Market Briefing: Daily Markets Overview September 25, 217 Dr. Edward Yardeni 516-972-7683 eyardeni@ Joe Abbott 732-497-536 jabbott@ Please visit our sites at blog. thinking outside the box
Table Of Contents Table Of Contents S&P 5 Index & Sectors 1 P/Es & VIX 2 Bonds 3 Yield Curve 4 High Yield Bonds 5 Dollar & Commodities 6 CESI 7 S&P 5 Equal-Weighted vs. Cap-Weighted 8 S&P 5 Sectors 9 S&P 4 Sectors S&P 6 Sectors 11 S&P 15 Sectors 12 S&P 15/5/4/6 YTD Performance 13 S&P 5 Sector Price Indexes 14-18 September 25, 217 / Daily Markets Overview
254 25 246 242 238 234 23 226 222 218 214 2 26 22 198 194 19 186 182 178 174 Figure 1. S&P 5 INDEX 214 215 216 217 Note: Dotted lines show previous years closing prices. S&P 5 Index & Sectors 254 25 246 242 238 234 23 226 222 218 214 2 26 22 198 194 19 186 182 178 174 13 12 11 9 8 7 6 5 4 3 2 1-1 -2-3 -4-5 -6 Figure 2. S&P SECTORS PERFORMANCE: SEPTEMBER 217 MONTH-TO-DATE (percent change from last trading day of August) September 217 S&P 5 Index (1.) Consumer Discretionary (-.1) Consumer Staples (-.4) Energy (9.3) Financials (3.3) Health Care (.4) Industrials (3.6) Information Technology (-1.8) Materials (3.) Real Estate (-1.8) Telecom Services (3.9) Utilities (-1.7) 1 2 3 4 5 8 9 11 12 15 16 17 18 19 22 23 24 25 26 29 3 13 12 11 9 8 7 6 5 4 3 2 1-1 -2-3 -4-5 -6 September 217 M-T-D Page 1 / September 25, 217 / Daily Markets Overview
P/Es & VIX 28 26 Figure 3. FORWARD P/E RATIOS FOR S&P STOCK PRICE INDEXES* (daily) 28 26 24 24 22 2 S&P 5 LargeCap (17.6) S&P 4 MidCap (17.8) S&P 6 SmallCap (19.5) 22 2 18 18 16 16 14 14 12 12 8 8 6 99 1 2 3 4 5 6 7 8 9 11 12 13 14 15 16 17 18 6 * Daily stock price index divided by 52-week forward consensus expected operating earnings per share. Source: Thomson Reuters I/B/E/S and Standard & Poor s. 9 8 Figure 4. VIX: S&P 5 9 8 7 7 6 6 5 5 4 4 3 3 2 2 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 11 12 13 14 15 16 17 18 19 2 Source: Chicago Board Options Exchange. Page 2 / September 25, 217 / Daily Markets Overview
3.5 3. 2.5 Figure 5. US TREASURY -YEAR BOND & TIPS YIELDS (percent, daily) Bonds -Year Treasury Bond Yield (2.22) TIPS Yield (.38) 3.5 3. 2.5 2. 2. 1.5 1.5 1. 1..5.5.. -.5 214 215 216 217 218 Source: Federal Reserve Board. -.5 3. Figure 6. EXPECTED INFLATION IN -YEAR TIPS* (percent, daily) Expected Inflation (1.84) 3. 2.5 2.5 2. 2. 1.5 1.5 1. 1..5.5. 23 24 25 26 27 28 29 2 211 212 213 214 215 216 217 218. * Nominal minus TIPS yield. Source: Federal Reserve Board. Page 3 / September 25, 217 / Daily Markets Overview
3.2 3. 2.8 2.6 2.4 2.2 2. 1.8 1.6 1.4 1.2 1..8.6.4.2. -.2 Figure 7. US TREASURY -YEAR BOND YIELD & FED FUNDS RATE (percent) 214 215 216 217 218 Source: Federal Reserve Board. -Year Bond Yield (2.7) Fed Funds Rate (1.13) Yield Curve 9/27 3.2 3. 2.8 2.6 2.4 2.2 2. 1.8 1.6 1.4 1.2 1..8.6.4.2. -.2 325 3 Figure 8. YIELD CURVE* (basis points) 325 3 275 275 25 25 225 225 2 2 175 175 15 15 125 125 75 214 215 216 217 218 9/27 75 * US Treasury -year bond yield less federal funds rate. Source: Federal Reserve Board. Page 4 / September 25, 217 / Daily Markets Overview
