Market Musings 150723 Key Charts to Watch
Market Musings 150723
Key Charts to Watch
Back to a US Goldilocks scenario?
Summary:
US inflation: soon to be disinflation?
US bond yields (long-term interest rates): peaked, now falling
US dollar loses ground to Euro, sterling
US leading economic indicator continues to improve
Euro STOXX 50 index threatens to break out: Watch Euro Banks
US Q2 earnings season starts, led by US large Banks
Average US stock continues to rise
Property: German house prices in free fall
RBOT Robotics ETF marches higher
OUR INVESTMENT THEMES - JULY 2023 UPDATE
When consistent losers become winners
Ride the Cleantech investment wave
Scarcity and Security are the new watchwords
Podcast - What is greedflation and will it go away?
Some concrete examples of greedflation (companies and industries)
Why does this exist if competition is meant to prevent companies from charging supernormal profits?
Is it a temporary or lasting phenomenon?
What companies have seen strong earnings and stock price growth as a result of this deliberate price over volume strategy?
How are consumers reacting to these price hikes?
Key Charts to Watch
1. US inflation: Continues to trend lower, below 3%
Suggests that the Federal Reserve can stop raising interest rates very soon
2. US inflation expected to trend lower in coming months
Lower rent inflation, easing food prices and lower car prices should all help
Source: Discipline Funds
3. US short- and long-term interest rates ease lower as a result
Lower rent inflation, easing food prices and lower car prices should all help
Source: tradingview.com
4. Alternative real-time measures of US inflation are even lower…
According to Jeremy Schwartz at Wisdomtree, headline CPI is actually already much lower
Source: Wisdomtree
5. Currencies: US dollar weakens, Euro and pound sterling gain
Undermined by lower US inflation, prospective nbd to US rate hike cycle
Source: tradingview.com
6. US economic activity actually improving
ECRI US leading economic indicator continues to improve. What recession?
Source: ECRI
7. Stocks: Euro STOXX 50 index back to resistance
Can the Euro STOXX 50 break out to a new high this time?
Source: tradingview.com
8. Stocks: Watch Eurozone Banks for clues
After the US regional banks/Credit Suisse shock in March, Euro Banks continue to recover
Source: tradingview.com
9. Stocks: US Q2 earnings season starts, led by Banks
US large banks benefit from higher interest rates, but set aside higher provisions for bad debts (XLF = US financials ETF)
Source: tradingview.com
10. Stocks: Equal-weight S&P 500, Nasdaq 100 indices continue to rise
Not just driven by the largest tech stocks - the US stock rally broadens out
Source: tradingview.com
11. Housing: German property prices in free-fall
Higher interest rates are biting
Source: Longview Economics
12. AI mania: RBOT Robotics ETF marches higher
iShares Robotics & Automation ETF benefits from AI interest
Source: tradingview.com
Have a great week ahead,
Edmund
Disclaimer
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2 comments
Very interesting, thank you Edmund.
Useful review. Thank you Edmund. The inverse relationship between the strength of the US dollar and the US indices seems counterintuitive, but is an excellent guide to US index futures. (In the same way that a weak GBP is good for the FTSE 100.) My guess is that the Nasdaq 100 will continue rising fast until it at least reaches its high in November 2021 (say another 1200 points) and then run out of steam when the GBP stands at around $1.45.