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Results 351–400
of 407 found.
The ECRI Weekly Leading Index
by Doug Short,
On Friday the Economic Cycle Research Institute's weekly leading index registered negative growth for the 18th consecutive week, coming in at -7.0, an improvement over last week's -7.8. While the rate of contraction has been lessening over the past five weeks, the magnitude of decline from the peak in October 2009 is unprecedented in the Institute's published data back to 1967. The published index has never dropped to the current level without the onset of a recession. Doug Short presents charts of the index, GDP and the federal funds rate going back to 1967.
The ECRI Weekly Leading Index
by Doug Short,
On Friday the Economic Cycle Research Institute's weekly leading index registered negative growth for the 17th consecutive week, coming in at -7.8, an improvement over last week's -8.7. The latest weekly number is based on data through September 24.
The magnitude of decline from the peak in October 2009 is unprecedented in the Institute's published data back to 1967. The published index has never dropped to the current level without the onset of a recession. Doug Short presents charts of the index, GDP and the federal funds rate since 1967.
Is the Stock Market Cheap?
by Doug Short,
Doug Short presents charts of the S&P 500 P/E and P/E10 ratios since 1870. The Financial Crisis of 2008 triggered an accelerated decline toward value territory, with the P/E10 ratio dropping to the upper fourth quintile of historic values in March 2009. The price rebound since the 2009 low pushed the ratio back into the first quintile, and it is now positioned just below the lower boundary around 20. By this historic measure, the market is expensive.
The Q Ratio Indicates a Significantly Overvalued Market
by Doug Short,
The Q Ratio is a popular method of estimating the fair value of the stock market, calculated by dividing the total price of the market by the replacement cost of all its companies. The current Q ratio suggests that the market remains significantly overvalued by historical standards - by about 41 percent in the arithmetic-adjusted version and 52 percent in the geometric-adjusted version. Periods of over- and under-valuation, however, can last for many years at a time. Doug Short presents charts of the Q ratio since 1900.
The ECRI Weekly Leading Index
by Doug Short,
Today the Economic Cycle Research Institute's weekly leading index registered negative growth for the 16th consecutive week, coming in at -8.7, an improvement over last week's -9.3, which is a downward revision from -9.2. The magnitude of decline from the peak in October 2009 is unprecedented in the Institute's published data back to 1967. The published index has never dropped to the current level without the onset of a recession. Doug Short presents charts of the index, GDP and the federal funds rate since 1967.
Three Market Valuation Indicators
by Doug Short,
Doug Short presents historical overlay charts of three different valuation indicators: the real S&P composite regression to trend, the real P/E 10 adjusted to its arithmetic mean, and the Q ratio adjusted to its arithmetic mean. Based on the latest S&P 500 monthly data, the index is overvalued by 41 percent, 34 percent or 28 percent, depending on which of the three metrics you choose.
The Q Ratio Indicates a Significantly Overvalued Market
by Doug Short,
The Q Ratio is the total price of the market divided by the replacement cost of all its companies. Doug Short provides mean-adjusted charts of the Q Ratio since 1900. The charts indicate that the market remains significantly overvalued by historical standards - by about 41 percent in the arithmetic-adjusted version and 52 percent in the geometric-adjusted version. Periods of over- and under-valuation, however, can last for many years at a time.
The ECRI Weekly Leading Index
by Doug Short,
On Friday the Economic Cycle Research Institute's weekly leading index registered negative growth for the 15th consecutive week, coming in at -9.2, a slight improvement over last week's -10.1. The index had been hovering around -10 for the previous five weeks. The magnitude of decline from the peak in October 2009 is unprecedented in the Institute's published data back to 1967. The published index has never dropped to the current level without the onset of a recession. Doug Short presents charts of the index, GDP and the federal funds rate since 1967.
The ECRI Weekly Leading Index
by Doug Short,
On Friday the weekly leading index of the Economic Cycle Research Institute registered negative growth for the 14th consecutive week, coming in at -10.1, a fractional improvement over last week's -10.2, which was a downward revision from -10.1. The rate of decline from the peak in October 2009 is unprecedented in the Institute's published data back to 1967. The published index has never dropped to the current level without the onset of a recession. Doug Short presents charts of the index, GDP and the federal funds rate since 1967.
