U.S. Business Cycle: Output Gap vs. Core PCE Inflation The mature phase of the U.S. business cycle began 24 months ago. The mature phase lasted 72 months in the late 1960s and 57 months in the late 1990s. Image: NBF Economics and Strategy
U.S. Business Cycle: Actual vs. Potential U.S. Real GDP The mature phase of the U.S. business cycle began 2 years ago. If inflation remains stable and the Fed avoids restrictive monetary policy, then the risk of recession is reduced. Image: NBF Economics and Strategy
Valuation – Value vs. Momentum Stocks Chart suggesting that value stocks are currently very cheap vs. momentum stocks. The relative forward P/E of value vs. momentum is at two standard deviations below the average. Image: BofA Merrill Lynch US Equity & Quant Strategy
U.S. ISM Manufacturing Index and Historical Mean The historical mean of the ISM Manufacturing Index stands at 52.9. Image: Saxo Bank Research & Strategy
Global Equity – Global Bond Fund Flows In the past two weeks, investors have shifted from bonds to equities. Image: BofA Merrill Lynch Global Investment Strategy
Who Is Buying U.S. Equities? The only buyer of US equities remains corporates, not households and institutions. Image: BofA Merrill Lynch Global Investment Strategy
ISM Manufacturing Index vs. ISM Manufacturing New Orders Index This chart suggests that the ISM Manufacturing Index should turn higher. Image: Macrobond, SEB Strategy Research
China’s Belt and Road Initiative The Belt and Road Initiative is a global development strategy adopted by the Chinese government. This chart shows the infrastructure projects. Image: Reuters
Sell in May and Go Away Is a Myth The S&P 500 Total Return from 1928 to 2018 shows that “Sell in May and Go Away” was not a winning strategy. Image: Charlie Bilello
Ken Fisher: ‘Third year of a president’s term is positive’ “…because political risk aversion falls as you get to increase gridlock which happends in every midterm election.” Billionaire Ken Fisher thinks there is room to run for the stock market this year. But don’t try to time the market and keep your investment strategy simple.