Author Archive for Chart of the day

Chart of the Day – Market Performance in Mid-Term Election Years

By Chart of the Day

Today’s chart illustrates how the stock market has performed during the average mid-term election year. Since 1950, the first nine months of the average mid-term election year have tended to be subpar (see thick blue line). That subpar performance was then followed by a significant year-end rally. One theory to support this behavior is that investors abhor uncertainty. To that end, investors tend to pull back prior to an election when the outcome is unknown. Beginning in early October, however, the outcome of the election becomes increasingly apparent and investors respond by positioning their portfolios accordingly.

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Chart of the day: Earnings in Perspective

Via Chart of the Day:

For some perspective on the all-important earnings environment, today’s chart illustrates ‘as reported’ S&P 500 earnings growth (i.e. 12-month rate of change) since 1940.

There are a couple of points of interest. For one, earnings growth has tended to peak in the 20 to 40% range and trough somewhere in the -10 to -20% range. At least that was the case up until this millennium. Since the dot-com crash (i.e. the 2001 – 2002 timeframe), earnings growth volatility has increased dramatically.

In fact, the post-financial crisis spike to 793% is not even shown on today’s chart so as to allow the rest of the data to remain visible (i.e. not flattened out). It is worth noting that this historic post-financial crisis earnings growth spike is due in large part to the fact that earnings came in so low as a result of the financial crisis. Currently, earnings growth has just moved into positive territory but remains well below average.

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Notes:
Where’s the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron’s recommended charts of Chart of the Day Plus.

Chart of the Day: Surging Home Prices

Via Chart of the Day:

The US real estate market continues to surge. For some perspective, today’s top chart illustrates the US median price (adjusted for inflation) of a single-family home over the past 43 years while today’s bottom chart presents the annual percent change in home prices (also adjusted for inflation).

Today’s chart illustrates that the inflation-adjusted median home price has rarely increased more than 7.5% in one year (gray shading). When inflation-adjusted home prices did increase more than 7.5% in one year, it was often soon followed by a period of stagnant or declining prices. The exception to this occurred during the credit bubble (2001 and 2002). It is worth noting that over the past 12 months, the median price for a single-family home has shot up at the fastest pace on record.

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Notes:
Does the real estate rally continue? The answer may surprise you. Find out now with the exclusive & highly regarded charts of Chart of the Day Plus.

Chart of the Day: Post-Massive Bear Market Rallies

By Chart of the Day

Today’s chart illustrates rallies that followed massive bear markets. For today’s chart, a ‘massive’ bear market is defined as a decline of greater than 50%. Since the Dow’s inception in 1896, there have been only three bear markets whereby the Dow declined more than 50% (early 1930s, late 1930s until early 1940s, and during the recent financial crisis).

Today’s chart also adds the rally that followed the dot-com bust during which the Nasdaq declined 78%. The current Dow rally has followed the post dot-com bust rally of the Nasdaq that began back in 2002 fairly closely and held to a general post-massive bear market rally pattern — rally during the first 300 trading days, trade in a relatively flat choppy manner up until around 600 trading days and then re-embark on the second leg of the rally. History may not repeat, but it rhymes.

Notes:
Where’s the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron’s recommended charts of Chart of the Day Plus.

Chart of the Day: Weak Post-Election Year Stock Performance

By Chart of the Day

Today’s chart illustrates how the stock market has performed during the average post-election year. Since 1900, the stock market has tended to underperform from early January to late February and again from early August to early November during the average post-election year.
Some parts of the year have, on average, outperformed. The most notable period of outperformance has occurred from late March to late May. In the end, however, the stock market has tended to underperform during the entirety of the post-election year.

One theory to support this behavior is that the party in power will tend to make the more difficult economic decisions in the early years of a presidential cycle and then do everything within its power to stimulate the economy during the latter years in order to increase the odds of re-election.

 

Notes:
Where’s the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron’s recommended charts of Chart of the Day Plus.