The ECRI Weekly Leading Index
by Doug Short,
On Friday the weekly leading index of the Economic Cycle Research Institute registered negative growth for the 13th consecutive week, coming in at -10.1, a fractional decline from last week's -9.9. The rate of decline from the peak in October 2009 is unprecedented in the Institute's published data back to 1967. The published index has never dropped to the current level without the onset of a recession. Doug Short presents charts of the weekly leading index, GDP and the federal funds rate since 1967.
Is the Stock Market Cheap?
by Doug Short,
Doug Short provides charts of the S&P 500 since 1870, adjusted for both inflation and 10-year trailing earnings. The financial crisis of 2008 triggered an accelerated decline in the PE/10 toward value territory, with the ratio dropping to the upper fourth quintile in March 2009. The price rebound since the 2009 low pushed the ratio back into the first quintile, and it is now positioned just below the lower boundary around 20. By this historic measure, the market is expensive.
The Q Ratio and Market Valuation
by Doug Short,
The Q Ratio is the total price of the market divided by the replacement cost of all its companies. Doug Short provides mean-adjusted charts of the Q Ratio since 1900. The charts indicate that the market remains significantly overvalued by historical standards - by about 33 percent in the arithmetic-adjusted version and 44 percent in the geometric-adjusted version. Periods of over- and under-valuation, of course, can last for many years at a time.
The ECRI Weekly Leading Index
by Doug Short,
On Friday the weekly leading index of the Economic Cycle Research Institute registered negative growth for the 12th consecutive week, coming in at -9.9, a fractional improvement from last week's -10.1. The rate of decline from the peak in October 2009 is unprecedented in the Institute's published data back to 1967. The published index has never dropped to the current level without the onset of a recession. Doug Short provides charts of the weekly leading index, gross domestic product and the federal funds rate going back to 1967.
We're Underperforming the Great Depression
by Doug Short,
Doug Short presents charts of the weekly leading index of the Economic Cycle Research Institute and the federal funds rate going back to 1967. The index registered negative growth for the 11th consecutive week on Friday, coming in at -10.0, a fractional improvement from last week's -10.2. The rate of decline from the peak in October 2009 is unprecedented in the Institute's published data. The index has never dropped to the current level without the onset of a recession.
The ECRI Weekly Leading Index
by Doug Short,
Doug Short presents charts of the weekly leading index of the Economic Cycle Research Institute and the federal funds rate going back to 1967. The index registered negative growth for the eleventh consecutive week on Friday, coming in at -10.0, a fractional improvement from last week's -10.2. The rate of decline from the peak in October 2009 is unprecedented in the Institute's published data. The index has never dropped to the current level without the onset of a recession.
Treasury Yields in Perspective
by Doug Short,
Doug Short presents charts of inflation, 10-year Treasury bond yields and the federal funds rate since 1962. Last week the Fed said it will reinvest payments on mortgage assets it holds into Treasury bonds. Not surprisingly, yields fell, with the 10-Year Treasury index, for example, closing the week down 4.6 percent from its level the hour before the Fed announcement. As the charts illustrate, Treasury bond yields have occasionally led the market. How the Treasury bond market plays out over the next few months will be of critical importance to equity markets and the economy as a whole.
The ECRI Weekly Leading Index
by Doug Short,
Doug Short presents charts of the weekly leading index of the Economic Cycle Research Institute, gross domestic product and the federal funds rate. The index registered negative growth for the ninth consecutive week on Friday, coming in at -9.8, a fractional improvement from last week's -10.3. The rate of decline from the peak in October 2009 is unprecedented in the Institute's published data back to 1967. The published index has never dropped to the current level without the onset of a recession.
What if There Hadn't Been a Tech Bubble?
by Doug Short,
Doug Short presents charts of the correlation of the cyclical P/E10 ratio and inflation from 1881 to the present, including one chart that removes the effects of the tech bubble. The charts suggest that the overvaluation of today's market traces its roots much further back - perhaps to the early 1990s.
The ECRI Weekly Leading Index
by Doug Short,
Doug Short presents charts comparing the Economic Cycle Research Institute's weekly leading index, gross domestic product and the federal funds rate. On Friday the index registered negative growth for the eighth consecutive week, coming in at -10.3, a fractional improvement from last week's -10.7. A significant decline in the WLI has been a leading indicator for six of the seven recessions since the 1960s. The index has never dropped to the current level without the onset of a recession.
