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Data Update 1 for 2025: The Draw (and Danger) of Data

Musings on Markets

Thus, as you peruse my historical data on implied equity risk premiums or PE ratios for the S&P 500 over time, you may be tempted to compute averages and use them in your investment strategies, or use my industry averages for debt ratios and pricing multiples as the target for every company in the peer group, but you should hold back.

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Anatomy of a Market Crisis: Tariffs, Markets and the Economy!

Musings on Markets

Breaking down just US equities, by sector, we can see the damage across sectors: The technology sector lost the most in value last week, both in dollar terms, shedding almost $1.8 There was undoubtedly some panic selling on Friday, but the flight to safety, whether it be in moving into treasuries or high dividend paying stocks, was muted.

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Market Bipolarity: Exuberance versus Exhaustion!

Musings on Markets

While the rise in treasury rates has been less dramatic this year, rates have continued to rise across the term structure: US Treasury While short term rates rose sharply in the first half of the year, and long term rates stabilized, the third quarter has sen a reversal, with short term rates now stabilizing and long term rates rising.

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Market Resilience or Investors In Denial? A Mid-year Assessment for 2023!

Musings on Markets

In my second data update post from the start of this year , I looked at US equities in 2022, with the S&P 500 down almost 20% during the year and the NASDAQ, overweighted in technology, feeling even more pain, down about a third, during the year.

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Data Update 2 for 2024: A Stock Comeback - Winning the Expectations Game!

Musings on Markets

The first is that it was an uneven recovery, if you break stocks down be sector, which I have, for both US and global stocks, in the table below: As you can see, technology was the biggest winner of the year, up almost 58% (44%) for US (global) stocks, with communication services and consumer discretionary as the next best performers.

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Data Update 6 for 2025: From Macro to Micro - The Hurdle Rate Question!

Musings on Markets

In the first five posts, I have looked at the macro numbers that drive global markets, from interest rates to risk premiums, but it is not my preferred habitat. The second set of inputs are prices of risk, in both the equity and debt markets, with the former measured by equity risk premiums , and the latter by default spreads.

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Use of Discounted Cash Flow Approaches in US GAAP Accounting

ThomsonReuters

Discounted cash flow approaches are also utilized within other functions of an organization, such as treasury, budgeting, financial planning and analysis, and tax planning. The adjustment added to the risk-free rate to arrive at the risk-adjusted rate is often referred to as the “risk premium.”