Stocks Retreat: Here's Why Current Valuations Make Sense

The video discusses the current state of the equity and Treasury markets, highlighting low interest rates and market valuation. It examines the lack of earnings growth despite high market levels and anticipates a return to profit growth in the latter half of the year. The discussion includes economic indicators like the ISM survey and the impact of the dollar and energy prices. Investment strategies focus on dividend-paying companies and global opportunities, particularly in emerging markets and international equities, with an emphasis on diversification.

What is the real earnings yield mentioned in the first section, and how does it compare to historical averages?

• Near 2%, below historical averages

• Near 4%, close to historical averages

• Near 6%, above historical averages

• Near 8%, significantly above historical averages

What is the main reason for skepticism about profit growth in the second half of the year?

• Past unmet expectations of growth

• Rising interest rates

• Decreasing consumer demand

• High inflation rates

Which economic indicator is showing positive movement, suggesting a potential economic turnaround?

• Unemployment rate

• ISM survey

• Consumer confidence index

• Housing market index

What is a key investment strategy mentioned in the third section for uncertain times?

• Focusing on companies with high cash flow and dividends

• Investing solely in technology stocks

• Avoiding international markets

• Investing in high-risk stocks

How do international developed equities compare to the US stock market according to the third section?

• They have similar valuations and dividend yields

• They are more volatile with unpredictable yields

• They are less expensive with higher dividend yields

• They are more expensive with lower dividend yields