We posted three scary charts on Halloween (See here) and wanted to post three charts we are thankful for on Thanksgiving.

1) Household Debt Service Ratio
The household debt service ratio is the ratio of total required debt payments to total disposable income. Thanks to historically low interest rates, the ratio finished last quarter at its lowest reading in 40 years. The low ratio provided evidence of improving household finances that may lend support to consumer spending and the economy.

2) U.S. Corporate Earnings
The deepest contraction in U.S. economic history wasn’t mirrored by a deep contraction in corporate earnings. In fact, the decline in earnings is forecasted to be less than past recessions and analysts are expecting a rebound to an all-time high in 2021. The resilient earnings, particularly in technology, health care and consumer staples companies, has been a large factor in the U.S. stock markets quick recovery.

3) Non-US stock market valuations

As of quarter end, both Emerging Market and Developed Market stocks outside the United States were selling at some of their cheapest levels relative to their U.S. counterparts in the last 20 years. Low starting valuations have a strong track record of leading to better long-term returns. We may see stronger non-U.S. equity returns in the years ahead.

Happy Thanksgiving!

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Index Definitions
The Standard & Poor’s 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. It cannot be invested into directly.
The MSCI Emerging Markets Index is a float-adjusted market capitalization index that consists of indices of approximately 800 stocks and is designed to measure equity market performance in 23emerging economies: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, , Peru, Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey, and the United Arab Emirates.
The MSCI EAFE (Europe, Australasia, Far East) Index is a free float-adjusted market capitalization index of approximately 900 stocks and is designed to measure equity market performance in 21 developed market countries outside of North America.