Guide To The Markets – US Q4 2021

J.P. Morgan Asset Management

David Kelly

Research

71 Pages

J.P. Morgan’s Guide to Markets Q4 2021 provides a broad snapshot of global economic conditions, asset valuations, and market dynamics as investors navigate a post-pandemic environment. It highlights elevated equity valuations and historically low bond yields, suggesting future returns may be more muted than prior cycles.

Key Takeaways

Extreme Market Concentration: The top 10 S&P 500 stocks account for nearly 30% of total index weight, the highest concentration on record and comparable only to the late 1990s peak.
Valuation Gap Widens: Top 10 S&P 500 companies trade at roughly 28.1x earnings versus 19.2x for the rest, a spread near levels last seen around 2000.
Consumer Balance Strength: U.S. household debt service sits near 8.5% of income, the lowest since 1980, while net worth has doubled versus 2007 levels.
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