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Fireside Charts: Volatility "Microbursts" on the Rise, Key Risk Indicator Hits 2019 High, and Household Assets Set Record

December 11, 2019

The U.S. political landscape isn't the only thing that grew more rocky in 2019; S&P 500 volatility and drawdown frequency have increased significantly in the last decade, with days spent with a 3%+ drawdown up almost fivefold over the early 2010's. Could this be part of the "mini-cycle" phenomenon we wrote about last month? And analysts may be seeing even more volatility approaching, as the CBOE SKEW Index—a measure of the perceived probability of outlier equity returns—has surged ...

Fireside Charts: Private Payrolls Shock to the Upside, Unemployment Dips Back to Annual Low, and Strategists Measured on 2020

December 9, 2019

Happy Monday, Fireside Charts readers! We mentioned the "rosy" outlook of Friday's jobs report last week, but let's take a minute today to stop and smell those roses. Private payrolls came in at more than double the expected figure and unemployment's revisiting its 2019 low—the third lowest since the 1940's—and wage growth has topped the mortgage rate for the first time in nearly 50 years. Not too shabby! It isn't all ...

Fireside Charts: Jobs Reports, Service Sector Slowdown, and Are We in a Large-Cap Super-Cycle?

December 6, 2019

The Labor Department's jobs report was released this morning and it certainly paints a rosier picture than ADP's grim analysis from earlier this week (re: only 67,000 private sector jobs added in November—less than half of what was expected). With the Fed's recent adoption of the Sahm rule, we know how indicative employment numbers can be of oncoming recessions, but analysis can get tricky when ...

Fireside Charts: Manufacturing PMI Still Contracting, Corn Shipments Halved, and Non-OPEC Oil Supply Outpaces Demand

December 4, 2019

Did you spend big this holiday weekend? While consumer sentiment and spending are still strong—Adobe Analytics estimates that sales topped $29 billion between Thanksgiving and Cyber Monday—strong consumer demand does not look to be trickling through to the manufacturing sector. Domestic and international markets continue in contraction and—despite a small recovery in Germanya manufacturing recession has taken hold in all European nations except ...

Fireside Charts: Financial Sector Breakout, Record Setting Trade Deficits, Underwhelming Regional Fed Reports

December 2, 2019

We're back! We hope you all made it home safely from holiday travels and are not stuck in an airport or shoveling snow like a many of our colleagues. There's a lot to turn our attention to this week including today's testimony from the newly appointed ECB President, Christine Lagarde, in which she promised an "overarching review of ECB business ranging from how it defines its inflation objective to whether it includes a fight against climate change among its responsibilities." We'll see how her actions effect Europe's economy but most European stock ...

Fireside Charts: Trends in Stock Listings, Regional Fed Reports, and a Look at U.S. Energy Production

November 27, 2019

Happy Thanksgiving Eve! We know you're anxious to get to your vacations, so we'll keep it to bullet points today:

  • Despite numerous headlines on IPOs this year, the number of U.S. listed stocks has nearly halved in the past ~25 years. Is increasing variety of investment vehicles to thank?
  • The Chicago Fed's National Activity Index (a weighted average of 85 existing monthly indicators of national economic activity) dipped further into negative territory this month, as did the Dallas Fed ...

Fireside Charts: Interest Rates, Credit Spread, and Millennium Nostalgia

November 25, 2019

Happy Thanksgiving week, Fireside Charts readers! The 10-year treasury yield hit a three-year low in early September (and has been lingering below 2% ever since) but a look back through 2012 has us wondering if it could be poised to rise. Meanwhile, the high-yield bond spread has already established some upward momentum as investors begin to demand more reward for taking on risk—can you guess how much the spread has jumped since the lows of 2017? And whose government-bond shopping spree could put black Friday to shame? Turning to sectors, while Energy ...

Fireside Charts: Mini-Cycles, Manufacturing, and Mounting Debt

November 22, 2019

The U.S. Leading Economic Index dropped for the third straight month in October, driven largely by investor uncertainty around the trade war, but a long-term view makes us wonder: are occasional hits to economic sentiment—and the "mini-cycles" they spur—a key to understanding how the current expansion has become the longest on record? Stay tuned as we keep our eyes trained to see if we're on the edge of another rebound or already in the midst of a more sustained downturn. In the meantime, we're seeing some mixed signals from the Philly Fed on manufacturing, ...

Fireside Charts: 'De-Worsifying' Equities, U.S. Dividends Fail to Measure Up, and Are Junk Bond ETFs Turning to Junk?

November 20, 2019

Diversification has long been touted as a cornerstone of successful long-term investing, but do you know just how in-sync U.S. and international equities have become in the past 20 years? Here's a hint: if it was a letter grade, we wouldn't "B" dissatisfied. We are a little dissatisfied with how U.S. dividends stack up against those in international and emerging markets though. And are junk bond ETFs the next "big short?" Some investors seem to think so, but such heavy shorting has us wondering about the quality of the funds' holdings... and ...

Fireside Charts: Empire State Manufacturing Disappoints, Easing Hits Decade High, and a Look at Government Spending

November 18, 2019

The Empire State Manufacturing index turned in a sluggish 2.9 print on Friday, falling short of expectations and marking six straight months of soft numbers from the oft-prognostic index. With so many regions (both domestic and global) slowing though, it's worth noting that any reading above 0.0 indicates ongoing growth. Central bankers are almost certainly keeping their eyes on the trend and aiming to act quickly; the highest share of central banks in a decade are now engaged in easing and the Fed's balance sheet has skyrocketed in just two months. ...