AGA Chart Book – July 12, 2013

AGA Weekly Chartbook

1.       Global Financial Conditions

  • Global Financial Conditions have improved, bouncing back from fear of “QE Tapering”
  • Macro Risk and Financial Market Stress have moderated
  • The VIX Index (implied S&P 500 volatility) decreased to 13.8 from 14.9 last week

2.       The Economy

  • Economic Data has been better than expected over the last 5 weeks
  • Better than expected economic data has come from the housing, retail, and business cycle indicators
  • Worse than expected economic data has come from the labor market and personal/household sectors
  • China GDP, Retail Sales, and Industrial Production will be reported this Sunday night, expectations are poor
  • Next week’s U.S. economic calendar includes data on Retail Sales, Industrial Production, Mortgage Apps, Housing Starts, & L.E.I.
  • 30 year Mortgage Rates are at fresh 18 month highs @ 4.81%, up from 4.70% last week

3.       Interest Rates and Fixed Income

  • 10 year US Treasury Yields closed the week at 2.58%, down from 2.74% last week
  • Investment Grade and High Yield Bonds rallied with Treasuries this week, up 1.5% and 3.0%, respectively
  • Investment Grade credit spreads widened slightly this week, currently at 1.80%
  • High Yield credit spreads narrowed nicely this week, currently at 3.79%

4.       Global Equity Markets

  • Global equities remain in a long-term uptrend
  • After correcting 7.5% from all-time highs, the S&P 500 found initial support near 1570 and bounced back to all-time highs
  • After diverging for most of 2013, the gap between equity prices and economic data has narrowed over the last 4 weeks
  • Year over Year estimates for Q2, Q3, and Q4 2013 U.S. earnings growth are 4%, 16%, and 27%, respectively

5.       Major Currencies

  • All major currencies are weaker relative to the USD over the last 6 months
  • MXN/USD @ 12.81, strengthening from 13.08 last week
  • USD/EUR @ 1.31, strengthening from 1.28 last week

6.       Commodities

  • Commodities (an equally weighted basket) remain in a cyclical downtrend
  • Gold @ $1285/oz., up from $1223/oz. last week
  • Crude Oil @ $105.95/barrel, up from $96.56/barrel two weeks ago and making new 12 month high

Best Regards,

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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