11 Figure 9. US HIGH-YIELD CORPORATE YIELD (percent) High Yield Bonds 11 9 9 8 8 7 7 6 6 5 214 215 216 217 218 Source: Bank of America Merrill Lynch and Federal Reserve Board. 5 9 85 8 75 7 Figure. YIELD SPREAD: US HIGH-YIELD CORPORATE LESS US TREASURY -YEAR BOND (basis points, daily) 9 85 8 75 7 65 6 55 5 Spread (331) 65 6 55 5 45 45 4 4 35 3 25 214 215 216 217 218 35 3 25 * US high-yield corporate less -Year Treasury. Source: Bank of America Merrill Lynch and Federal Reserve Board. Page 5 / September 25, 217 / Daily Markets Overview
Dollar & Commodities 135 13 Figure 11. JP MORGAN TRADE-WEIGHTED DOLLAR INDEX* (2=, daily) 135 13 125 125 12 12 115 Trade-Weighted Dollar (115.98) 115 1 1 5 5 95 95 9 9 85 95 96 97 98 99 1 2 3 4 5 6 7 8 9 11 12 13 14 15 16 17 18 19 2 85 * Argentina, Australia, Brazil, Bulgaria, Canada, Chile, China, Colombia, Croatia, Czech Rep., Denmark, Ecuador, Egypt, Hong Kong, Hungary, India, Indonesia, Israel, Japan, Korea, Kuwait, Malaysia, Mexico, Morocco, New Zealand, Nigeria, Norway, Pakistan, Panama, Peru, Philippines, Poland, Romania, Russia, Saudi Arabia, Singapore, South Africa, Sweden, Switzerland, Taiwan, Thailand, Turkey, Ukraine, UK, Uruguay, US, Venezuela, Vietnam, & Euro Area. Source: JP Morgan. 7 Figure 12. BRENT CRUDE OIL PRICE & INDUSTRIALS COMMODITY PRICE INDEX 16 6 14 12 5 9/21 4 8 CRB Raw Industrials Spot Price Index* 9/21 6 3 Brent Crude Oil Futures Price** (dollars per barrel) 4 2 25 26 27 28 29 2 211 212 213 214 215 216 217 218 2 * Includes copper scrap, lead scrap, steel scrap, tin, zinc, burlap, cotton, print cloth, wool tops, hides, rosin, rubber, and tallow. ** Nearby futures price. Source: Commodity Research Bureau and Haver Analytics. Page 6 / September 25, 217 / Daily Markets Overview
CESI 12 Figure 13. CITIGROUP ECONOMIC SURPRISE INDEX (percent) 12 8 8 6 6 4 4 2 2-2 -4-6 -2-4 -6-8 - -12-14 -16 Based on US Dollar (-8.7) 214 215 216 217 218 Source: Citigroup. -8 - -12-14 -16.7.65 Figure 14. RELATIVE PRICE INDEX: S&P 5 GROWTH & VALUE (relative to S&P 5) Rising line indicates that the index is outperforming the S&P 5.7.65.6 Growth relative to S&P 5 Value relative to S&P 5.6.55.55.5.5.45.45.4.4.35 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 2 211 212 213 214 215 216 217 218 219 22 Source: Standard & Poor s and Haver Analytics..35 Page 7 / September 25, 217 / Daily Markets Overview
