The Boom-Bust Barometer (made famous by Dr. Ed Yardeni) is a simple, but effective, way of avoiding large drawdowns in the stock market. This indicator is calculated by taking the CRB Raw Industrial Price Index divided by initial unemployment claims.
Out of 24 developed market industry group, six currently look overbought in the short-term. Two come from the financial sector, two come from the technology sector, one from consumer staples sector (surprisingly) and one from the materials sector.
After underperforming in 2016, growth stocks have once again started to outperform value stocks in 2017. As the chart below illustrates, the S&P 500 Value Index consistently outperformed the S&P 500 Growth Index from 2002-2006.
A Bloomberg article (February 2nd) highlighted a recent survey of 400 executives whose overwhelming concern is talent scarcity.
The percentage of positive revisions to developed market sales and earnings estimates jumped over the last month, with an average of 76% of companies reporting better sales estimates and 70% reporting better earnings estimates.
The stronger dollar is flowing through into our purchasing power parity (PPP) CPI differential models. Overall against 18 currencies, the USD is overvalued against 12 of them on a PPP basis.
Over the past 10-years personal income in the US has increased at a 3.39% annualized rate which is the slowest 10-year annualized growth rate since the data began in 1960.
At long last the fund rating company, Morningstar, has decided to put mutual funds and exchange traded funds (ETFs) on a level playing field when it comes to fund ratings and comparisons.
The Conference Board’s Coincident-Lagging Ratio has done a pretty good job of identifying recessions since 1958. That is, until now. In each of the last eight recessions, the Coincident-Lagging Ratio bottomed near the end of the recession and was declining throughout the recession.
Over the past decade, global cyclical stocks and the dollar have tended to move in inverse directions. Whenever the dollar weakens, like in the first half of 2009 and the second half of 2010, cyclical stocks have tended to outperform the broader market.