Valuing the S&P 500: As-Reported Earnings Estimates
by Doug Short,
Doug Short provides a monthly market valuation update based on the cyclical P/E ratio using the 10-year average of as-reported earnings, and includes a table showing the earnings for most recent quarters and the estimates for the rest of the year. Based on Wednesday's close of 1120.46, the P/E ratio based on the trailing 12-month earnings for Q2 is the difference between a P/E of 16.8 (latest earnings) versus 17.6 (July 21 earnings).
The Q Ratio and Market Valuation
by Doug Short,
Doug Short provides mean-adjusted charts of the Q Ratio since 1900. The Q Ratio is the total price of the market divided by the replacement cost of all its companies, and is a popular method of estimating the fair value of the stock market. The charts indicate that the market remains significantly overvalued by historical standards - by about 39 percent in the arithmetic-adjusted version and 51 percent in the geometric-adjusted version. Of course periods of over- and under-valuation can last for many years at a time.
The ECRI Weekly Leading Index
by Doug Short,
Doug Short presents charts of gross domestic product, the Economic Cycle Research Instititute's weekly leading index and the federal funds rate since 1965. On Friday the WLI registered negative growth for the seventh consecutive week, coming in at -10.7. The rate of decline from the peak in October 2009 is unprecedented since the metric was first devised in 1967. A significant decline in the WLI has been a leading indicator for six of the seven recessions since the 1960s.
Debt, Taxes and Politics
by Doug Short,
Doug Short provides charts of gross federal debt as a percentage of GDP, with estimates to 2015. As the charts illustrate, there is logic to the ratio increases within the historical context of two World Wars and the Great Depression. Likewise, the steadily decreasing ratio over the next 35 years enabled the tax cuts in 1964. With the 2001 and 2003 tax cuts expiring this year, will the gross federal debt be a factor in determining the direction of future tax rates? Who knows? This is, after all, a congressional election year.
The ECRI Weekly Leading Index
by Doug Short,
Doug Short provides charts comparing the Economic Cycle Research Institute's Weekly Leading Index to GDP and the federal funds rate. On Friday the index registered negative growth for the seventh consecutive week, coming in at -10.5. This number is based on data through July 16th. The rate of decline from the peak in October 2009 is unprecedented since the metric was first devised in 1967. The question, of course, is whether the latest WLI decline is a leading indicator of a recession or a false negative. The index has never dropped to the current level without the onset of a recession.
The ECRI Weekly Leading Index
by Doug Short,
Doug Short provides a chart showing the correlation between the Economic Cycle Research Institute's weekly leading index growth index, gross domestic product and recessions. The index has just registered negative growth for the sixth consecutive week, coming in at -9.8. The rate of decline from the peak in October 2009 is unprecedented since the metric was first devised in 1967.
A Short History of Stock Dividends
by Doug Short,
Doug Short provides charts of the inflation-adjusted price of the S&P composite and dividend yields, as well as real price growth and dividend growth since 1971. As the charts illustrate, risk has returned with a vengeance. Aging Boomers may finally recognize the value of dividend income, especially as their paycheck days draw nearer to a close. Perhaps dividends will someday reemerge as a mainstay of investing. The one certainty is this: It won't happen overnight.
Total Return or Total Disappointment?
by Doug Short,
Doug Short provides charts of the S&P Composite since 1929 adjusted for real price and real total return. As the charts show, for the past 21 months, the secular bear market that began in 2000 has substantially underperformed the equivalent timeframe during the Great Depression.
Annualized Total Return Roller Coaster
by Doug Short,
Doug Short provides charts of the annualized rate of return of the S&P 500 over 10-, 20- and 30-year intervals. Imagine that 10 years ago you invested $10,000 in the S&P 500. How much would it be worth today, adjusted for inflation with dividends reinvested? Brace yourself: Your investment would have shrunk to $6,956, an annualized return of -3.57 percent. That's a loss of 30.4 percent. As many households have discovered, investing in equities carries risk. Households approaching retirement should understand this risk and make rational decisions about fixed income alternatives.
The ECRI Weekly Leading Index
by Doug Short,
The Economic Cycle Research Institute's weekly leading index growth metric has had a respectable (but by no means perfect) record for forecasting recessions. Doug Short provides a chart showing the correlation between the WLI, gross domestic product and recessions. The question, of course, is whether the latest WLI decline is a leading indicator of a recession or a false negative. The index has never dropped to the current level without the onset of a recession.
