InterMarket Analysis Update for Monday September 8, 2025

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Intermarket Analysis Video Update Summary (Prepared for September 8, 2025)
This weekly video analyzes various market indicators to provide insights into the S&P 500 and broader market trends, covering valuation, growth vs. value, sectors, inflation, and intermarket correlations.
1. S&P 500 Valuation:
Historical: The S&P 500 is expensive, with a P/E ratio requiring a drop to below 4,400 for a P/E of 20. The Shiller CAPE ratio is 38.93, well above historical median/mean (double), indicating overvaluation for years.
Forward-Looking: Forward P/E ratios show MegaCap 8 at 29.1, S&P 500 at 22.1, while mid and small caps are more reasonably priced around 15, appealing to fundamental investors. Valuation is informational, not a timing tool.
2. Growth vs. Value:
Growth continues to outperform value, maintaining an uptrend, though value has gained traction since early August, suggesting a slight defensive shift. Ratios confirm growth’s dominance, but a decline could signal market weakness.
Small and mid-cap growth-to-value ratios show sideways movement, with small caps weakening slightly, raising mild concerns.
3. Inflation Analysis:
Long-term CRB index trends upward (potentially inflationary), but short-term daily charts show a range-bound pattern. Baltic Dry Index is in an uptrend but testing its 50-day moving average.
Inflation expectations are declining, with the long-term inflation-to-deflation ratio rising, but not yet confirmed as a strong trend. Commodities including aluminum, corn, and wheat are in downtrends (non-inflationary), while fertilizer and lumber show mixed signals. Oil is declining, and gold is rising, impacting ratios.
4. Other Markets:
Copper: Below moving averages, declining after a weak employment report, signaling potential economic concerns.
Gold/Silver: Gold is breaking out, silver in an uptrend, with the gold-to-silver ratio stabilizing.
U.S. Dollar: In a long-term downtrend, stabilizing recently, with the euro and yen in uptrends against it.
Bonds: Bond prices are rising as yields (e.g., 10-year) decline, with high-yield and corporate bonds performing well post a weak employment report, hinting at economic slowdown fears.
5. Sector and Index Analysis:
S&P 500 Sectors: Communication and discretionary sectors are strong, with discretionary outperforming staples (positive). Energy, financials, utilities, and healthcare underperform the S&P, with real estate benefiting from lower rates.
Semiconductors: Holding at the 50-day moving average, not leading but stable.
Indexes: S&P 500 and NASDAQ near all-time highs, with the S&P 100 outperforming. Small caps show improvement but lag long-term. Equal-weight S&P underperforming the weighted version, indicating mega-cap dominance.
6. Intermarket Correlations:
Stocks outperforming bonds and commodities on a daily basis, but commodities leading long-term. The S&P and dollar moving inversely, while S&P vs. oil and yields showing shifting correlations.
Dow Theory shows non-confirmation (transports lagging), but utilities and broad indexes (e.g., NYSE, Wilshire 5000) remaining solid.
7. Positive/Negative List:
Positive: Most tracked areas (e.g., stocks, bonds, emerging markets, Bitcoin) are positive.
Negative: Only the U.S. dollar remains negative, supporting other asset classes’ strength.
Key Takeaways:
The S&P 500 remains expensive but resilient, with growth outperforming value and a slight defensive shift noted. Inflation signals are mixed, with declining expectations but some long-term inflationary pressures. Bonds are gaining as yields drop, and economic indicators (e.g., copper, employment) raise concerns to watch. The S&P 500 and broader indexes are near highs, driven by mega-caps, but small caps and transports are lagging. The dollar’s weakness continues to support the markets.

PDF of Slides:
https://drive.google.com/file/d/18h-swZtutegcaSdgxBKlnD75K1qzJuAg/view?usp=sharing

DISCLAIMER This video is for entertainment purposes only. I am not a financial adviser, and you should do your own research and go through your own thought process before investing in a position. Trading is risky!