Stock Multiple Rerating – The Yield Curve Message

Broken Pie Chart

English - February 06, 2022 16:18 - 32 minutes - 30.1 MB - ★★★★★ - 16 ratings
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Previous Episode: Intrayear Selloffs – Misleading PE on Russell 2000?

Next Episode: US $30 trillion Debt w/ Higher Rates – Investors Want Hedges – Contrarian Corner

Derek Moore discusses how the recent selloff is due to a multiple contraction rather than an earnings one. How 2021 and now so far in Q1 22 stocks are rerating by shrinking the multiple. Plus, what the shape of the yield curve is telling us in light of expected Fed action on interest rates.

Driver of stock prices multiple declines vs earnings expansion

PE Ratios coming down on a forward basis

Earnings estimates on the S&P 500 Index for 2022 only shrink nominally

What is the yield curve

Yield curve steepness vs inversion

What the yield curve is telling us about views on continued economic expansion

Inversions before recessions

Inflation breakeven rates

Probability of Fed hikes updated

Mentioned in this Episode:

Contact Derek Moore [email protected]

Derek Moore’s Book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547?ref_=nav_signin&

Marcel Benjamin explains how TIPS bonds work https://podcasts.apple.com/us/podcast/tips-inflation-protected-bonds-explained-interest-rate/id1432836154?i=1000535445537

JP Morgan Guide to the markets https://am.jpmorgan.com/us/en/asset-management/protected/adv/insights/market-insights/guide-to-the-markets/

Fed Rate Probability Tool https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html