AGA Chart Book for 02.22.2013


AGA Weekly Chartbook

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

1.    Global Financial Conditions

  • The S&P 500 moved lower by 0.22% this week and is up 1.37% MTD
  • U.S. Financial Conditions have pulled back from 12 month highs
  • European Financial Conditions have deteriorated this month
  • Emerging Markets have underperformed Developed Markets YTD
  • European Markets are under pressure MTD: Italy (-6.91%), Spain (-2.19%), France (-0.71 %), Germany (-1.47%)
  • Spanish and Italian 10yr Bond Yields, 5.12% and 4.44% respectively, did not confirm the January rally in risk assets
  • S&P 500 P/E multiple is forecasted to contract from 14.97 to 12.27 over the next 24 months
  • Consensus earnings growth for FY 2013 is a lofty 10.3%

2.    Interest Rates and Fixed Income

  • The US 10yr yield moved 4bps lower on the week, and continues to struggle with resistance @ 2%
  • Investment Grade credit spreads remain in a 4 month sideways trend around a 1.8% spread over US Treasuries
  • 5 Year Forward Inflation Expectations are at 2.79%, down 0.15% on the week

3.    Major Currencies

  • The Euro (+5.31%) is the strongest major currencies vs. USD over the last 6 months
  • The Japanese Yen (-15.89%) is the weakest major currencies vs. USD over the last 6 months
  • The Canadian Dollar is forecasted to be the strongest major currencies vs. USD (+3.19%) through Q2 2013
  • The Swedish Krona is forecasted to be the weakest major currencies vs. USD (-1.88%) through Q2 2013
  • The US Dollar has bounced nicely from support @ 79, currently @ 81.46 on the Dollar Index
  • EURO @ $1.3194, down from 1.33 last week
  • MXN/USD @ 12.70, weakening from 12.69 last week (12 month lows are@ 12.54)

4.    Global Equity Markets

  • The ACWI, MSCI EAFE, and MSCI EM are all consolidating near recent 12 month highs, but are at risk of losing upward momentum
  • Over the last 12 months (in USD): Turkey (+25%), Thailand (+24%), and Australia (+23%) lead global markets
  • Healthcare (+9.90%) leads Global Sectors YTD, followed by Consumer Goods (+7.64%), Basic Materials are down -0.14% YTD

5.    The Economy

  • Housing, Real Estate, and the Labor Market have been bright spots of the US Economy
  • The Industrial Sector and Business Cycle Indicators are improving
  • The Philly Fed manufacturing report came in at -12.5, missing expectations
  • The Economic Surprise Index has broken back below its 4 week moving average

6.    Commodities

  • Commodities (an equally weighted basket) remain in a medium-term downtrend and are at 8 month lows
  • Gold @ $1581/oz., is down from $1610/oz. just one week ago
  • Oil @ $93.13/barrel, down from $95.86 last week, but nicely higher from $85 in early December 2012
  • Gasoline (+9.52%), Platinum (+4.96%), and Cotton (+8.32%) lead major commodities YTD
  • Average Gas Prices continue to move higher, currently at $3.78, up from $3.64/gallon last week

7.    Investor Sentiment

  • The VIX Index @ 14.17, up from 12.46 on the week
  • Financial Stress remains low, but has been quietly increasing the last 2 weeks
  • Bullish Fund Flows deteriorated this week
  • Bulls outnumber Bears by 9.29%, backing off from a gaudy 28.1%just 4 weeks ago
  • The Citi Macro Risk Index spiked this week, but remains moderate

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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