Our stock/bond asset-allocation model (the Stock-Bond Barometer) is indicating that stocks are the asset class offering the most value at the current market juncture. Our model takes into account real-time levels and forecasts of short-term and long-term government and corporate fixed income yields, inflation, stock prices, GDP, and corporate earnings, among other factors. The output is expressed in terms of standard deviations to the mean, or sigma. The mean reading, going back to 1960, is a modest premium for stocks, of 0.15 sigma, with a standard deviation of 0.97. So stocks normally sell for a slight premium valuation, which they essentially have for the past 30 months. But the current valuation level is a 0.10 sigma discount for stocks, reflecting in large part the recent move lower in long-term interest rates. Other valuation measures also show reasonable multiples for stocks. The current forward P/E ratio for the S&P 500 is approximately 20, within the normal range of 13-24. The current S&P 500 dividend yield of 1.2% is below the historical average of 2.9%, but is also 29% of the 10-year Treasury bond yield, compared to the long-run average of 39% and the all-time low of 18%. Further, the gap between the S&P 500 earnings yield and the benchmark 10-year government bond yield is about 350 basis points, compared to the historical average of 400 and nose-bleed valuation levels of 200. Lastly, the ratio of the S&P 500 price to an ounce of gold is now 2.1, within the historical range of 1-to-3. We expect the results from our stock-bond valuation model to tilt more toward stocks, as interest rates head lower into 2025 and EPS growth picks up. Based in part on the output from our model, our recommended asset-allocation for growth accounts is 70% growth assets and 30% fixed income.

A large-cap financial services company, Moody's provides credit ratings on 11,000 corporate issuers and 18,000 public finance issuers in 120 countries. Its analytics division provides clients with financial analysis and risk management services. The stock is a component of the S&P 500. The company has 15,000 employees.

U.S. stocks fell on Thursday on disappointing results from Tech companies. Both the S&P 500 and the Nasdaq posted their largest one-day losses since the beginning of September. The S&P 500 was down 1.9%, the Nasdaq lost 2.8% and the Dow fell 0.9%. Both crude oil and gold traded higher.

Moody’s, along with S&P Ratings, is a leading provider of credit ratings on fixed-income securities. The ratings segment, Moody’s Investors Service, includes corporates, structured finance, financial institutions, and public finance ratings. MIS represents a majority of the firm’s profit and about half the firm's revenue. The other segment, Moody’s Analytics, consists of decision solutions, research and insights, and data and information.