Getting our heads back into markets, we reflect this week on the shape of public equities and fixed income. The S&P 500 has gained about 10% year-to-date, less than half of the 20% return for the comparable period in 2024. Similar figures for the DJIA are 7% and 10.5%, respectively. 

Ten-year Treasurys bottomed out a year ago at 3.6%, heading higher since then, and now at 4.2%. Rates since April have been in a range, thanks to tariff concerns. The S&P US Aggregate Bond Index stands at 4.5% year-to-date, while the comparable Bloomberg Agg is 3.75%. On the leveraged front, loans have gained 4.5% (per the Morningstar LSTA 100) and high-yield bonds returned between 5.6% and 6.25%, per the ICE BofA and Morningstar indices, respectively. 

KBRA’s Van Hesser spoke last month to asset returns in his podcast, Three Things in Credit. He refers to a Goldman research piece expecting annual equity returns of 3% over the next decade. In a world where S&P values stocks in the index today at 3.3 times sales, “an all-time high.”