AGA Chart Book for 1.11.2013

1.11.2013 Chartbook

The Accuvest Weekly Chart Book for 1.11.2013 provides an update on the following:

1. Global Financial Conditions
  • Financial Conditions continued to improve this week and remain near 52 week highs
  • Global equity markets are off to a strong start in 2013 (ACWI +2.48% YTD)
  • Emerging Markets (+0.27%) have underperformed Developed Markets (+2.08%) YTD
  • After spiking to 22.72 at the end of 2012, the VIX Index has since plunged to 13.36 (@ 5 year lows)
  • Spanish and Italian 10yr Bond Yields are at 4.85% (-41bps MTD) and 4.12% (-38bps MTD) respectively
  • In local currency terms, Italy (+7.55%), Spain (+6.09%) and Switzerland (+5.36%) lead major developed markets MTD
  • In local currency terms, Turkey (+3.61%), South Africa (+2.63%) and Chile (+3.19%) lead major emerging markets MTD
  • S&P 500 P/E multiples are forecasted to contract to 11.92 from 14.81 by 2014
2. Interest Rates and Fixed Income
  • The US yield curve is largely unchanged over the last 12 months
  • US 10yr Yield moved 3bps lower on the week, currently at 1.87% with support @ 1.56% and resistance @ 1.92%
  • Investment Grade Credit Spreads, currently @ 178bps (-2bps this week), have narrowed modestly as treasury yields have rallied
  • Investment Grade Bond Prices continue to trend sideways below resistance
  • The High Yield Bond prices continue to make new highs
  • 5 Year Forward Inflation Expectations are at 2.82%, near twelve month highs
3. Major Currencies
  • The Japanese Yen (-10.56%) and South African Rand (-5.42%) are the weakest major currencies vs. USD over the last 6 months
  • The Norwegian Krone (+10.51%) and Euro (+9.01) are the strongest major currencies vs. USD over the last 6 months
  • The Japanese Yen, Singapore Dollar, and Canadian Dollar are forecasted to be strongest vs. USD through Q2 2013
  • The USD Index moved lower this week and appears poised to test support @ 79.00
  • There is divergence between Euro Analyst Forecasts and Euro Forward Rates, currently at 1.29 and 1.335 respectively
  • EURO @ $1.334, up $0.034 on the week, breaking out to 8 month highs
  • MXN/USD @ 12.66, strengthening from 12.80 last week and approaching 12 month lows @ 12.54
4. Global Equity Markets
  • In US Dollar terms, Italy (+7.55%), Spain (+6.09%), and Switzerland (+5.36%) lead Major Equity Markets YTD
  • ACWI has broken above meaningful resistance and appears extended @ $49.87
  • SPY remains below 2012 highs @ $148.11, and appears extended @ $147.07
  • EFA is making new 12 month highs, currently trading @ $58.04
  • EEM is struggling to break above 12 month highs @ $44.91, currently trading @ $44.47
  • Healthcare (+4.49% on avg.) leads Global Sectors YTD, followed by Financials (+3.90%)
  • Utilities (+1.40% on avg.) are the weakest Global Sector YTD
5. The Economy
  • Housing, Real Estate, and Employment have been the economic bright spot
  • Industrial Sector and Business Cycle Indicators continue to disappoint
  • Economic Surprise Index is testing its sideways trending 4 week moving average
  • Initial Jobless Claims have stopped moving lower
6. Commodities
  • Commodities have lost upward momentum and have broken below medium term support
  • Gold @ $1662/oz., up slightly on the week
  • Oil moved up to $93.56/barrel, up slightly on the week
  • Average Gas Prices appear to have bottomed
7. Investor Sentiment
  • VIX Index is at 13.36 (5 year lows) after making 6 month highs @ 22.68 just 2 weeks ago
  • Financial Stress remains low
  • Fund Flows have improved nicely over the last 3 months
  • Bulls outnumber Bears by 19.5%, up from 2.5% last week
  • State Street Investor Confidence (a measure of portfolio exposure) remains near 5 year lows
  • The Citi Macro Risk Index remains subdued
8. Accuvest ETFs
  • Since 12.31.2012: AGLS +0.63% vs. ACWI +2.38%
  • Since 12.31.2012: ACCU +1.27% vs. ACWI +2.48%
9. Bonus Charts
  • S&P 500 Index ā€“ 4 year trend vs. 2007 highs
  • Transports Index ā€“ potential breakout to 5 year highs
  • Japanese Yen goes exponential as BoJ loses political independence

disclosure: The opinions expressed in this Weekly Chart Book report are those of the author. The materials and commentary are strictly informational and should be used for research use only. This bulletin is not intended to provide investing or other advice or guidance with respect to the matters addressed in the bulletin. All relevant facts, including individual circumstances, need to be considered by the reader to arrive at investment conclusions that comply with matters addressed in this bulletin. Charts and information used in this report are sourced from Bloomberg.

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