AGA Chart Book for 03.08.2013


AGA Weekly Chartbook

1.    Global Financial Conditions

  • Global Equity markets rallied this week
  • U.S. Financial Conditions have improved to all-time highs, S&P 500 +8.76% YTD
  • European Financial Conditions have improved over the last two weeks
  • Emerging Markets have underperformed Developed Markets YTD, but rallied the most in 2 months to close this week
  • Japan (+18%), Switzerland (+13.5%), and Australia (10%) are leading developed markets
  • European Markets rallied this week, but have underperformed YTD: Italy (-0.43%), Spain (+5.64%), France (+5.47%)
  • Investment Grade Bonds and US Treasuries are becoming more highly correlated @ 0.85
  • Consensus earnings growth for FY 2013 is a lofty 10.4%

2.    Interest Rates and Fixed Income

  • The US 10yr yields surged this week, rallying 20bps on the week, currently @ 2.04%
  • Investment Grade spreads have stopped narrowing, currently @1.73% over Treasuries
  • High Yield credit spreads are on resistance @ 3.61% over Treasuries
  • 5 Year Forward Inflation Expectations are at 2.83%, up from 2.76% last week

3.    Major Currencies

  • The Brazilian Real (+4.37%) is the strongest major currencies vs. USD over the last 6 months
  • The Japanese Yen (-18.50%) is the weakest major currencies vs. USD over the last 6 months
  • The British Pound is forecasted to be the strongest major currencies vs. USD (+3.18%) through Q2 2013
  • The Brazilian Real is forecasted to be the weakest major currencies vs. USD (-1.56%) through Q2 2013
  • The US Dollar has bounced nicely from support @ 79, currently @ 82.71 on the Dollar Index
  • EURO @ $1.3005, down from 1.36 five weeks ago
  • The Mexican Central Bank cut interest rates by 0.50% this week
  • MXN/USD @ 12.67, strengthening from 12.76 last week (12 month lows are@ 12.54)

4.    Global Equity Markets

  • The ACWI and S&P 500 have broken out to 12 month highs
  • The MSCI EAFE and MSCI EM are remain below recent 12 month highs
  • Over the last 12 months (in USD): Turkey (+42%) and Australia (+28%) lead global markets
  • Healthcare (+14.47%) leads Global Sectors YTD, Basic Materials lag all sectors up 1.01% YTD
  • Asia Pacific (+12.21%) leads global regions YTD

5.    The Economy

  • Housing, Real Estate, and the Labor Market have been bright spots of the US Economy
  • Business Cycle Indicators are improving
  • Economic Data has surprised to the upside over the last 4 weeks
  • The US Payrolls beat expectations, reporting 236K new jobs added in February

6.    Commodities

  • Commodities (an equally weighted basket) appear to have bottomed this week, but remain in a medium-term downtrend
  • Gold @ $1578/oz., is down from $1576/oz. last week, support at $1550/oz.
  • Oil @ $91.95/barrel, down from $90.35 last week
  • Average Gas Prices have stopped moving higher, currently at $3.71, down from $3.77 last week

7.    Investor Sentiment

  • The VIX Index @ 12.59, down from 15.36 last week
  • Financial Stress remains low, and has dropped over the last 4 weeks
  • Fund Flows improved for the third week in a row
  • AAII Bears still outnumber Bulls by 7.45%, backing off from 8.6% last week
  • State Street Investor Confidence has broken out to 12 month highs

 

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.

Comments

  1. You rock, boy!

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