The Jobs Disaster – the Long View

By Chart of the Day

Today, the Labor Department reported that nonfarm payrolls (jobs) increased by 80,000 in June. Today’s chart provides some perspective in regards to the US job market. Note how the number of jobs steadily increased from 1961 to 2001 (top chart). During the last economic recovery (i.e. the end of 2001 to the end of 2007), job growth was unable to get back up to its long-term trend (first time since 1961).

More recently, the number of nonfarm payrolls has been working its way higher but at a pace that is not fast enough to close the gap on its 1961 to 2001 trend. It is interesting to note that the current number of US jobs recently surpassed its 2001 peak. However, if this month’s pace of 80,000 new jobs were to continue for each and every month going forward, the 2008 peak would not be reached until the third quarter of 2017.

 


Notes:
Where’s the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron’s recommended charts of Chart of the Day Plus.

OIL – THE LONG VIEW….

By Chart of the Day

Today’s chart provides some long-term perspective on the price of a barrel of crude oil with a long-term chart of inflation-adjusted West Texas Intermediate Crude. Today’s chart illustrates that most oil price spikes coincided with Middle East crises and often preceded or coincided with a US recession.
The logic behind this is that a Middle East crisis can potentially disrupt an already tight oil supply and thereby drive crude oil prices higher. Also, rising oil / energy prices can, among other things, increase costs within the global economy’s supply / distribution chain and thereby contribute to inflation which can in turn encourage governments to halt or reduce any plans to stimulate the economy. As a result of a slowing global economy as well as increased global oil production, crude oil prices have declined over 20% since early May alone.

Notes:

Where’s the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron’s recommended charts of Chart of the Day Plus.

 

POST-MASSIVE BEAR MARKET RALLIES

By Chart of the Day

Today’s chart illustrates rallies that followed massive bear markets. For today’s chart, a ‘massive’ bear market is defined as a decline of greater than 50%. Since the Dow’s inception in 1896, there have been only three bear markets whereby the Dow declined more than 50% (early 1930s, late 1930s until early 1940s, and during the recent financial crisis). Today’s chart also adds the rally that followed the dot-com bust during which the Nasdaq declined 78%.

The current Dow rally has followed a somewhat middle of the road path and has followed the post dot-com bust rally of the Nasdaq that began back in 2002 fairly closely — especially over the past year. If the current rally were to continue to follow the post-massive bear market rally pattern, the market would have to work its way higher during much of the remainder of 2012.

 

Notes:
Where’s the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron’s recommended charts of Chart of the Day Plus.

POST FINANCIAL CRISIS RETRACEMENTS

By Chart of the Day

For some perspective on the post-financial crisis rally, today’s chart illustrates how much of the downturn that occurred as a result of the financial crisis has been retraced by each of the five major stock market indexes. For example, the Dow peaked at 14,164.53 back in October 9, 2007 and troughed at 6,547.05 back on March 9, 2009.
The most recent close for the Dow is 12,980.30 — it has retraced 84.5% of its financial crisis bear market decline. As today’s chart illustrates, each of these five major stock market indices have retraced over 78% of their financial crisis decline. However, it is the S&P 400 (mid-cap stocks) and the tech-laden Nasdaq that have recouped all the losses incurred during the financial crisis and currently trade higher than their 2007 credit bubble peak.

Notes:

Where’s the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron’s recommended charts of Chart of the Day Plus.

 

THE SURGING PRICE OF GASOLINE….

By Chart of the Day

As a result of ongoing geopolitical tensions (e.g. Iran) as well a spotty but generally improving global economy, the price of crude oil continues to trend higher. Since the end of September, the cost of one barrel of crude oil has increased by over $30. With oil prices trending higher, it is not all that surprising to find that gasoline prices are following suit. The average US price for a gallon of unleaded is up $1.87 per gallon since the financial crisis low.
Over the past two months, gasoline prices have resumed their upward trend with an increase of $0.35 per gallon. There a couple points of interest from today’s chart. For one, Middle East crises are often associated with major swings in the price of gasoline. Also, gasoline price spikes have often occurred prior to an economic downturn. In the end, gasoline prices have rarely been higher than current levels and considering the fragility of the current global economy, gasoline/oil prices are something to watch going forward.

