Investment insights from Capital Group
Stocks, bonds and the 60/40 blend far outpaced CDs
Past results are not predictive of results in future periods.
Source: Bloomberg. Index returns as of 30 September 2024. One-year CD rate represents the hypothetical return a locked-in certificate of deposit would have provided if locked in for 12 months based on Bankrate.com's US one-year High Yield Savings Rate as of 30 September 2024. The 60/40 blend shown represented by 60% S&P 500 Index and 40% Bloomberg US Aggregate Index.
Bond yields have continued to fall after the first rate cut
Sources: Source: Capital Group, Bloomberg. Figures reflect averages from seven rate-cutting cycles initiated by the US Federal Reserve with data from May 1984 to December 2019.
Opportunities exist even in a narrow market
Past results are not predictive of results in future periods.
Source: FactSet. As of 31 August 2024. Forward P/E (price to earnings) ratio represents the forward P/E ratio for the current fiscal year. A higher forward P/E can indicate an undervalued stock and/or that investors think there will be significant future growth. A lower forward P/E can represent the opposite. Estimated earnings growth is an annual growth figure. Magnificent Seven stocks were the top seven contributors to returns for 2023 in the S&P 500 Index.
After Fed hikes ended, long-term results outpaced cash and historic averages
Past results are not predictive of results in future periods.
Sources: Capital Group, Morningstar. Chart represents the average returns across respective sector proxies starting in the month of the last Fed hike in the last four transition cycles from 1995 to 2018 with data through 30 September 2024. The 60/40 blend represents 60% S&P 500 Index and 40% Bloomberg US Aggregate Index. Long-term averages represented by the average five-year annualised rolling monthly returns from 1995.
Market Volatility
European Equity
U.S. Equities
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Past results are not predictive of results in future periods. It is not possible to invest directly in an index, which is unmanaged. The value of investments and income from them can go down as well as up and you may lose some or all of your initial investment. This information is not intended to provide investment, tax or other advice, or to be a solicitation to buy or sell any securities.
Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. All information is as at the date indicated unless otherwise stated. Some information may have been obtained from third parties, and as such the reliability of that information is not guaranteed.
Capital Group manages equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.