AGA Chart Book – April 12, 2013


AGA Weekly Chartbook

1.    Global Financial Conditions

  • The ACWI, EAFE, and S&P 500 made new 12 month highs this week
  • U.S. and European Financial Conditions remain at levels conducive to risk taking
  • S&P 500 P/E multiple is forecasted to contract from 15.7 to 12.9 over the next 24 months
  • Consensus earnings growth for FY 2013 is forecasted at a lofty 12.8%

2.    Interest Rates and Fixed Income

  • TLT (20+ year Treasuries) has broke out of a well-established 9 month downtrend
  • The US 10yr yields have made a significant move lower over the last 4 weeks, currently @ 1.72%
  • Investment Grade Bonds broke out to new highs as spreads approach 12 month lows
  • High Yield Bonds made new highs this week, but appear to be extended and losing momentum
  • 5 Year Forward Inflation Expectations are subdued at 2.72%, down from 2.88% over the last four weeks

3.    Major Currencies

  • The Mexican Peso (+6.6%) and Japanese Yen (-20.3%) are the strongest and weakest major currencies vs. USD over the last 6 months
  • The US Dollar has rallied nicely from support @ 79 but failed to make new 12 month highs and break its 3 year down trend
  • EURO @ $1.311, up from $1.299 this week
  • MXN/USD @ 12.08, strengthening from 12.35 last week and making new 12 month lows

4.    Global Equity Markets

  • The S&P 500 broke out to 12 month highs and all-time highs this week
  • The MSCI EAFE remains below 12 month highs
  • Healthcare (+20.9%) leads Global Sectors YTD; Basic Materials lag all sectors (-2.3%) YTD
  • Asia Pacific (+18.66%) leads global regions YTD; BRICs lag all regions (-0.7%)
  • AGA Top Ranked Countries – MTD: #1 Turkey: +0.36%, #2 Japan: +9.44%, #3 Germany: +2.26%, #4 Russia: -1.82%, #5 Switzerland: +2.16%

5.    The Economy

  • ISM Manufacturing, Employment, Consumer Confidence, and Retail Sales have all missed expectations in April
  • Housing, Real Estate, Labor, and the Personal Sector have been the bright spots of the US Economic Recovery
  • Business Cycle Indicators and the Industrial Sector have been disappointing
  • Economic Data has been worse than expected over the last 8 weeks

6.    Commodities

  • Commodities (an equally weighted basket) remain in a medium-term downtrend
  • Gold @ $1483/oz., down $98 on the week and at levels last seen July 2011
  • Gold to Gold Miners Ratio has pushed to new highs @ 12.74
  • Oil @ $91.29/barrel, is testing a 10 month uptrend
  • Average Gas Prices have stopped moving higher, currently at $3.62, down from $3.77 five weeks ago

7.    Investor Sentiment

  • The VIX Index @ 12.06, down from 14 last week
  • Financial Stress dropped substantially over the last 2 weeks, but remains in a modest uptrend
  • Fund flows have not been overly bullish
  • AAII Bearish sentiment surged 26% last week (3rd largest increase since 1987), % Bearish now outnumber % Bullish by 35%

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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