Category: Blog

World Economy – Industry as Share of Total GDP Industry represented 25% of the world’s GDP in 2018, and a larger percentage of GDP in emerging countries than in developed countries. Image: howmuch.net

Housing – U.S. Construction Spending and Recessions Historically, when the three month moving average turned negative, a U.S. recession occurred within a 12-month period, 7 times out of 9. Image: Pictet Asset Management

University of Michigan Current Economic Conditions Index and Recessions This chart shows that historical drops of more than -20 points in consumer confidence current conditions have signaled recessions since 1979. The current drop stands at -15.9 points. Image: Knowledge Leaders Capital

S&P 500 EPS and South Korea Exports Chart showing the quite good correlation between S&P 500 EPS and South Korea exports, and suggesting this does not bode well for S&P 500 EPS. Image: Nordea and Macrobond

China Property Sales and Total Credit Growth According to Gavekal, Chinese monetary policy is still in a moderate “selective easing” mode. Image: Gavekal, Macrobond

S&P 500 Trailing Price-to-Earnings Ratio vs. Real Fed Funds Rate Great chart showing the S&P 500 12-month trailing P/E ratio vs. the real Fed funds rate (R² = 0.79). Image: Stifel

ISM Manufacturing Index and S&P 500 1-Month Return The current S&P 500 option implied 1-month return distribution is pricing a low probability of a right tail relative to historical realised. Image: Goldman Sachs Global Investment Research

Implied Probability of Fed Funds Rate in December 2020 The market thinks the Fed will cut rates below 1.75% by end of 2020, as the probability of recession increases. Image: J. Safra Sarasin

Trade War – Probability of a US-China Trade Deal The market-implied probability of a US-China trade deal rises to 40%. Image: Goldman Sachs Global Investment Research

China’s Global Acquisitions Global acquisitions by Chinese companies continue to fall, due to tight credit conditions and US-China trade tensions. Image: Financial Times