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Market Conditions
What does this economic data mean for markets? The US economy is still adding over 150k jobs a month, and a 4.1%
remains historically lower than the average of 5.7% going back to 1948
4
. The February CPI report was better than
expected, but a serious rise in inflation could have sent stocks and bonds plummeting. Markets are still nervous about
the impact of tariffs and economic growth, though. Tariff bark without too much bite would please Wall Street greatly.
Economists polled by Bloomberg are not yet forecasting a recession, despite the jittery US stock market.
In this environment, bonds and international stocks still look attractive as critical diversifiers while US stocks deal
with a growth scare amid higher large cap valuations. Bonds historically perform well when the economy loses steam.
International equities are benefiting from looser fiscal and monetary conditions in many countries and lower valuations
than the S&P 500, too. See Figure 4 below, recalling that the price to earnings ratio is a common valuation metric.
Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25
0
5
10
15
20
25
30
S&P 500 Developed Markets Emerging Markets
Price to Earnings Ratios
Source: Blended forward positive price to earnings ratio data from Bloomberg. As of March 13th, 2025. Developed Markets = MSCI EAFE. Emerging Markets = MSCI Emerging Markets.
4 Data from YCharts.
20250318-4330183
