Two key market indicators suggest a potential storm brewing for investors in 2025: a negative risk premium and overexposed fund managers.
Investing charts can sometimes signal a coming storm, and right now two key indicators are flashing warnings. The first chart tracks the 'Prospective Equity Risk Premium' (ERP), which measures the difference between expected returns on U.S. equities and safer options like Treasuries. Recently, the ERP has dipped below zero, meaning Treasuries could outperform equities. This is concerning because a negative risk premium flips traditional investing logic on its head.
When equities don't compensate for their extra risk, they lose their appeal.The second chart focuses on fund managers' positions in U.S. equity futures. It reveals that managers are more overexposed to equities than the historical average, approaching levels that typically signal market euphoria. This extreme exposure often precedes market corrections.These two indicators paint a concerning picture for 2025. The negative risk premium suggests equities aren't worth the gamble compared to Treasuries, while fund managers' bullish positioning hints that the market's optimism may already be priced in, setting the stage for a potential retrenchment
RISK PREMIUM EQUITIES FUND MANAGERS MARKET CORRECTION OVEREXPOSURE
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
14 lessons from 2025 to remember in 2025: BofA14 lessons from 2025 to remember in 2025: BofA
Read more »
My Hero Academia: Vigilantes Anime Gets April 2025 Premiere & Final Season Set for Fall 2025My Hero Academia, one of the most popular anime franchises in recent years, is getting both a spin-off anime and its final season. The spin-off, My Hero Academia: Vigilantes, will premiere in April 2025. The final season of the main series is set to air in autumn 2025
Read more »
Frankencar 2025: The best of the Motor Authority Best Car To Buy 2025 finalistsTaking the best bits from our award finalists this year, this latest creation is electric with power, style, and three rows of seats.
Read more »
AIMA Tech Unveils 2025 eBike Lineup at CES 2025AIMA Tech, a global leader in sustainable mobility, unveils its groundbreaking 2025 eBike lineup at CES 2025. The new lineup features eight new models and three upgraded designs, each tailored to meet diverse rider needs.
Read more »
Tesla is recalling almost 700,000 vehicles due to a tire pressure monitoring system issueThe recall includes certain 2024 Cybertruck, 2017-2025 Model 3, and 2020-2025 Model Y vehicles.
Read more »
Cramer Charts Four Key Economic Questions for 2025CNBC's Jim Cramer highlights four major macroeconomic uncertainties facing 2025, emphasizing the unknowns surrounding the 10-Year Treasury yield, the labor market, Wall Street performance, and corporate earnings growth.
Read more »