MSCI Emerging Markets Index vs. World Semiconductor Sales This great chart suggests that world semiconductor sales lead the MSCI emerging markets index by 3 months. Very interesting chart before investing in emerging market equities. Country weights of the MSCI Emerging Markets Index: 33% China, 13.02% Korea, 11.35% Taiwan. Image: Nordea and Macrobond
Second-half Recovery in Growth? Better economic data could extend the business cycle. Currently, G7 & BRIC leading indicators remain encouraging and suggest no imminent recession. Image: Richardson Wealth
Can The U.S. 10-Year Treasury Yield Fall Further? Well, according to this chart, the U.S. 10-year treasury yield could fall further. The chart suggests that G4 central bank assets as percentage of GDP (1-year change) lead U.S. 10-year Treasury yield (1-year change) by one year. Image: Macrobond
The Ability of U.S. Companies to Service their Debt is Good In recent history, this chart suggests that poor ability of U.S. companies to service their debt leads to recession. That’s not the case today. This indicator suggests that there is no imminent recession on the horizon.
Do Central Banks’ Negative Rates Work in Europe? Not really. Actually, negative rates distort economies and leave little room to maneuver in the next recession. Secondly, extremely low interest rates are also bad for European banks, like Deutsche Bank, which in turn is bad for economic growth. It’s a feedback loop which could lead to…
The Trade-Weighted Broad US Dollar Index Hits the Highest Level since 2002 A strong dollar leads to wider trade deficits, and this is a headwind for US exporters. A strong dollar can also hurt emerging markets. The trade-weighted broad US Dollar index is a weighted average of the foreign exchange value of the US dollar against…
SELECT A STOCK MARKET FORECASTING MODEL STOCK MARKET VALUATION STOCK MARKET SHORT-TERM FORECAST STOCK MARKET EQUITY RISK PREMIUM STOCK MARKET EQUITY RISK PREMIUM STOCK MARKET BULL AND BEAR INDICATOR STOCK MARKET FORECASTING MODELS VS. US STOCK MARKET 97% CORRELATION, R² = 0.94 SINCE 1970 RECESSION INDICATORS LEADING INDICATORS
Why Are U.S. Banks Healthier Than Ever? U.S. banks are much stronger than ever. They have more capital and should withstand the next recession. See Fed’s annual stress test (Dodd-Frank Act Stress Tests): “The capital levels of the firms after the hypothetical severe global recession are higher than the actual capital levels of large banks…
Are We Near a Recession? “The leading index for each state predicts the six-month growth rate of the state’s coincident index. In addition to the coincident index, the models include other variables that lead the economy: state-level housing permits (1 to 4 units), state initial unemployment insurance claims, delivery times from the Institute for Supply…
Why Do Eurozone Bond Investors Accept Zero Long-Term Interest Rates? Because they have a deflationary view of the euro area economy. Now, investors are losing so much money just by holding German bonds in real terms (adjusted for inflation). Today, the Germany 10-Year bond yield hits 0% again. Keep in mind that raising interest rates in…