Notes:

Where’s the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron’s recommended charts of Chart of the Day Plus.

 

CHART OF THE DAY – THE LABOR GAP

By Chart of the Day

Yesterday, the Labor Department reported that nonfarm payrolls (jobs) increased by a significant 243,000 in January. Today’s chart provides some perspective on the US job market. Note how the number of jobs steadily increased from 1961 to 2001 (top chart).
During the last economic recovery (i.e. the end of 2001 to the end of 2007), job growth was unable to get back up to its long-term trend (first time since 1961). More recently, the number of nonfarm payrolls has been working its way higher but at a pace that is not fast enough to close the gap on its 1961 to 2001 trend. In fact, the current number of US jobs is still below its 2001 peak.

Notes:

Where’s the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron’s recommended charts of Chart of the Day Plus.

CHART OF THE DAY: GOLD – THE LONG VIEW

By Chart Of The Day

With gold more than $250 off its August 2011 peak, today’s chart provides some long-term perspective in regards to the gold market. Today’s chart provides an illustration of the bull market in gold that began back in 2001. As today’s chart illustrates, the pace of the nearly 11-year bull market has increased over time.
However, over the past four and a half months the price of an ounce of the shiny metal has declined more than at any point since 2008. This latest pullback has brought gold down to support (green line) of its three-year accelerated trend channel. So while the upward trend in gold is still intact, the accelerated trend is currently being tested.

 

Notes:

Does the gold rally continue? The answer may surprise you. Find out now with the exclusive & highly regarded charts of Chart of the Day Plus.

CHART OF THE DAY – MORE ON SEASONALITY

By Chart of the Day

With the current calendar year coming to a close, today’s chart provides some perspective on 2011’s stock market performance. Today’s chart illustrates each calendar year performance (dark blue columns) of the Dow since 1950. These calendar year performances have varied from a maximum of 44% back in 1954 to a minimum of -33.8% in 2008 with the overall average since 1950 (gray horizontal line) coming in at 8.1%. So how does the Dow’s performance in 2011 compare?
With one more trading day left to go, the Dow’s performance for 2011 (gray column) is slightly below the 1950 to present average. However, it is worth noting that this year’s performance does compare favorably to the 2000 to present calendar year average which comes in at a meager 1.9%.

Notes:

Where’s the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron’s recommended charts of Chart of the Day Plus.

POST-MASSIVE BEAR MARKET RALLIES

By Chart of the Day

Today’s chart illustrates rallies that followed massive bear markets. For today’s chart, a ‘massive’ bear market is defined as a decline of greater than 50%. Since the Dow’s inception in 1896, there have been only three bear markets whereby the Dow declined more than 50% (early 1930s, late 1930s until early 1940s, and during the very recent financial crisis).
Today’s chart also adds the rally that followed the dot-com bust during which the Nasdaq declined 78%. The current Dow rally has followed a somewhat middle of the road path and has most closely followed the post dot-com bust rally of the Nasdaq that began back in 2002. If the current rally were to continue to follow the post-massive bear market rally pattern, the market would have to work its way higher during much of 2012.

 

Notes:
Where’s the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron’s recommended charts of Chart of the Day Plus.

PUTTING THE BOND BULL MARKET IN PERSPECTIVE

By Chart of the Day

For some perspective on all-important long-term interest rates, today’s chart illustrates the 112-year trend of the 10-year Treasury bond yield (thick blue line). As concerns over government debt as well as a struggling global economy have increased and fears over inflation diminished, investors have moved towards safety resulting in a significant decline of the 10-year Treasury bond yield.
The 10-year yield has declined a fairly dramatic 300+ basis points (i.e. 3%) since the peak of the credit bubble. This decline has brought the 10-year Treasury bond yield to a 112-year monthly low. It is worth noting, however, that the quarter-century downtrend of the 10-year bond yield remains intact and will remain intact even if the 10-year yield were to drop significantly below 1.5% over the near-term.

 

Notes:
Where’s the Dow headed? The answer may surprise you. Find out right now with the exclusive & Barron’s recommended charts of Chart of the Day Plus.