Archive | June, 2016

US Railroad Carloads Below 2009/2010 Lows

1 - Copy - Copy

Total railroad traffic carloads have fallen off a cliff this year. This is volatile weekly series so looking at the one-year moving average is useful. From 1988-2008 the one-year moving average vacillated between 320,000 carloads to 350,000 carloads. The one-year moving average dropped to 265,000 in early 2010 but rebounded to around 290,000 from 2011-2015. It […]

5 & 10-Year Inflation Expectations are at Parity

1 - Copy - Copy (2) - Copy

US inflation expectations have declined significantly over the past six weeks. 30-year breakeven inflation is now just 1.59% after hitting a high of 1.86% on 4/29/16. 10-year breakeven inflation has moved from 1.71% to 1.47% and 5-year breakeven inflation has gone from 1.61% to 1.47%. In addition to the overall lowering of inflation expectations, 5-year […]

Investing in Europe? Might Want to Include Some Knowledge Leaders. Just Sayin’.

036065c7e7ae4213aa0f9259a5da6027

Year-to-date (on an equal-weighted basis), the average stock in our DM EMEA universe is down more than 3%–led by the usual suspects (Italy, Portugal, Spain, and Ireland), of course. [For reference, DM Asia and DM Americas stocks are up for the year so far–2.85% and 7.62%, respectively.] Peripherals’ underperformance is followed closely by none other than […]

Consumer Staples Breaking Out to New Highs

1 - Copy - Copy (2) - Copy

While overall developed market stocks remain approximately 7% below May 2015 highs, the consumer staples sector continues to power forward to new highs. The GKCI Developed Markets Consumer Staples Index is now 6% higher than it was in May 2015. The Developed Markets Asia Consumer Staples Index is particularly strong as it is now over 10% higher […]

World CPI Growing at just 1%

1 - Copy - Copy - Copy

Our simple World CPI Proxy, which takes the average of 33 country CPI YoY growth rates, fell to just 1.01% in April. It is the lowest level since 2009. However, more importantly, global consumer prices have been below 1.31% YoY since the beginning of 2015 and below 2% YoY since the beginning of 2014. This is a […]

Historically High Equity/Oil Correlation Has Moderated

1 - Copy - Copy - Copy

The historically high correlation between equity prices and oil prices that existed early this year has moderated somewhat. The 200-day correlation between Brent Crude Oil and the MSCI World Index remains elevated at 46%. However, we would expect to see this drop over the coming months as the 65-day correlation has fallen quite a bit […]