Author: isabelnet

USA – Explaining 10-Year Yields This great chart suggests that demographics and globalization explain U.S. 10-year yields. Image: Arbor Research & Trading LLC

Zombie Companies on the Rise Investor demand for leveraged loans and artificially low interest rates have created zombie firms. Image: Quick Factset

MOVE vs. Treasury Term Premium This chart shows the nice correlation between MOVE (implied volatility of U.S. Treasury markets) and the Treasury term premium. The term premium is the risk premium (or the bonus) that investors receive for the risk of owning longer-term bonds. Image: Longview Economics, Macrobond

China A-shares Held by Foreign Investors Despite the opening of the Chinese financial markets, foreign investors hold just 3% of of all China A-shares. Image: The Institute of International Finance

ISM Manufacturing Index and S&P 500 Cyclicals vs. Defensives This chart shows the nice correlation between ISM Manufacturing Index and S&P 500 Cyclicals vs. Defensives. Image: Nordea and Macrobond

U.S. Dollar to China Yuan (USD/CNY) Leads Semiconductor Sales This chart suggests that the U.S. Dollar to China Yuan (USD/CNY) leads semiconductor sales by four months. Keep a close eye on USD/CNY. Image: Nordea and Macrobond

Probability of US Recession Predicted by Treasury Spread Probability of US recession in the next 12 months: 31.48% Image: Federal Reserve Bank of New York

GDP-Based Recession Indicator Index This index measures the probability that the U.S. economy was in a recession during the indicated quarter. In Q1 2019, the probability of recession was 2.90%. When this recession indicator exceeds 35% (red line), history tells us that the probability of recession is increasing.

S&P 500 Bull and Bear Markets In recent history, past bear markets have been shorter than bull markets. Image: Charles Schwab

Wage Growth, Monetary Policy and S&P 500 When the spread between wage growth and the Fed funds rate is wide, it is generally positive for equities. Image: Topdown Charts

Tariffs Are Raising Prices for U.S. Consumers The charts show that U.S. consumer and producer prices have risen more quickly in tariff-affected categories. This is unfortunate in this late business cycle. Image: Goldman Sachs Global Research