Is the Stock Market Cheap?
by Doug Short,
This commentary looks at various metrics of market valuation. The TTM P/E ratio is shown to ?often lag the index to the point of being useless.? The more reliable P/E 10 (the Shiller P/E) is 20.6 and in the first quintile of historical valuations, indicating the market is expensive. The Shadow Stats inflation-adjusted P/E 10 shows the market is fairly priced, but this is an unreliable indicator.
The ECRI Weekly Leading Index
by Doug Short,
Today the Weekly Leading Index (WLI) of the Economic Cycle Research Institute (ECRI) registered negative growth for the fourth consecutive week, coming in at -7.7. The rate of decline from the peak in October 2009 is unprecedented since the metric was first devised in 1967. The ECRI Weekly Leading Indicator has never dropped to this level without the onset of a recession.
The Q Ratio and Market Valuation
by Doug Short,
The Q Ratio is a popular method of estimating the fair value of the stock market developed by Nobel Laureate James Tobin. The mean-adjusted data indicate that the market remains significantly overvalued by historical standards - by about 37 percent in the arithmetic-adjusted version and 48 percent in the geometric-adjusted version. Of course periods of over- and under-valuation can last for many years at a time.
Regression to Trend
by Doug Short,
Looking at various metrics describing today's economy, Doug Short poses the question, 'Are you bearish or bullish about the market?' Short looks at the bearish view, the bullish alternative, and various methods for calculating consumer prices. He ultimately concludes that the ideal method is 'somewhere between the revised BLS method and the historic method preserved by John Williams of Shadow Government Statistics' and comes down on the bearish side.
Market Volatility Update
by Doug Short,
The Chicago Board Options Exchange Volatility Index (VIX), which shows the market's expectation of 30-day volatility, has been rising to the 'above 30' warning level. It briefly crossed above 30 intraday but closed a shade lower at 29.74. Doug Short provides a chart series showing the VIX and S&P 500 over two timeframes.
The ECRI Weekly Leading Index
by Doug Short,
Doug Short provides charts of gross domestic product and the Economic Cycle Research Institute's weekly leading index since 1965. The WLI just registered negative growth for the third consecutive week, coming in at -6.9. The question, of course, is whether the latest WLI decline is a leading indicator of a recession or a false negative. The index has never dropped to -6.9 without the onset of a recession. The deepest decline without a near-term recession was in the Crash of 1987, when the index slipped to -6.8.
The ECRI Weekly Leading Index
by Doug Short,
Doug Short provides charts comparing gross domestic product, the Economic Research Institute's weekly leading index and the federal funds rate since 1965, with recessionary periods marked off. A significant decline in the weekly leading index has been a leading indicator for six of the seven recessions since 1965. The question, of course, is whether the latest WLI decline is a leading indicator of a recession or a false negative. Unfortunately, the federal funds rate is already at zero. Can the Fed still take steps to avoid a double-dip?
Sixteen Dow Recoveries: Update
by Doug Short,
How does the current Dow recovery compare with major recoveries in the past? The Dow closed yesterday (June 17th) 59.4% above the March 2009 low after reaching an interim closing high up 71.1% on April 26th. Compared to the other 15 rallies at the equivalent point, the current rally is in 7th place. The volatile recovery after the Crash of 1929 leads the pack by a wide margin. Second and third place date from yet earlier periods, as does the fifth place.
Consumer Metrics Institute's Growth Index
by Doug Short,
Doug Short provides charts comparing the Consumer Metrics Institute's growth index with gross domestic product and the S&P 500 since 2005. Thus far the growth index has been an effective leading indicator of GDP. As such, a double-dip recession appears to be a distinct possibility amidst the end of the various government stimulus efforts, the potential contagion of the financial stress in Europe, the ongoing environmental catastrophe in the Gulf of Mexico and another round of consumer belt-tightening.
Debt-to-GDP, Federal Tax Brackets and Politics
by Doug Short,
Doug Short provides charts of gross U.S. federal debt as a percentage of GDP since 1900, with key historical events and presidential administrations highlighted. As the charts illustrate, the recent financial crisis and steep market decline triggered a dramatic acceleration in the ratio. With the 2001 and 2003 tax cuts expiring this year, will the gross federal debt be a factor in determining the future direction of the country's tax rates? Who knows? This is, after all, a congressional election year.
