AGA Chart Book for 02.08.2013


AGA Weekly Chartbook

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

1.    Global Financial Conditions

  • The S&P 500 moved higher this week, and is bullishly diverging from most assets classes
  • Treasury Yields, HY Bond Prices, Euro, ACWI, EAFE, EM, Oil, and Sentiment moved lower this week
  • U.S. Financial Conditions remain bullish but have stopped improving
  • European Financial Conditions have deteriorated this month
  • Emerging Markets have underperformed Developed Markets YTD
  • European Markets are under pressure MTD: Italy (-4.64%), Spain (-2.24%), France (-2.23%), Germany (-1.59%)
  • Spanish and Italian 10yr Bond Yields did not confirm the January rally in risk assets
  • S&P 500 P/E multiple is forecasted to contract from 14.96 to 12.29 over the next 24 months

2.    Interest Rates and Fixed Income

  • The US 10yr yield moved 7bps lower on the week, currently at 1.95% and back below resistance @ 2.00%
  • Investment Grade and High Yield Credit Spreads appear poised to widen
  • Investment Grade Bond Prices have broken down out of a 3 month sideways trading range
  • High Yield Bond Prices are rolling over from extended levels
  • 5 Year Forward Inflation Expectations are at 2.90%, 16 month highs

3.    Major Currencies

  • The Euro (+8.09%) is the strongest major currencies vs. USD over the last 6 months
  • The Japanese Yen (-15.38%) is the weakest major currencies vs. USD over the last 6 months
  • The South Korean Won is forecasted to be the strongest major currencies vs. USD (+4.51%) through Q2 2013
  • The Euro is forecasted to be the weakest major currencies vs. USD (-4.69%) through Q2 2013
  • The US Dollar has tested and held support @ 79 on the Dollar Index
  • EURO @ $1.336, down nicely on the week after Mario Draghi expressed concern about the E.U. recovery
  • MXN/USD @ 12.72, weakening from 12.60 last week (12 month lows are@ 12.54)

4.    Global Equity Markets

  • The ACWI, MSCI EAFE, and MSCI EM Indices all moved lower this week
  • The MSCI EM continues to show weak relative strength
  • MTD: China (+1.97%), Brazil (-2.11%), India (-2.06%), and Russia (-1.74%)
  • Healthcare (+8.47%) leads Global Sectors YTD, followed by Consumer Services (+7.31%)

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
  • The Economic Surprise Index has bounced back after breaking below its 4 week moving average last week
  • Initial Jobless Claims have come in higher than expected the last 2 weeks

6.    Commodities

  • Commodities (an equally weighted basket) remain in a medium-term downtrend
  • Gold @ $1667/oz., is down -0.54% YTD
  • Oil @ $95.72/barrel, has moved nicely higher from $85 in early December 2012
  • Gasoline (+8.66%), Platinum (+11.81%), and Cotton (+10.02%) lead major commodities YTD
  • Average Gas Prices continue to move higher, currently at $3.56/gallon

7.    Investor Sentiment

  • The VIX Index @ 13.02 is higher on the week, but remains near 5 year lows
  • Financial Stress remains low, but has increased over the last 2 weeks breaking above its 50DMA
  • Bullish Fund Flows have modestly reversed over the last 2 weeks
  • Bulls outnumber Bears by 13.2%, backing off from a gaudy 28.1%just 2 weeks ago
  • The Citi Macro Risk Index remains moderate, but has made a significant move higher YTD

8.    Accuvest ETFs

  • ACCU (Accuvest Global Opportunities): +0.87% YTD
  • AGLS (Accuvest Global Long Short): -0.54% 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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