Copper made headlines last week as it plowed through multiple support areas to levels not seen since mid-2010. That move gave market watchers, including ourselves, pause since copper prices are an important leading economic indicator.
Read MoreThe economic outlook in Germany weakened for the third month in a row, according to the latest ZEW survey: Anticipation of stock market gains has fallen steadily since last September: The expectation for improvement in profits (red line) fell in a number of industries in March: Autos Banks Information Technology Services Telecommunications On the bright
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Every week we decompose the performance of every sector, region and country trying to understand the forces working beneath the surface. The two factors with the highest correlation to MSCI Asia-Pacific last week were dividend yield and the correlation to the Yen.
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Performance was negative across all but two of the twenty four countries comprising the MSCI World Index, but Japan stood out as being particularly weak as it finished down 4% on the week. Below we show the performance by country for all twenty four countries.
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The NAHB Housing Market Index was only able to marginally bounce in March after the record one month free fall in February. The headline number came in at 47 vs expectations of 50. The West region was particularly weak. It dropped another 5 points to 29 which is the lowest level since August 2012.
Read MoreMeasures of market breadth can give us important clues as to what is happening underneath the surface of major stock indices so we can make better decisions.
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Yesterday was only the eighth day the S&P 500 closed down by more than 1% in the last six months, or 126 trading days. To put this in some historic context, at deep oversold lows, the number of trailing days down over 1% is in excess of forty.
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Chinese economic data continues to come in on the weak side as today brought disappointing retail sales and industrial production figures. These data represent January and February cumulative totals so they should not be affected significantly by the timing of the Chinese New Year holiday.
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Over the last year, dividend yield ranks as one of most important factors in MSCI World stock performance: Which begs the question: where are the most positive dividend yield trends?
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Prior to 1997, the dominant fear in the capital markets was inflation, and this resulted in a structurally negative correlation between stocks and bonds. After the Asian crisis, the dominant fear shifted to deflation, and the structural correlation between stocks and bonds flipped positive.
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At the peak of the of shadow banking system in 2007 total asset-backed commercial paper (ABCP) outstanding was over $1.2 trillion (or 8.3% of GDP). Today, ABCP outstanding is about $233 billion (or 1.4% of GDP) and still declining.
Read MoreThe Chinese trade data from last weekend has gotten a fair amount of play in the media over the last few days. On one hand we have imports surging 10% YoY and on the other we have exports plunging by 18% YoY.
Read MoreWith an impressive jump in coffee futures and a breakdown in copper, commodities have received a fair amount of attention so far this week.
Read MoreAll year the Citigroup Economic Surprise indicator has been slipping, reflecting the weak economic readings lately. Over time, we have found this indicator to be helpful in identifying more risky periods for equities. In general, as the index slips below zero, the distribution of forward 3-month returns skews negative.
Read MoreA simple way of looking at longer-term momentum is to look at the percent of stocks trading above their 200-day moving average. When this figure reaches 20% we say that the index or sector is at oversold levels. This tends to mark more advantageous buying opportunities.
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