Uncategorized

What is Dr. Copper Telling Us? October 16, 2013

Posted by Knowledge Leaders Team in Uncategorized

We track the relative performance of the cyclical sectors (consumer discretionary, financial, energy, industrial, materials, technology) compared to the counter-cyclical sectors (consumer staples, health care, telecom, utilities) to gain an insight into leadership within the equity markets. Usually copper–the metal with a Ph.D in Economics–moves in synch with the relative outperformance of the cyclicals.

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DAX Closes at All-Time Highs October 16, 2013

Posted by Knowledge Leaders Team in Uncategorized

Germany’s DAX index closed at all-time highs on Tuesday:And, while the rest of the European equity indices have performed well so far this year, few are close to achieving the same milestone:

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US Econ Chart of the Day October 16, 2013

Posted by Knowledge Leaders Team in Uncategorized

The NAHB Housing Market Index ticket down from 57 to 55 in October. However, the index has shown a surprisingly strong negative correlation with the Unemployment Rate (Index goes up, Unemployment rate goes down). This relationship would suggest that the unemployment rate continues to fall over the next 18 months.

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ZEW Survey October 15, 2013

Posted by Knowledge Leaders Team in Uncategorized

In keeping with the familiar trend among European data releases, Germany appears to be the lone bright spot in an otherwise lackluster survey of economic sentiment:

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We’ve noted before the recent underperformance of ”defensive growth” stocks (Health Care and Consumer Staples stocks) so we thought we’d dive into the details to get a better understanding for the drivers of this relatively sudden turn in performance, since these two sectors (and Health Care in particular) have performed admirably this cycle.

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Teradata Breaks Down October 15, 2013

Posted by Knowledge Leaders Team in Uncategorized

One of the tech high flyers the last few years has been Teradata, who sells software to cloud data centers. Today the target price was cut from $75 to $45 and the stocks is down almost 17%, making it the worst performer in the tech sector.

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Gold Stocks Underperforming October 15, 2013

Posted by Knowledge Leaders Team in Uncategorized

Over the last month, gold companies have been among the weakest performeres in the MSCI World Index. On average they are down 9.4% over the last 30 days. They also top our ranking for the biggest drop in 30 day relative strength.

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Chinese Corporate Balance Sheets Continue to Deteriorate October 15, 2013

Posted by Knowledge Leaders Team in Uncategorized

There has been much discussion in recent years of the leverage buildup in the Chinese corporate sector and the problems (or not) that this will (or won’t) create, so we thought we’d chime in with some quantitative data and let the reader make his or her own conclusions.

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European Industrial Production October 14, 2013

Posted by Knowledge Leaders Team in Uncategorized

In spite of a better than expected monthly rise in production (in August), industrial activity in the five largest European countries continues to contract on a yearly basis– with the exception of Germany:And the recent tick down in the PMI Manufacturing survey would not suggest much of a reason to hope for material improvement in

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US Private Bank Credit Contracting October 14, 2013

Posted by Knowledge Leaders Team in Uncategorized

New monetary policies like QE have muddied the water somewhat when looking at monetary aggregates like M2.  We have a simple adjustment we make to M2 to improve the optics on bank credit.

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The FRB is the Mortgage Market October 14, 2013

Posted by Knowledge Leaders Team in Uncategorized

Over the last year, between the FRB and commercial banks, around $500 billion in net new real estate credit has been extended.  That is the good news.  The concerning part is that the FRB has accounted for over 100% of all real estate credit created.

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Currency Checklist Suggests Stronger USD October 11, 2013

Posted by Knowledge Leaders Team in Uncategorized

The US Dollar (USD) has turned against the Euro…check. It has turned against the GBP…check. It has turned against the Yen…check. It has turned against the Swiss franc…check. And, lastly it has turned against gold…check.

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