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Interesting stats from the treasure trove that is JP Morgan's Guide to the Markets:
(1/x)
Forward P/E is now 21.7 and highest since '00 and implies a 0% return over next 5 years if past regression holds true
(1/x)
Forward P/E is now 21.7 and highest since '00 and implies a 0% return over next 5 years if past regression holds true
2. Growth is now 0.97 standard deviations away in relative value vs. value stocks. We have seen 3 standard deviation events ('99) so the imbalance could get worse before it gets better. Growth is now trading at 29.8 P/E - 158% higher than 20 year trailing history
3. Consumer discretionary now trading at 45 x forward P/E. Healthcare is trading closest to its 20 year forward P/E average
4. The contraction in real GDP is 3 times worse than we saw in the financial crisis. However, a short contraction of this magnitude is not without precedent. In the late 40s there was a similar post WW II contraction that lasted less than 1 year
5. There is a clear decoupling occurring between new cases and deaths. Probably as a result of increased testing and younger people getting infected. The hope is this doesn't spread to the older population. Increase in cases is still bad for economy probably.
6. Mortgage applications (+15%) and driving directions (+36%) are both up y/o/y
7. Household debt service ratio is still lowest since tracking began in 1980, indicating a strong consumer positioning. However, low debt is probably the new normal, which would lead to a protracted recovery
8. Income inequality is at all time highs and has risen steadily since 1980
That's all I have for now - if you don't already have this, I highly recommend picking one up.
That's all I have for now - if you don't already have this, I highly recommend picking one up.
