J.P. Morgan Asset Management examines cross asset market conditions entering 2016, spanning equities, rates, housing, credit, and global growth. The piece argues volatility spikes and weak earnings can coexist with expanding economies, while unusually low bond yields continue distorting valuations and investor behavior.
Guide to the Markets U.S. | 2Q 2016
J.P. Morgan Asset Management
Research
71 Pages
Key Takeaways
Valuation Disconnect: S&P 500 traded at 16.6x forward earnings versus a 15.8x 25 year average, despite 10 year Treasury yields falling to 1.8%.
Bull Market Persistence: The post 2009 bull market gained 204% across 86 months, exceeding the historical average bull return of 152% over 54 months.
Consumer Resilience: Household debt service fell to 10.1% of disposable income in 1Q16 versus 13.2% before the financial crisis, while net worth reached $88 trillion.
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