InterMarket Analysis Update for Monday October 13, 2025

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Summary of Intermarket Analysis Video Update for October 13, 2025
This weekly video analyzes various markets and indicators beyond the S&P 500 to gain insights into its performance.
Key points include:
Valuation: The S&P 500 remains overvalued, with a PE ratio above 20 and a Shiller PE at 39.09, significantly above historical medians. Despite recent pullbacks, valuations remain high, even for forward-looking earnings. Small and mid-caps are more fairly priced (PEs of 14.9 and 15.7, respectively).
Growth vs. Value: The market has shown short-term defensive shifts since August, with growth outperforming value. However, both growth and value indices dropped significantly on Friday, with growth still leading in various ETFs and indices. Small and mid-cap growth-to-value ratios show mixed signals, with mid-caps performing better.
Inflation: A proprietary inflation chart raises concerns, but other indicators (e.g., CRB index, Baltic Dry Index) show no strong inflationary pressure. Inflation expectations remain stable, and TIPS (inflation-adjusted bonds) are only slightly outperforming, but no major inflationary signals are confirmed.
Other Markets:
Commodities: Aluminum is trending up, potentially signaling inflation, but corn, wheat, fertilizer, and lumber remain in downtrends. Oil is declining due to geopolitical developments (e.g., Middle East peace talks), and natural gas and diesel are also weaker. Copper, an economic barometer, fell 6% on Friday but remains in an uptrend.
Gold and Silver: Gold is overbought but has been rising, with silver outperforming (gold-to-silver ratio declining). Gold also outperforming oil and the US dollar.
Currencies: The US dollar index is weak but showing a slight recovery. The Japanese yen is close to a death cross against the dollar, potentially signaling a trend shift. The euro and British pound remain in uptrends against the dollar.
S&P 500 and Sectors:
The S&P 500 and other indices (e.g., NASDAQ, Dow) pulled back on Friday but remain above key moving averages. Small caps and transports underperformed, while utilities and healthcare (defensive sectors) showed relative strength.
Technology and semiconductors remain strong but were hit hard on Friday. Energy and financials are underperforming, with real estate sensitive to falling interest rates.
Bonds and Yields: The 10-year Treasury yield is nearing 4% and declining, reflecting a flight to safety. Bonds outperformed stocks on Friday, with junk bonds showing weakness. Bond volatility is rising, but correlations with stocks remain mixed.
Long-Term Trends: Stocks continue to outperform commodities and bonds on a monthly basis. The NYSE composite and S&P 500 is showing resilience, but global markets (e.g., China, Europe) are weakening. Bitcoin and high-yield loans remain in uptrends despite recent pullbacks.
Positive/Negative List: No changes in the positive list (includes Bitcoin, stocks, etc.). The US dollar index is the primary negative, with the Japanese yen nearing a death cross, which could shift trends.
Conclusion:
The S&P 500 shows overvaluation and defensive shifts, with growth outperforming value. Inflation signals are mixed, and commodities are weak except for copper and aluminum. The US dollar’s weakness has supported stocks, but a potential yen crossover may occur. Friday’s sell-off hit most sectors, but key indices remain above support levels, with utilities and healthcare showing defensive strength.

PDF of Slides:
https://drive.google.com/file/d/1JGMlcGg6Jlh6duj6CjiuWlJWw7fXdBth/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!