S&P 500 Index – Earnings & Valuation The S&P 500 valuation is high relative to history and the earnings growth estimate has fallen to +3.7% for 2019. You may also like our “Stock Market Valuation.” Image: Fidelity Investments
U.S. Yield Curve vs. Recessions The chart shows the 10-year Treasury yield minus Fed funds rate yield curve and recessions. Historically, a flat or inverted yield curve is associated with slow economic growth or recessions. The longer the yield curve stays inverted, the better it predicts recession. A Fed rate cut similar to 1995 could…
ANZ Global Lead Index The ANZ Global Lead Index is a leading indicator on global industrial production. The chart shows that growth momentum peaked in 2018. Currently, global growth is actually starting to moderate seriously. Image: ANZ Research
Industrial Search Trends Looking Optimistic This chart shows the rise in search interest in the U.S.. That’s good news after a fall in 2018, because industrial search trends tend to lead realized growth by a decent margin. Image: Arbor Research & Trading LLC
U.S. Fiscal Stimulus as a Percent of GDP The chart shows the impact of the Trump fiscal stimulus on U.S. economic growth until 2021. You may also like “Despite Full Employment, Why Real GDP Should Stay Above Potential GDP?“ Image: ClearBridge Investments
U.S. Total Nonfarm Payrolls and Recessions Total nonfarm payrolls increased 224K in June, well above expectations, which should calm fears of a near-term recession. The job market is still strong, even if there are signs it is slowing down. Actually, nonfarm payroll growth tends to decline before a recession. You may also like “What Is…
U.S. 10-Year Treasury Bond Yield vs. U.S. Nominal GDP The U.S. 10-year Treasury bond yield is highly correlated with the U.S. nominal GDP growth (correlation = 77%). Image: KKR Global Macro
NFIB Small Business Optimism Index The Small Business Optimism Index is driving economic growth. It is a good indicator of the health of small businesses in the U.S.. Image: Ned Davis Research
History of the Real Federal Minimum Wage Today, the real federal minimum wage is worth 31% less than in 1968. It is also the longest period without an increase (adjusted for inflation). You may also like “Wage Growth vs. U.S. Home Price Growth.” Image: Economic Policy Institute
Demographics Explain Sovereign 30-Year Yields Accross Emerging Markets Another great chart showing that emerging market demographics explain 30-year sovereign bond yields. An R² of 0.80 is quite high and significant. You may also like “U.S. Population Growth vs. U.S. 10-Year Treasury Bond Yield.” Image: Arbor Research & Trading LLC