Daily Markets Overview - Yardeni Research

Market Briefing: Daily Markets Overview

Yardeni Research, Inc.

September 5, 2023

Dr. Edward Yardeni

516-972-7683 eyardeni@

Joe Abbott

732-497-5306 jabbott@

Please visit our sites at blog.

thinking outside the box

Table Of Contents Table Of Contents

S&P 500 Index & Sectors

1

P/Es & VIX

2

Bonds

3

Yield Curve

4-5

High Yield Bonds

6

Municipal Bond Yields

7

Dollar & Commodities

8

Growth vs Value

9

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

10

Foreign Interest Rates

11

September 5, 2023 / Daily Markets Overview

Yardeni Research, Inc.



S&P 500 Index & Sectors

Figure 1.

5000

4800 S&P 500 STOCK PRICE INDEX

4600

(ratio scale, daily)

4400

4200

4000

3800

3600

3400

3200

3000 S&P 500 (4496.8)

2800

50-dma (4477.8)

200-dma (4170.8)

2600

2400

2200

2020

2021

2022

Note: Horizontal black lines are previous years' closing price index. Note: Shaded red areas are S&P 500 bear market declines of 20% or more. Yellow areas show bull markets. Source: Standard & Poor's.

Figure 2.

15

S&P SECTORS PERFORMANCE:

AUGUST 2023 MONTH-TO-DATE

10

(percent change from last trading day of July)

5000 4800 4600 9/5 4400 4200 4000 3800 3600 3400 3200 3000 2800 2600 2400 2200 2023

15

10

5

5

0

0

-5

-5

-10

August 2023

-15

S&P 500 Index (-1.8)

Consumer Discretionary (-1.3)

Consumer Staples (-3.8)

Energy (1.3)

-20

Financials (-2.9)

Health Care (-0.8)

Industrials (-2.3) Information Technology (-1.5) Materials (-3.5) Real Estate (-3.1) Communication

Services (-0.4) Utilities (-6.7)

-25 1 2 3 4 7 8 9 10 11 14 15 16 17 18 21 22 23 24 25 28 29

Source: Standard & Poor's.

August 2023 M-T-D

-10 -15 -20 -25

Page 1 / September 5, 2023 / Daily Markets Overview

Yardeni Research, Inc.



P/Es & VIX

Figure 3.

28

28

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

26

(daily)

26

24

S&P Forward P/Es

22

S&P 500 (18.8)

S&P 400 (13.7)

20

S&P 600 (13.4)

18

24

22

20 9/5

18

16

16

14

14

12

12

10

10



8

8

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

* Daily stock price index divided by 52-week forward consensus expected operating earnings per share. Note: Shaded red areas are S&P 500 bear market declines of 20% or more. Blue shaded areas are correction declines of 10% to less than 20%. Yellow areas are bull markets. Source: Standard & Poor's and I/B/E/S data by Refinitiv.

Figure 4.

100

S&P 500 VIX

90

(daily)

100 Latest (14.0)

90

80

80

70

70

60

60

50

50

40

40

30

30

20

20

9/5

10

10



0

0

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 23 24 25 26

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

Page 2 / September 5, 2023 / Daily Markets Overview

Yardeni Research, Inc.



Figure 5.

8

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

6

Bonds

10-Year Treasury Bond Yield (4.27) TIPS Yield (1.98)

4

8 6 9/5 4

2

9/5

2

0

0



-2

-2

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Source: Federal Reserve Board.

Figure 6.

3.5

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

3.0

Expected Inflation Proxy (2.29) 2.5

2.0

3.5

3.0

2.5 9/5

2.0

1.5

1.5

1.0

1.0

.5

.5



.0

.0

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

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

Page 3 / September 5, 2023 / Daily Markets Overview

Yardeni Research, Inc.



Yield Curve

Figure 7.

5.4

5.2

US TREASURY 10-YEAR & 2-YEAR YIELDS & FED FUNDS RATE

5.0 4.8

(percent, daily)

4.6

4.4

4.2

4.0

3.8

Interest Rates

3.6

Fed Funds

3.4

Target Rate (5.38)

3.2

2-Year Yield (4.94)

3.0

10-Year Yield (4.27)

2.8

2.6

2.4

2.2

2.0

1.8

1.6

1.4

1.2

1.0

.8

.6

.4

.2

.0 2015

2016

2017

2018

2019

2020

2021

2022

Source: Federal Reserve Board.



5.4 5.2 9/5 5.0 4.8 4.6 4.4 9/5 4.2 4.0 3.8 3.6 3.4 3.2 3.0 2.8 2.6 2.4 2.2 2.0 1.8 1.6 1.4 1.2 1.0 .8 .6 .4 .2 .0 2023

Figure 8.

500

US YIELD CURVE SPREAD*

450

(basis points, daily)

400

500 Latest (-111)

450

400

350

350

300

300

250

250

200

200

150

150

100

100

50

50

0

0

-50

-50

-100

9/5

-100



-150

-150

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

* 10-Year Treasury yield less federal funds target rate Source: Federal Reserve Board.

Page 4 / September 5, 2023 / Daily Markets Overview

Yardeni Research, Inc.



Yield Curve

Figure 9.

5.8

5.8

5.6 5.4 5.2

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

5.6 5.4 5.2

5.0

9/5

5.0

4.8

4.8

4.6 4.4 4.2

Interest Rates 2-Year Treasury Yield (4.94)

4.6 4.4 4.2

4.0

Fed Funds Rate

4.0

3.8

12-month Forward Futures (4.91)

3.8

3.6

Federal Funds Target Rate (5.38)

3.6

3.4

3.4



3.2

3.2

3.0

3.0

2.8

2.8

2.6

2.6

2.4

2.4

2.2

2.2

2.0

2.0

1.8

1.8

1.6

1.6

1.4

1.4

1.2

1.2

1.0

1.0

.8

.8

.6

.6

.4

.4

.2

.2

.0

.0

-.2 2015

2016

2017

2018

2019

2020

2021

2022

2023

-.2 2024

Source: US Treasury & Chicago Mercantile Exchange.

Figure 10.

450

US TREASURY YIELD CURVE SPREAD: 10-YEAR MINUS-2-YEAR (basis points, weekly)

350

450 Latest (-75)

350

250

250

150

150

50

50

-50

-50

9/1

-150

-150



-250

-250

76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14 16 18 20 22 24 26

Note: Shaded areas are recessions according to the National Bureau of Economic Research. Source: Federal Reserve Board.

Page 5 / September 5, 2023 / Daily Markets Overview

Yardeni Research, Inc.



High Yield Bonds

Figure 11.

30

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

25

30 Latest (8.38)

25

20

20

15

15

10

10

9/5

5

5



0

0

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 23 24

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

Figure 12.

2600

YIELD SPREAD US HIGH-YIELD CORPORATE LESS

2400

10-YEAR US TREASURY BOND

(basis points, daily)

2200

2600 Latest (411)

2400

2200

2000

2000

1800

1800



1600

1600

1400

1400

1200

1200

1000

1000

800

800

600

600

400

9/5 400

200

200

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 23 24

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

Page 6 / September 5, 2023 / Daily Markets Overview

Yardeni Research, Inc.



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