AGA Chart Book for 02.01.2013


AGA Weekly Chartbook

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

1.    Global Financial Conditions

  • U.S. and E.U. Financial Conditions continue to be bullish and remain at 5 year high
  • Global equity markets are off to a strong start in 2013 •    Emerging Markets (+0.35%) have underperformed Developed Markets (+4.6%) YTD
  • Notable YTD Country Performance: US (+6.1%), Spain (+0.8%), China (+6.6%)
  •  The VIX moved above 14 through Thursday’s close, but dropped back to 12.9 to close flat on the week
  • Spanish and Italian 10yr Bond Yields have not confirmed the recent breakout in equities
  • S&P 500 P/E multiple is currently at 15.01 and is forecasted to contract to 12.32

2.    Interest Rates and Fixed Income

  • The US yield curve has steepened about 15bps over the last 12 months
  • The US 10yr yield moved 7bps higher on the week, currently at 2.02% (7 month highs) and above resistance @ 2.00%
  • Investment Grade Credit Spreads are trending sideways and appear poised to widen
  • Investment Grade Bond Prices broke down out of a 3 month sideways trading range
  • High Yield Bond Prices appear to be losing momentum and rolling over
  • 5 Year Forward Inflation Expectations are at 2.89%, near 12 month highs

3.    Major Currencies

  • The Danish Krone (+11.32%) and Euro (+11.57%) are the strongest major currencies vs. USD over the last 6 months
  • The Japanese Yen (-15.45%) and South African Rand (-5.55%) are the weakest major currencies vs. USD over the last 6 months
  • The Japanese Yen and South Korean Won are forecasted to be the strongest major currencies vs. USD through Q2 2013
  • The Euro and Swedish Krone are forecasted to be the weakest major currencies vs. USD through Q2 2013
  • The USD Index is testing 10 month lows at 79.00 support
  • There is divergence between Euro Analyst Forecasts and Euro Forward Rates, currently at 1.28 and 1.37 respectively
  • EURO @ $1.36, up nicely on the week after making 12 month highs
  • MXN/USD @ 12.60, strengthening from 12.71 last week.  12 month lows @ 12.54

4.    Global Equity Markets

  • In US Dollar terms, Italy (+10.02%) and Switzerland (+9.70%) lead Major Equity Markets YTD
  • The ACWI,  S&P500,and  MSCI EAFE are all making new 12 month highs
  • The MSCI EM is struggling to break above 12 month highs
  • Healthcare (+8.03%) leads Global Sectors YTD, followed by Financials (+7.27%)
  • Out of the G8 countries, Germany (12.6%) and Japan (12.3%) have the highest Equity Risk Premium

5.    The Economy

  • Housing, Real Estate, and the Labor Market have been bright spots of the US Economy
  • The Industrial Sector has been improving, but Business Cycle Indicators continue to disappoint
  •  The US Economy added 157K jobs in January
  • ISM Manufacturing PMI came in at 53.1, up from 50.5 and signaling expansion
  • Personal Income, Chicago PMI, Durable Goods, and Consumer Confidence all beat expectations
  • The Economic Surprise Index has bounced back after breaking below its 4 week moving average last week
  • Initial Jobless Claims popped to 368K after improving to 5 year lows at 330K last week

6.    Commodities

  • Commodities (an equally weighted basket) remain below November and September resistance
  • Gold @ $1667/oz., up $9 on the week
  •  Oil moved up to $97.77/barrel, moving nicely higher from $85 in early December 2012
  • Copper has trended higher from $3.44 to $3.78 over the last 3 months
  •  Average Gas Prices continue to move higher with the price of oil

7.    Investor Sentiment

  • The VIX Index is at 12.90 (near 5 year lows) after making 6 month highs @ 22.68 at the end of December
  • Financial Stress remains low, but has increased over the last 2 weeks
  • Fund Flows have improved nicely over the last 3 months, but retreated this week
  • Bulls outnumber Bears by 23.7%, backing off from a gaudy 28.1% last week
  • The Citi Macro Risk Index remains low, but has quietly moved higher YTD

8.    Accuvest ETFs

  • ACCU (Accuvest Global Opportunities): +3.04% YTD
  • AGLS (Accuvest Global Long Short): +0.04% YTD

Please feel free to forward any 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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