Trade War and Financial Conditions Index The trade war has tightened the Goldman Sachs FCI by about 60bp cumulatively. The Goldman Sachs Financial Conditions Index (FCI) is a weighted sum of a long-term corporate yield,…
S&P 500 and U.S. GDP Long-Term Growth Rates Interesting chart showing the long-term growth rates of the S&P 500 and U.S. nominal GDP since 1920. Image: Lohman Econometrics
U.S. Companies Depend Heavily on the China Market US companies make nearly $500 billion revenue in China, while Chinese companies make about $40 billion in U.S.. Image: Financial Times
Citi Economic Surprise Index and S&P 500 The Citi Economic Surprise Index has risen sharply, but it has an inconsistent history in terms of its correlation with the S&P 500. It is a cyclical indicator:…
Copper to Gold Ratio and Conference Board Leading Economic Index (LEI) When the copper-to-gold ratio decreases, it is an early warning signal for the economy, meaning that growth optimism is fading. Image: Wells Fargo Investment…
Fed Dovish Pivot – Stimulus Hopes Support Risk Appetite Growth sentiment appears to be stabilizing, due to optimism about fiscal policy. Image: Goldman Sachs Global Investment Research
Earnings, Margins and Valuation Considering earnings growth, operating margin and valuation, the S&P 500 should remain under pressure until Q3 earnings season. Image: Fidelity Investments
Effect of the Trade War on U.S. Real GDP Growth Assuming no further escalation, the trade war drag on U.S. growth is expected to peak at about -0.4% in the second half of 2019. Image:…
U.S. Yield Curve 1M to 30Y and Correlation Against Fed Funds Effective Rate According to the chart, a 75bp cut is required to normalize the term structure of interest rates. Image: Fundstrat Global Advisors, LLC
Demographics – Forecasting U.S. GDP This chart suggests that aging population is weighing down growth. Image: Arbor Research & Trading LLC
Equity Valuations This chart shows that equity valuations are not very cheap, but not stretched either. Image: Pictet Wealth Management