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Investment outlook
Macro market monitor
Looking at the big picture
The Macro Dashboard provides a quantitative snapshot of the state of the U.S. economy and markets. With a consistent scorecard, investment committees can use this tool to evaluate periodic changes in conditions, prioritize research and drive dialogue that ultimately results in better informed portfolio strategy.
Inflation: Trailing inflation remained relatively consistent over the last few months, while trending broadly downward. Forward looking inflation expectations expect the disinflation process to continue.
U.S. monetary policy: Still restrictive, despite the U.S. Federal Reserve cutting by 75 basis points (bps) in the latter half of the year. Financial conditions tightened slightly though.
Economic activity: This category has improved, so we are upgrading the shading to green. Consumer expectations, housing starts and economic surprises have all improved.
Employment: Healthy, with jobless claims still near cyclical lows and job openings well above its long-term average. Some cracks may have started to appear in employment data, but only marginally so and we will continue to monitor.
Investor sentiment: We are downgrading this category to red. Individual sentiment has improved; however this is a contrary signal. Broad investor sentiment has also fallen away lately.
U.S. equity fundamentals: This category remains mostly unchanged since our last update, with earnings ratios still elevated versus historic norms. However, expected earnings growth has marginally weakened.
Nuveen Macro Market Monitor informs our discussions
| Positive | Neutral | Negative |
| Category | Gauge | Percentile Rank (vs Past 20 Years, Higher Rank = Potential Headwind to Markets) | Current |
|---|---|---|---|
| Inflation |
Long-term inflation expectations | 40 | 2.20 |
| U.S. Monetary Policy |
Fed funds rate | 84 | 4.75 |
| Financial conditions | 23 | 99.1 | |
| Economic Activity |
Consumer expectations | 39 | 78.5 |
| Household debt service ratio | 22 | 9.8 | |
| Housing starts | 38 | 1354 | |
| Economic surprises | 21 | 43.3 | |
| Employment |
Jobless claims | 12 | 217 |
| Job openings | 19 | 7.4 | |
| Investor Sentiment | Broad investor sentiment | 52 | 0.0 |
| Individual investor survey | 83 | 21.5 | |
| U.S. Equity Fundamentals |
S&P 500 forward price to earnings ratio | 96 | 21.9 |
| S&P 500 forward expected earnings growth |
28 | 15.5 | |
| Revisions to expected earnings | 64 | 1.7 | |
Data source: Bloomberg, L.P., 15 Nov 2024. Performance data shown represents past performance and does not predict or guarantee future results. The views above are for informational purposes only and do not reflect the experience or performance of any Nuveen product, strategy or service. The color scale is based on each metric’s percentile rank as compared to its 20-year average. A lower percentile ranking indicates a positive or less of a concern to its impact on the economy while a higher percentile ranking indicates a negative or more of a concern to its impact on the economy. Green: 1st-33rd percentile; Yellow: 34th-67th percentile; Red: 68th-100th percentile. Representative indexes: long-term inflation expectations: U.S. 5yr 5yr forward breakeven; fed funds rate: federal funds target rate - upper bound; financial conditions: GS U.S. Financial Conditions Index; consumer expectations: U of Michigan Consumer Expectations Index; household debt service ratio: household debt payment as % of disposable income; housing starts: U.S. New Privately Owned Housing Units Started by Structure Total SAAR; economic surprises: Citi U.S. Economic Surprise Index; jobless claims: U.S. initial jobless claims; job openings: U.S. job openings by industry total; broad investor sentiment: Morgan Stanley Market Sentiment Indicator Signal; individual investor survey: AII U.S. Investor Sentiment Bullish Minus Bearish Readings; S&P 500 forward price to earnings ratio: S&P 500 Forward FY1 P/E; S&P 500 forward expected earnings growth: S&P 500 FY1 EPS Growth; revisions to expected earnings: S&P 500 3-Month Change in FY1 EPS. |
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