Predicting the Markets: Chapter 9 Charts: August 7, 17 Dr. Edward Yardeni 1-97-73 eyardeni@ Mali Quintana --1333 aquintana@ Please visit our sites at www. blog. thinking outside the box
Table Of Contents Table Of Contents 1-1 August 7, 17 / Chapter 9 Charts: www.
3 Figure 1. FED CHAIRS & S&P (monthly, ratio scale) Jul 3 97.3. 19.. 9.3 39.3 9 1 73 77 79 1 3 9 97 9 11 1 3 7 3 7 9 71 7 7 9 91 93 99 1 3 7 13 17 19 1 Data above timeline are percentage changes in the S&P index during each term. Source: Standard & Poor s. Figure. FED CHAIRS & US TREASURY -YEAR YIELD (percent, weekly) / 1 3 7 9 1 3 7 9 71 73 7 77 79 1 3 7 9 91 93 9 97 99 1 3 7 9 11 13 17 19 1 Monthly data from April 193 to December 191, then weekly. Source: Standard & Poor s. Page 1 / August 7, 17 / Chapter 9 Charts: www.
1 1 1 1 Figure 3. FED CHAIRS & CPI (yearly percent change) 1 1 1 1 Jun - - 1 3 7 9 1 3 7 9 71 73 7 77 79 1 3 7 9 91 93 9 97 99 1 3 7 9 11 13 17 19 1 - - Source: Bureau of Labor Statistics. 3 1 Figure. FED CHAIRS & WEST TEXAS INTERMEDIATE CRUDE OIL PRICE (dollars per barrel, monthly, ratio scale) 3 1 Jul 1 3 7 9 1 3 7 9 71 73 7 77 79 1 3 7 9 91 93 9 97 99 1 3 7 9 11 13 17 19 1 Source: Haver Analytics. Page / August 7, 17 / Chapter 9 Charts: www.
1 Figure. FED CHAIRS & AVERAGE HOURLY EARNINGS* (yearly percent change) 1 Jul 1 3 7 9 1 3 7 9 71 73 7 77 79 1 3 7 9 91 93 9 97 99 1 3 7 9 11 13 17 19 1 * Production & nonsupervisory workers. Source: Bureau of Labor Statistics. 1 97 7 Figure. FED CHAIRS & CRB RAW INDUSTRIAL SPOT PRICE INDEX (ratio scale, weekly) 1 97 7 /1 37 37 7 1 3 7 9 1 3 7 9 71 73 7 77 79 1 3 7 9 91 93 9 97 99 1 3 7 9 11 13 17 19 1 7 Source: Commodity Research Bureau. Page 3 / August 7, 17 / Chapter 9 Charts: www.
Figure 7. FED CHAIRS & FEDERAL FUNDS RATE (weekly) 1 3 7 9 1 3 7 9 71 73 7 77 79 1 3 7 9 91 93 9 97 99 1 3 7 9 11 13 17 19 1 / Source: Federal Reserve Board. Figure. FED CHAIRS & DISCOUNT RATE* (percent, weekly) / 1 3 7 9 1 3 7 9 71 73 7 77 79 1 3 7 9 91 93 9 97 99 1 3 7 9 11 13 17 19 1 * Discount window borrowing rate at the Federal Reserve Bank of New York was discontinued after January, 3 and replaced by the rate charged for primary credit. Source: Bureau of Labor Statistics. Page / August 7, 17 / Chapter 9 Charts: www.
Figure 9. FED CHAIRS & PRIME RATE (percent, weekly) 1 1 1 1 1 1 1 1 / 1 3 7 9 1 3 7 9 71 73 7 77 79 1 3 7 9 91 93 9 97 99 1 3 7 9 11 13 17 19 1 Source: Federal Reserve Board. 1 1 Figure. FED CHAIRS & UNEMPLOYMENT RATE (percent) 1 1 Jul 1 3 7 9 1 3 7 9 71 73 7 77 79 1 3 7 9 91 93 9 97 99 1 3 7 9 11 13 17 19 1 Source: Bureau of Labor Statistics. Page / August 7, 17 / Chapter 9 Charts: www.
Figure 11. REAL GDP (yearly percent change) Great Moderation Q - 1 3 7 9 1 3 7 9 71 73 7 77 79 1 3 7 9 91 93 9 97 99 1 3 7 9 11 13 17 19 1 - Source: Bureau of Economic Analysis. 1 1 Figure 1. REAL GDP IMPLICIT PRICE DEFLATOR (yearly percent change) 1 1 Great Moderation Q 1 3 7 9 1 3 7 9 71 73 7 77 79 1 3 7 9 91 93 9 97 99 1 3 7 9 11 13 17 19 1 Source: Bureau of Economic Analysis. Page / August 7, 17 / Chapter 9 Charts: www.
3 Figure 13. FED CHAIRS & S&P P/E BASED ON TRAILING EARNINGS* 3 Q1 Average =.1 1 3 7 9 1 3 7 9 71 73 7 77 79 1 3 7 9 91 93 9 97 99 1 3 7 9 11 13 17 19 1 * Using quarterly average of daily data for S&P price index, and -quarter trailing reported earnings through Q3-19, then operating earnings. Source: Standard & Poor s. 3 Figure 1. EXISTING MEDIAN SINGLE-FAMILY HOME PRICES (thousand dollars, 1-month moving average) Jun 3 1 3 7 9 1 3 7 9 71 73 7 77 79 1 3 7 9 91 93 9 97 99 1 3 7 9 11 13 17 19 1 Source: National Association of Realtors. Page 7 / August 7, 17 / Chapter 9 Charts: www.
