Search Results for: M2

U.S. Real M2 Growth and Inflation The United States is exposed to the risk of higher inflation, as the fiscal and monetary policies are the most expansionary. Image: Morgan Stanley Research

S&P 500 Market Cap/M2 Money Supply The S&P 500 market capitalization relative to M2 money supply suggests more upside. Image: Morgan Stanley Research

U.S. Money Supply M2 and Reserves of the Banking System U.S. money supply M2 shows significant jumps in growth, which could affect future inflation. Image: Financial Times

M2 Money Supply and S&P 500 vs. Japan M2 and Topix M2 is rising significantly in the U.S., as during the Japanese bubble market of the 1980s. Image: Gavekal, Macrobond

Federal Reserve Money Supply M2 Leads Global Manufacturing PMI Chart suggesting that the Federal Reserve money supply M2 leads global manufacturing PMI by 18 months. Image: Nordea and Macrobond

Cash Allocation by Non-Bank Investors Globally “Cash is king” is starting to sound like a relic. Non-bank investors globally are holding less cash than at any time since at least 1999, leaving financial markets exposed to sudden shocks. Image: J.P. Morgan

Total Debt vs. U.S. GDP vs. Monetary Velocity The rise in debt has coincided with a collapse in M2 velocity. Image: Real Investment Advice

Correction – S&P 500 and Marshallian K With U.S. GDP growing faster than M2 money supply, the S&P 500 is vulnerable to a correction. Image: Bloomberg

U.S. Core Inflation Expected Over the Next 21 Months (Leading Indicator) M2 velocity year-over-year tends to lead U.S. core CPI by 21 months (R² = 0.52 since 1996).  It has been quite accurate for more than 20 years. Click the Image to Enlarge

U.S. Excess Liquidity Growth Leads S&P 500 Returns This chart suggests that M2 money supply to nominal GDP ratio leads S&P 500 returns by one year. Is the S&P 500 vulnerable to a drop, followed by a recovery? Image: Oxford Economics, Macrobond

China – Equity Returns and Money Supply This chart shows the relationship between M2 money supply and China’s stock market since 2003. Image: Jeroen Blokland