1.7 1.6 1.5 S&P 5 Equal-Weighted vs. Cap-Weighted Figure 15. S&P 5 RATIO: EQUAL-WEIGHTED TO MARKET-CAP-WEIGHTED 1.7 1.6 1.5 1.4 1.4 1.3 1.3 1.2 1.2 1.1 1.1 1. 1..9.9.8.7 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 11 12 13 14 15 16 17 18 19 2 Source: Haver Analytics and Standard & Poor s..8.7 42 37 32 Figure 16. S&P 5 STOCK PRICE INDEXES (ratio scale) 42 37 32 27 27 22 22 17 17 12 12 7 7 Equal-weighted S&P 5 Market-cap-weighted S&P 5 2 9 91 92 93 94 95 96 97 98 99 1 2 3 4 5 6 7 8 9 11 12 13 14 15 16 17 18 19 2 Source: Haver Analytics and Standard & Poor s. 2 Page 8 / September 25, 217 / Daily Markets Overview
S&P 5 Sectors 75 7 65 6 55 5 Figure 17. CONSUMER DISCRETIONARY S&P 5 sector price indexes 215 216 217 INDUSTRIALS 215 216 217 65 625 6 575 55 525 5 475 45 425 4 6 55 5 45 CONSUMER STAPLES 215 216 217 INFORMATION TECHNOLOGY 215 216 217 5 95 9 85 8 75 7 65 6 725 65 ENERGY MATERIALS 4 35 575 5 3 425 25 35 45 425 4 375 35 325 3 275 25 95 9 85 8 75 7 215 216 217 FINANCIALS 215 216 217 HEALTH CARE 215 216 217 Source: Standard & Poor s and Haver Analytics. 215 216 217 TELECOMMUNICATION SERVICES 215 216 217 UTILITIES 215 216 217 2 225 2 175 15 125 3 275 25 225 2 Page 9 / September 25, 217 / Daily Markets Overview
S&P 4 Sectors 85 8 75 7 65 6 55 5 Figure 18. CONSUMER DISCRETIONARY S&P 4 sector price indexes 215 216 217 INDUSTRIALS 215 216 217 95 9 85 8 75 7 65 6 55 5 2 18 CONSUMER STAPLES INFORMATION TECHNOLOGY 22 2 16 18 16 14 14 12 215 216 217 215 216 217 12 95 85 75 65 55 45 35 25 975 9 825 75 675 6 ENERGY 215 216 217 FINANCIALS 215 216 217 MATERIALS 215 216 217 TELECOMMUNICATION SERVICES 215 216 217 5 475 45 425 4 375 35 325 3 275 25 35 325 3 275 25 225 2 175 15 125 17 16 15 14 13 12 1 HEALTH CARE 215 216 217 Source: Haver Analytics and Standard & Poor s. UTILITIES 215 216 217 55 525 5 475 45 425 4 375 35 Page / September 25, 217 / Daily Markets Overview
S&P 6 Sectors 6 55 5 45 4 35 175 17 165 16 155 15 145 14 135 13 125 12 16 14 12 8 6 4 2 25 975 925 875 825 775 725 675 625 22 2 18 16 14 12 Figure 19. CONSUMER DISCRETIONARY S&P 6 sector price indexes 215 216 217 CONSUMER STAPLES 215 216 217 ENERGY 215 216 217 FINANCIALS 215 216 217 HEALTH CARE 215 216 217 Source: Haver Analytics and Standard & Poor s. INDUSTRIALS 215 216 217 INFORMATION TECHNOLOGY 215 216 217 MATERIALS 215 216 217 TELECOMMUNICATION SERVICES 215 216 217 UTILITIES 215 216 217 95 9 85 8 75 7 65 6 7 65 6 55 5 45 4 55 5 45 4 35 3 25 3.5 3. 2.5 2. 95 9 85 8 75 7 65 6 55 Page 11 / September 25, 217 / Daily Markets Overview
S&P 15 Sectors 7 65 Figure 2. CONSUMER DISCRETIONARY INDUSTRIALS 675 625 6 575 525 55 5 S&P 15 sector price indexes 215 216 217 215 216 217 475 425 625 575 525 475 CONSUMER STAPLES 215 216 217 INFORMATION TECHNOLOGY 215 216 217 1 5 95 9 85 8 75 7 65 8 725 65 575 5 425 35 5 475 45 425 4 375 35 325 3 275 5 95 9 85 8 75 7 ENERGY 215 216 217 FINANCIALS 215 216 217 HEALTH CARE 215 216 217 Source: Haver Analytics and Standard & Poor s. MATERIALS 215 216 217 TELECOMMUNICATION SERVICES 215 216 217 UTILITIES 215 216 217 4 35 3 25 2 225 2 175 15 125 35 325 3 275 25 225 Page 12 / September 25, 217 / Daily Markets Overview
