Market Valuation:
The S&P 500 has retreated from all-time highs as the promise of a US China trade agreement has withered. Additionally, threatened tariffs against Mexico and new troubles with North Korea are weighing on the market. Recent extreme weather threatens to raise US agricultural prices which, in combination with continued and new tariffs, could reverse the benign inflation environment that has helped to elevate asset prices in recent years.
Source: Interactive Brokers Trader Workstation
US equity market prices are not expensive as measured by the current 4.11% Fed Model Risk Premium. This Risk Premium