Flag Day and Leading Indicators
by Doug Short,
Doug Short provides overlay charts of the S&P 500 and the Economic Cycle Research Institute's Weekly Leading Index. The Weekly Leading Index recently hit a 44-week low and descended into negative territory. This would seem to indicate dramatic slowing of the U.S. economy in the months ahead. Short also provides a chart of the 91-day 'Trailing Quarter' Daily Growth Index with an overlay of GDP. If this indicator has credibility, then a prospect of a double-dip recession, something that's happened only once since the Great Depression, cannot be easily dismissed.
The Q Ratio and Market Valuation
by Doug Short,
Doug Short provides charts comparing the Q ratio of the S&P 500 and market valuations from 1900 through Q1 2010, updated to include new flow of funds data from the Federal Reserve. The mean-adjusted charts indicate that the market remains significantly overvalued by historical standards - by about 37 percent in the arithmetic-adjusted version and 48 percent in the geometric-adjusted version. Periods of over- and under-valuation, of course, can last for many years at a time.
The Market and Recessions
by Doug Short,
A new article in The Atlantic asks the question "Are We Slipping Back into a Recession?" The article cites five reasons why the recovery is in trouble and five reasons why it's on track (with one reason used on both sides of the debate). For a long-term historical context on recessions in the U.S., Doug Short republishes an article originally posted on July 9, 2009, shortly after the end of the latest recession (according to the unofficial consensus). The article includes inflation-adjusted and nominal charts of U.S. stock market prices since 1871, with recessionary periods highlighted.
The Shape of Market Bubbles
by Doug Short,
Doug Short provides an overlay chart of four major bubbles across market history to see the variety of shapes a bubble can take. The overlay includes the 2007 Shanghai Composite bubble, the 2000 Nasdaq technology bubble, the 1929 Dow bubble and the 1989 Nikkei bubble. As the chart illustrates, bubbles usually go unrecognized by the majority of market participants until their late stages. The left side of the bubble is usually more gradual than the collapse, although the incredible rise of the Shanghai market is a notable exception.
Three Market Valuation Indicators
by Doug Short,
Doug Short provides two charts of the Q Ratio and P/E10 ratio of the S&P 500 Composite Index in order to facilitate comparisons: one adjusted to the arithmetic mean of the two ratios, and the other to their geometric mean. Based on the monthly averages of daily closes in the S&P 500 for the month of May (1125.06), the index is overvalued by 26 percent, 33 percent or 39 percent, depending on which of the three metrics you choose.
Variations on the Q Ratio
by Doug Short,
The Q ratio, developed by Nobel Laureate James Tobin, is a popular method for estimating the fair value of the stock market. It consists of the total price of the market divided by the replacement cost of all its companies. Doug Short provides charts of the Q ratio since 1900. The mean-adjusted charts indicate that the market remains significantly overvalued by historical standards - by about 39 percent in the arithmetic-adjusted version and 50 percent in the geometric-adjusted version. Periods of over- and under-valuation, however, can last for many years at a time.
Secular Bull and Bear Markets
by Doug Short,
Doug Short examines an inflation-adjusted chart of the S&P Composite. An obvious feature of the chart is a pattern of long-term alternations between upward and downward trends, or secular bull and bear markets. Secular bull years total 80 versus 52 for the bears, a 60:40 ratio. The latest monthly average of daily closes is 33 percent above trend after having fallen only 6 percent below trend in March of last year. Previous bottoms were considerably further below trend. Will the March 2009 bottom be different?
World Markets: Revised Update
by Doug Short,
Doug Short provides provides a an overlay chart of world markets since March 9, 2009. The chart, he writes, illustrates the synchronous behavior of international stock indices. The question going forward is whether the correction to date is a long-term low or an interim low with more downside to come. Short also provides a chart of the Shanghai Composite Index since 2000, which includes a classic market bubble.
Market Musings: Manic-Depressive Mondays
by Doug Short,
On Friday CNBC ran a piece observing that Mondays have strongly outperformed the other days of the week in 2010. Doug Short provides two pairs of tables that allow us to compare the behavior of weekdays during two nasty bear markets and the rallies that followed. Monday has indeed behaved strangely over the past decade. The key factor is whether we're in a bull or a bear market. Now that CNBC has publicized the 'buy on Friday, sell on Monday concept,' however, Short wouldn't put much 'stock' in this strategy going forward.
Results 351–400
of 407 found.