S&P 15/5/4/6 YTD Performance All Sectors Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Telecom Services Utilities 3 2 - -2-3 -4-5 3 Figure 21. S&P 15.9 217 2 9.3 - -2-3 -4-5 3 217 2 4.9 - -2-3 -4-5 3 217 2 - -. -2-3 -4-5 3 217 2 8.2 - -2-3 -4-5 3 217 2 18.3 - -2-3 -4-5 3 217 2 11.7 - -2-3 -4-5 3 217 2 22.2 - -2-3 -4-5 3 217 2 12.7 - -2-3 -4-5 3 217 2 - -7.9-2 -3-4 -5 3 217 2.2 - -2-3 -4-5 217 S&P 5 LargeCap 3 2 11.5 - -2-3 -4-5 3 217 2 9.9 - -2-3 -4-5 3 217 2 5.2 - -2-3 -4-5 3 217 2 - -9. -2-3 -4-5 3 217 2 9.2 - -2-3 -4-5 3 217 2 18.2 - -2-3 -4-5 3 217 2 12.1 - -2-3 -4-5 3 217 2 23. - -2-3 -4-5 3 217 2 13.8 - -2-3 -4-5 3 217 2 - -7.7-2 -3-4 -5 3 217 2.4 - -2-3 -4-5 217 S&P 4 MidCap 3 2 6.7 - -2-3 -4-5 3 217 2 5.4 - -2-3 -4-5 3 217 2-3.9 - -2-3 -4-5 3 217 2 - -2-24.6-3 -4-5 3 217 2 2.8 - -2-3 -4-5 3 217 2 18.1 - -2-3 -4-5 3 217 2 11.3 - -2-3 -4-5 3 217 2 15.2 - -2-3 -4-5 3 217 2 12. - -2-3 -4-5 3 217 2 - -2-3 -4-39.3-5 3 217 2 7.2 - -2-3 -4-5 217 S&P 6 SmallCap 3 2 4.7 - -2-3 -4-5 3 217 2 3.8 - -2-3 -4-5 3 217 2 1.7 - -2-3 -4-5 3 217 2 - -2-3 -3.7-4 -5 3 217 2-2.6 - -2-3 -4-5 3 217 2 22.6 - -2-3 -4-5 3 217 2 6.2 - -2-3 -4-5 3 217 2 9. - -2-3 -4-5 3 217 2.6 - -2-3 -4-5 3 217 2 -.7 - -2-3 -4-5 3 217 2 15.8 - -2-3 -4-5 217 Page 13 / September 25, 217 / Daily Markets Overview
8 75 Figure 22. CONSUMER DISCRETIONARY S&P 5 Sector Price Indexes 8 75 7 7 65 65 6 55 S&P 5 S&P 4 S&P 6 6 55 5 5 45 45 4 35 215 216 217 4 35 2 18 Figure 23. CONSUMER STAPLES 2 18 16 16 14 14 12 S&P 5 S&P 4 S&P 6 12 8 8 6 4 215 216 217 6 4 Page 14 / September 25, 217 / Daily Markets Overview
13 12 Figure 24. ENERGY S&P 5 Sector Price Indexes 13 12 1 1 S&P 5 S&P 4 S&P 6 9 9 8 8 7 7 6 6 5 5 4 3 215 216 217 4 3 5 95 Figure 25. FINANCIALS 5 95 85 85 75 65 S&P 5 S&P 4 S&P 6 75 65 55 55 45 45 35 35 25 215 216 217 25 Page 15 / September 25, 217 / Daily Markets Overview
22 2 Figure 26. HEALTH CARE S&P 5 Sector Price Indexes 22 2 2 2 19 19 18 18 17 17 16 16 15 15 14 14 13 12 1 S&P 5 S&P 4 S&P 6 13 12 1 9 8 7 215 216 217 9 8 7 Figure 27. INDUSTRIALS 9 9 8 8 7 S&P 5 S&P 4 S&P 6 7 6 6 5 5 4 215 216 217 4 Page 16 / September 25, 217 / Daily Markets Overview
22 2 2 19 18 17 16 15 14 13 12 1 9 8 7 6 5 4 3 Figure 28. INFORMATION TECHNOLOGY S&P 5 Sector Price Indexes S&P 5 S&P 4 S&P 6 215 216 217 22 2 2 19 18 17 16 15 14 13 12 1 9 8 7 6 5 4 3 55 5 Figure 29. MATERIALS 55 5 45 45 4 35 S&P 5 S&P 4 S&P 6 4 35 3 3 25 25 2 215 216 217 2 Page 17 / September 25, 217 / Daily Markets Overview
4 35 Figure 3. TELECOMMUNICATION SERVICES S&P 5 Sector Price Indexes S&P 5 S&P 4 S&P 6 4 35 3 3 25 25 2 2 15 15 215 216 217 Figure 31. UTILITIES 8 8 6 S&P 5 S&P 4 S&P 6 6 4 4 2 215 216 217 2 Page 18 / September 25, 217 / Daily Markets Overview
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