.. Figure. FED S ASSETS: -* (trillion dollars)... 3. QE1 QE QE3. 3. 3. 3...... 1. 1... Total Assets US Treasuries + Agency Debt + MBS 9 11 1 13 1. 1. 1........ 1. 1. 1. 1. 1. * Average of daily figures for weeks ending Wednesday. Note: QE1 (11//) = Fed starts buying $1.tn in mortgage securities. QE1 expanded (3/1/9) = Fed starts buying $3bn in Treasuries. QE (11/3/) = Fed starts buying $bn in Treasuries. QE3 (9/13/1) = Fed starts buying $bn/month in mortgage securities (open ended). QE3 expanded (1/1/1) = Fed starts buying $bn/month in Treasuries. Source: Federal Reserve Board. Figure 1. FED S ASSETS: -* (trillion dollars) QE1 QE QE3..... 1. 1. 1. 1. 1...... US Treasury Securities Agency Debt + MBS MBS 9 11 1 13 1..... * Average of daily figures for weeks ending Wednesday. Note: QE1 (11//) = Fed starts buying $1.tn in mortgage securities. QE1 expanded (3/1/9) = Fed starts buying $3bn in Treasuries. QE (11/3/) = Fed starts buying $bn in Treasuries. QE3 (9/13/1) = Fed starts buying $bn/month in mortgage securities (open ended). QE3 expanded (1/1/1) = Fed starts buying $bn/month in Treasuries. Source: Federal Reserve Board. Page / August 7, 17 / Chapter 9 Charts: www.
1 1 1 Figure 17. EUROZONE: GOVERNMENT -YEAR BOND YIELDS (percent, monthly) NIRP E D QE QEE 1 1 1 1 1 Bond Yields France Germany Italy Spain - Jul 93 9 9 9 97 9 99 1 3 7 9 11 1 13 1 1 17 1 19 Note: D (7//1) = ECB President Mario Draghi pledged to do "whatever it takes" to defend the euro. NIRP (//1) = negative interest-rate policy. QE (1//) = quantitative easing. QEE (3//1) = expansion and extension of QE with corporate bond purchases started /1/1. Source: Haver Analytics. - Figure 1. EUROZONE: GOVERNMENT -YEAR BOND YIELDS (percent, daily) D NIRP QE QEE 3 3 3 Bond Yields Greece Ireland Portugal 3 9 11 1 13 1 1 17 1 Note: D (7//1) = ECB President Mario Draghi pledged to do "whatever it takes" to defend the euro. NIRP (//1) = negative interest-rate policy. QE (1//) = quantitative easing. QEE (3//1) = expansion and extension of QE with corporate bond purchases started /1/1. Source: Financial Times. /7 Page 9 / August 7, 17 / Chapter 9 Charts: www.
3 Figure 19. ECB ASSETS: LOANS & SECURITIES (trillion euros. weekly) 3 ECB Holdings Loans to Euro Area Credit Institutions in Euro Securities of Euro Area Residents in Euro D NIRP QE QEE 7/ 1 1 7/ 9 11 1 13 1 1 17 1 D = ECB President Mario Draghi pledged to do "whatever it takes" to defend the euro (7//1). NIRP = negative interest-rate policy (//1). QE (1//). QEE = expansion and extension of QE (3//1, corporate bond purchases started /1/1). Source: European Central Bank....... 3. 3. 3. 3. 3...... 1. 1. 1. 1. Figure. ECB ASSETS: TOTAL (trillion euros,weekly) D NIRP QE QEE 9 11 1 13 1 1 17 1 D = ECB President Mario Draghi pledged to do "whatever it takes" to defend the euro (7//1). NIRP = negative interest-rate policy (//1). QE (1//). QEE = expansion and extension of QE (3//1, corporate bond purchases started /1/1). Source: European Central Bank. 7/...... 3. 3. 3. 3. 3...... 1. 1. 1. 1. Page / August 7, 17 / Chapter 9 Charts: www.
39 Figure 1. JAPAN: MONETARY BASE* (trillion yen, sa, ratio scale) A QQEE NIRP Jul 39 33 QQE 33 7 7 Z 9 YC 9 3 9 9 91 9 93 9 9 9 97 9 99 1 3 7 9 11 1 13 1 1 17 1 3 * Adjusted for change in reserve requirements. Note: Z = Zero Interest Rate Policy. A = Markets start to anticipate Abenomics. QQE (//13) = Quantitative and Qualitative Easing. QQEE (/31/1) = QQE expanded and extended version. NIRP (1/9/1) = Negative interest rate policy. YC (9/1/1) = Yield curve targeting. Source: Bank of Japan. Figure. NIKKEI & YEN (stock index in local currency) Nikkei 7 Yen/US Dollar (inverted scale) /7 9 / 1 1 13 1 9 97 9 99 1 3 7 9 11 1 13 1 1 17 1 Source: Haver Analytics. 1 Page 11 / August 7, 17 / Chapter 9 Charts: www.
Figure 3. CHINA: M & BANK LOANS (trillion yuan) M Bank Loans (nsa) Jun Jun 1 3 7 9 11 1 13 1 1 17 1 Source: People s Bank of China. 3 Figure. CHINA M & BANK LOANS (yearly percent change in yuan) 3 3 M Bank Loans 3 Jun Jun 1 3 7 9 11 1 13 1 1 17 1 Source: People s Bank of China. Page 1 / August 7, 17 / Chapter 9 Charts: www.
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