In this webinar, Pure Financial Advisors' Director of Research, Brian Perry, CFP®, CFA®, gives an overview of the market activity in the third quarter of 2018.
8. Federal Funds Rate Expectations
FOMC and Market Expectations for the Fed Funds Rate
Source: Bloomberg, FactSet, Federal Reserve, J.P. Morgan Asset Management. Market expectations are the federal funds rates priced into the fed futures market as of the date of the September 2018 FOMC meeting and are
through September 2021. *Long-run projections are the rates of growth, unemployment and inflation to which a policymaker expects the economy to converge over the next five to six years in absence of further shocks and
under appropriate monetary policy. Guide to the Markets – U.S. Data are as of September 30, 2018.
9. Long-Run Bond Returns
Bloomberg Barclays U.S. Aggregate Index
Source: Bloomberg Barclays, FactSet, J.P. Morgan Asset Management. *2010s are from January 2010 to September 2013. R2 for bond yields and subsequent five-year returns is 86%. Past performance is not indicative of
comparable future results. Guide to the Markets – U.S. Data are as of September 30, 2018.
10. U.S. & International Equities at Inflection Points
MSCI All Country World ex U.S. and S&P 500 Indices
Source: FactSet, MSCI, Standard & Poor’s, J.P. Morgan Asset Management. Forward price to earnings ratio is a bottom-up calculation based on the most recent index price, divided by consensus estimates for earnings in the next 12
months (NTM), and is provided by FactSet Market Aggregates. Returns are cumulative and based on price movement only, and do not include the reinvestment of dividends. Dividend yield is calculated as consensus estimates of dividends
for the next 12 months, divided by most recent price, as provided by FactSet Market Aggregates. Past performance is not a reliable indicator of current and future results. Guide to the Markets – U.S. Data are as of September 30, 2018.
11. Forward Price-to-
Earnings Ratio and
Subsequent 5-Year
Annualized Returns
S&P 500 Total Return Index
Source: FactSet, Standard & Poor’s, Thomson Reuters, J.P. Morgan Asset Management. Returns are
60-month annualized total returns, measured monthly, beginning September 30, 1993. R2 represents
the percent of total variation in total returns that can be explained by forward P/E ratios. Guide to the
Markets - U.S. Data are as of September 30, 2018.
13. U.S. & International Equities at Inflection Points
MSCI All Country World ex U.S. and S&P 500 Indices
Source: JP Morgan; Bloomberg; IMF; Author’s calculations
14. Since Market Low
(March 2008)
Source: FactSet, Russell Investment Group, Standard & Poor’s, J.P. Morgan Asset Management. All calculations are cumulative total return, including dividends reinvested for the stated period. Since Market Peak represents
period 10/9/07 – 9/30/18, illustrating market returns since the S&P 500 Index high on 10/9/07. Since Market Low represents period 3/9/09 – 9/30/18, illustrating market returns since the S&P 500 Index low on 3/9/09. Returns are
cumulative returns, not annualized. For all time periods, total return is based on Russell style indices with the exception of the large blend category, which is based on the S&P 500 Index. Past performance is not indicative of
future returns. The price to earnings is a bottom-up calculation based on the most recent index price, divided by consensus estimates for earnings in the next 12 months (NTM), and is provided by FactSet Market Aggregates.
Guide to the Markets – U.S. Data are as of September 30, 2018.
372.4%
474.5%
415.8%
426.3%
480.2%
463.2%
498.4%
496.4%
510.6%
Value Blend Growth
LargeMidSmall
15. Growth Trumps Value
Total Return Russell 1000 Value / Russell 1000 Growth
Source: St. Louis Federal Reserve
16. Yield Curve
U.S. Treasury Yield Curve
Source: FactSet, Federal Reserve, J.P. Morgan Asset Management. Guide to the Markets – U.S. Data are as of September 30, 2018.
17. 10 Year Treasury Constant Maturity Rate
U.S. Treasury Yield Curve
Source: Board of Governors of the Federal Reserve System (US), fred.stlouisfed.org