JPMorgan: These 66 charts are the ultimate guide to markets and the economy

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

Th key points include the bounceback of equities markets, and how that has run the price-to-earnings multiple of the S&P 500 above the pre-crisis peak from 2007.

Meanwhile, the yield-curve inversion and falling profit margins have sparked fears of a potential US economic slowdown, or even a recession.

For its part, the Fed has put its interest-rate hikes on hold, calming markets.

Equities:

• Equity markets have roared back from the volatility they experienced in the fourth quarter, with the S&P 500 up more than 11% year-to-date. The index is within 2% of its all-time high of 2,940.91 that was reached in September.
• The market's current price-to-earnings multiple of 16.4 times has exceeded the 2007 market peak's of 15.7 times, though well below the 2000 top of 27.2 times. However, the steady decline in the 10-year yield from 6.4% in 2000 to the current 2.5% makes comparisons difficult.

Earnings:

• S&P 500 profit margins have slipped to 10%, in-line with where they have tracked since 2011. Profit margins are known to fall sharply during recessions, driving market fears of an economic slowdown.
• Share buybacks, a source of recent political contention on both sides of the aisle, are now responsible for over half of earnings-per-share growth, which slowed markedly in the fourth quarter of 2018.

Fixed Income:

• The US yield curve briefly inverted, with the 2-year yield above the 10-year in 2019, prompting fears of a looming recession. An inversions has typically preceded a recession, though the lead time has ranged from seven to 19 months.
• Baa-rated corporate debt, the level just above debt considered "junk" or "high-yield", has risen to a record 50% of the outstanding US corporate debt market.

US Economy:

• The unemployment rate holds near post-war lows, sitting at 3.8% in December. Meanwhile, inflation remains subdued at 1.5%. The calm economic backdrop had positioned the Fed to rate hikes somewhat aggressively until stock-market volatility at the end of last year prompted a more "patient" stance.
• The US government deficit is forecast to reach nearly $900 billion in 2019, according to the Congressional Budget Office. The CBO predicted economic growth would approach 3% before slowing down next year.
• Household-debt-service ratios (as a percentage of disposable income) are back to multi-decade lows of 10%, driven by low interest rates as well as tax cuts. They have fallen significantly from their financial crisis peak of over 13%.

Global Markets:

• Stock markets around the world were in the green through the end of the first quarter. China's Shanghai Composite gained almost 24% to lead the major averages higher. In Europe, Britain's FTSE managed to book a more than 10% gain despite the uncertainty surrounding Brexit.

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.