JPMorgan’s ultimate guide to markets and the economy

JPMorgan presentation on the state of the markets and the economy

The bull market in stocks reached its longest on record in August — at 3,453 days — and continues to add its seemingly unstoppable run.

And while the bull market has been a boon for investors, it also has them wondering what will cause the next downturn and how the current economic cycle will end.

To help investors make decisions in the final quarter of the year, JPMorgan published its insights on the state of  markets and the economy.

Here’s the snapshot: 

Equities: The S&P 500 has surged 331% since the bull market began in March 2009. Shares are currently trading at 16.8 times of their earnings. The price-to-earnings ratio, which measures whether a stock’s current market value fairly reflects its perceived value, is close to the 16.1 average multiple in the past 25 years, suggesting they are fairly valued. 

Earnings: At least partially thanks to President Donald Trump’s Tax Cut and Jobs Act that passed in December, S&P 500 corporations had their best quarterly results ever in the second quarter, earning $38.65 per share while the civilian unemployment rate fell to 3.9% in August, its lowest since 2002.

Fixed income: The Federal Reserve raised its key interest rate in September, for the third time this year, and signaled one more hike in 2018. The yield curves has flattened as market participants price in further interest rate hikes. 

Global markets: Affected by both domestic fiscal policies and other things like President Donald Trump’s tariffs, the US equity market has generated a 10.6% return this year, the highest in the world. Meawhile, European equity markets (excluding the UK) have negative 1.6% return, and emerging markets have negative 7.4% return.

Through the following slides, JPMorgan provides detailed insight into the state of equities and both the US and global economy.

Thanks to JPMorgan Asset Management for giving us permission to feature this presentation.