SPY’s Dynamic Relationship with GDP Growth & Why it Matters Today
1. Rate sensitive vs. bond proxy stocks – too far, too fast?
2. EURGBP – upside risks
3. EM bonds – trend break or pause that refreshes?
SPY’s Dynamic Relationship with GDP Growth & Why it Matters Today
The way risky assets react to growth isn’t constant. Markets regularly flip between pricing for growth and pricing for risk.
Plenty of history backs this up:
• 1990s: P/Es tracked Fed policy more than the ISM
• 2009: Massive PE expansion despite negative earnings
• 2012: Draghi’s “Whatever it takes” turned the Eurozone around while it was still in recession
The point: equities discount the future, so PE expansion can offset weak growth data.
This is exactly why Qi’s risk-model framework matters — it helps you spot when markets switch regimes across macro factors.
Since 2021, there have been 3 distinct phases in SPY’s relationship with US GDP growth expectations
1. Jun 21 → Sep 23: Good news = good news
A clean macro regime. Stronger GDP → better earnings outlook → supportive for equities.
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