Volatility Divergence – VIX vs. MOVE

Volatility Divergence – VIX vs. MOVE When MOVE is below the 50th percentile and VIX is above the 80th percentile, the average annualized S&P 500 price performance has been close to +21% compared to just over +7% the rest of the time. Image: Bloomberg

S&P 500 vs. Corporate Profits After Tax

S&P 500 vs. Corporate Profits After Tax The current divergence between the S&P 500 and corporate profits after tax is the widest on record. It is possible to close the gap “down” with a recession. Image: Real Investment Advice

Global Political Uncertainty Index vs. VIX

Global Political Uncertainty Index vs. VIX This chart shows the wide divergence between the Global Political Uncertainty Index and VIX since 2015. More volatility ahead? Image: Legg Mason

U.S. Economy vs. Asset Prices

U.S. Economy vs. Asset Prices Persistent low interest rates could explain the wide divergence between real economy prices and asset prices, over the past decade. Image: Charles Schwab

Gold vs. Fed Funds Futures

Gold vs. Fed Funds Futures Chart showing the current divergence between gold and the implied Fed funds rate. Image: Longview Economics

Leverage in the U.S.: Households and Corporations

Leverage in the U.S.: Households and Corporations This chart shows the divergence between U.S. non-financial corporations leverage and households leverage. U.S. corporation debt reached a record level of $10.12tn. Image: Gavekal, Macrobond

U.S. Corporate Profits and 10Y-3M Yield Curve

U.S. Corporate Profits and 10Y-3M Yield Curve While the divergence between large-cap profits and the rest of the economy is the widest on record, the steepening yield curve suggests an earnings rebound. Image: BofA Global Research