MinusFederal Funds Target Rate (54)


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Figure 8.

Yield Curve



2015 2016 2017 2018 2019 2020-.2

.0

.2

.4

.6

.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

2.8

3.0

3.2

-.2

.0

.2

.4

.6

.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

2.8

3.0

3.2

5/22

2-YEAR TREASURY NOTE YIELD & FEDERAL FUNDS RATE FUTURES(percent)

Interest Rates2-Year Treasury Yield (0.17)Fed Funds Rate12-month Forward Futures (0.02)Federal Funds Target Rate (0.13)

Source: US Treasury & Chicago Mercantile Exchange.

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Figure 9.

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022-1.5

-1.0

-.5

.0

.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

-1.5

-1.0

-.5

.0

.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

5/21

5/22

5/22

10-YEAR GOVERNMENT BOND YIELDS(percent)

10-Year YieldsGermany (-0.49)Japan (0.00)US (0.66)

Source: Haver Analytics.

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Figure 10.

Yield Curve



97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 225

10

15

20

25

5

10

15

20

25

YIELD ON US HIGH-YIELD CORPORATE BONDS(percent, daily)

5/21

Source: Bank of America Merrill Lynch.Note: Shaded areas denote recessions according to the National Bureau of Economic Research.

yard

eni.c

om

Figure 11.

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22200

400

600

800

1000

1200

1400

1600

1800

2000

2200

2400

200

400

600

800

1000

1200

1400

1600

1800

2000

2200

2400

YIELD SPREAD US HIGH-YIELD CORPORATE LESS 10-YEAR US TREASURY BONDS(basis points, daily)

5/21

Spread (681)

Note: Shaded areas denote recessions according to the National Bureau of Economic Research.Source: Bank of America Merrill Lynch and Federal Reserve Board.

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Figure 12.

High Yield Bonds



2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

5/21

US AAA MUNICIPAL YIELD(percent)

Yield (1.34)

Source: Merrill Lynch.

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Figure 13.

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022-150

-100

-50

0

50

100

150

200

250

-150

-100

-50

0

50

100

150

200

250

US AAA MUNICIPAL BOND YIELD LESS 10-YEAR TREASURY YIELD SPREAD(basis points, daily)

5/21

Spread (66)

Note: Shaded areas denote recessions according to the National Bureau of Economic Research.Source: Merrill Lynch and Board of Governors of the Federal Reserve System.

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Figure 14.

Municipal Bond Yields



95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 2285

90

95

100

105

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115

120

125

130

135

85

90

95

100

105

110

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120

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130

135

5/22

JP MORGAN NOMINAL BROAD EFFECTIVE EXCHANGE RATE(2010=100, daily)

* Argentina, Australia, Brazil, Bulgaria, Canada, Chile, China, Colombia, Croatia, Czech Republic, Denmark, Ecuador, Egypt, France, Germany, Hong Kong,Hungary, Japan, India, Indonesia, Israel, Italy, Korea, Kuwait, Malaysia, Mexico, Morocco, New Zealand, Nigeria, Norway, Pakistan, Panama, Peru,Philippines, Poland, Romania, Russia Saudi Arabia, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, United Kingdom,Ukraine, Uruguay, Venezuela, Vietnam, and United States.Source: JP Morgan.

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Figure 15.

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20220

50

100

150

200

300

400

500

600

700

5/21

5/22

COMMODITY PRICES

Brent Crude Oil Price(dollars per barrel)

CRB Raw Industrials Index(1967=100)

Source: Haver Analytics.

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Figure 16.

Dollar & Commodities



97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22.30

.35

.40

.45

.50

.55

.60

.65

.70

.30

.35

.40

.45

.50

.55

.60

.65

.70

5/22

5/22

S&P 500 GROWTH & VALUE RELATIVE TO S&P 500

Relative to S&P 500*GrowthValue

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* Rising (falling) line indicates that the index is outperforming (underperforming) the S&P 500.Source: Standard & Poor’s and Haver Analytics.

Figure 17.

96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22-40

-30

-20

-10

0

10

20

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40

50

-40

-30

-20

-10

0

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20

30

40

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5/22

S&P 500 GROWTH vs VALUE SPREAD(yearly percent change spread, basis points)

S&P 500 Growth Outperforms S&P 500 Value

S&P 500 Growth Underperforms S&P 500 Value

Source: Standard & Poor’s and Haver Analytics.

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Figure 18.

Growth vs Value



90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22.7

.8

.9

1.0

1.1

1.2

1.3

1.4

1.5

1.6

1.7

.7

.8

.9

1.0

1.1

1.2

1.3

1.4

1.5

1.6

1.7

5/22

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S&P 500 RATIO: EQUAL-WEIGHTED TO MARKET-CAP-WEIGHTED

Source: Haver Analytics and Standard & Poor’s.

Figure 19.

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22250

1000

1750

2500

3250

4000

4750

5500

250

1000

1750

2500

3250

4000

4750

5500

5/22

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S&P 500 STOCK PRICE INDEXES(ratio scale)

Market-cap-weighted S&P 500Equal-weighted S&P 500

Source: Haver Analytics and Standard & Poor’s.

Figure 20.

S&P 500 Equal-Weighted vs. Cap-Weighted



2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022-1.0

-.5

.0

.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

-1.0

-.5

.0

.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

5/22

ECB OFFICIAL RATE & GERMAN 10-YEAR GOVERNMENT BOND YIELD(percent)

10-Year German Bond Yield (-0.48)ECB Deposit Facility Rate (-0.50)

Source: European Central Bank and Haver Analytics.

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Figure 21.

Foreign Interest Rates



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