AGA Chart Book for 1.18.2013


AGA Weekly Chartbook

The Accuvest Weekly Chart Book provides a detailed update on the following:
1.    Global Financial Conditions

•    Financial Conditions continued to improve this week and remain at 5 year highs
•    Global equity markets are off to a strong start in 2013 (ACWI +3.4% YTD)
•    Emerging Markets (+0.74%) have underperformed Developed Markets (+2.37%) YTD
•    The VIX has crashed to 5 year lows @ 12.46, after making 6 month highs in December
•    Spanish and Italian 10yr Bond Yields are currently at 5.04% (-22bps MTD) and 4.16% (-34bps MTD) respectively
•    S&P 500 P/E multiples are forecasted to contract to 12.04 from 14.79

2.    Interest Rates and Fixed Income

•    The US yield curve is largely unchanged over the last 12 months
•    Spanish and Italian yield curves have shifted nicely lower over the last 12 months
•    US 10yr yield moved 3bps lower on the week, currently at 1.84% with support @ 1.56% and resistance @ 1.92%
•    Investment Grade Credit Spreads are trending sideways, currently @ 180bps (+2bps this week)
•    Investment Grade Bond Prices continue to trend sideways and now have negative momentum
•    The High Yield Bond Prices remain near new highs
•    5 Year Forward Inflation Expectations are at 2.79%, and appear to be near upside exhaustion

3.    Major Currencies

•    The Japanese Yen (-12.54%) and South African Rand (-8.08%) are the weakest major currencies vs. USD
•    The Norwegian Krone (+8.87%) and Euro (+8.44) are the strongest major currencies vs. USD over the last 6 months
•    The Japanese Yen and Singapore Dollar are forecasted to be the strongest major currencies vs. USD through Q2 2013
•    The USD Index has trended sideways over the last 3 months
•    There is divergence between Euro Analyst Forecasts and Euro Forward Rates, currently at 1.26 and 1.34 respectively
•    EURO @ $1.332, flat on the week and holding 8 month highs
•    MXN/USD @ 12.66, flat on last week and approaching 12 month lows @ 12.54

4.    Global Equity Markets

•    In US Dollar terms, Italy (+7.87%), Spain (+5.34%), and Switzerland (+8.01%) lead Major Equity Markets YTD
•    ACWI has broken above meaningful resistance and appears extended @ $49.59
•    SPY has broken above 2012 highs @ $148.11, and appears extended @ $148.33
•    EFA is making new 12 month  highs, currently trading @ $58.15
•    EEM is struggling to break above 12 month highs @ $44.91, currently trading @ $44.78
•    Healthcare (+6.05% on avg.) leads Global Sectors YTD, followed by Financials (+5.31%)
•    Western Europe (+4.85%) leads Global Regions YTD, followed by Asia Pacific Emerging (+4.42%)
•    Market Caps below $100M lead Global Market Caps

5.    The Economy

•    Housing, Real Estate, and the Labor Market have been the bright spots of the US Economy
•    Industrial Sector and Business Cycle Indicators continue to disappoint
•    Economic Surprise Index is testing its sideways trending 4 week moving average
•    Initial Jobless Claims broke to 5 year lows this week, currently @ 335K/week

6.    Commodities

•    Commodities rallied nicely this week, but remain below November and September highs
•    Gold @ $1684/oz., up $22 on the week
•    Oil moved up to $95.25/barrel, currently having its best weekly winning streak in 14 months
•    Average Gas Prices appear to have bottomed

7.    Investor Sentiment

•    VIX Index is at 12.46 (new 5 year lows) after making 6 month highs @ 22.68 at the end of December
•    Financial Stress remains low, but did increase this week
•    Fund Flows have improved nicely over the last 3 months
•    Bulls outnumber Bears by 16.6%
•    State Street Investor Confidence (a measure of portfolio exposure) remains near 5 year lows
•    The Citi Macro Risk Index remains low, but appears to have bottomed

8.    Accuvest ETFs

•    ACCU: +3.2% MTD
•    AGLS:  +0.8% MTD
•    ACWI: +3.4% MTD

9.    Bonus Charts

•    S&P 500 Index – 4 year trend vs. 2007 highs
•    Transports Index – breakout to all-time highs
•    Japanese Yen goes exponential as Bank of Japan targets 2% inflation
•    Chinese Electricity Consumption – YoY Growth Rate turns positive

Please feel free to forward and questions or suggestions.

Thanks,

James

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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