Market Briefing: Daily Markets Overview

Market Briefing: Daily Markets Overview ruary, 218 Dr. Edward Yardeni 16-972-7683 eyardeni@ Joe Abbott 732-497-36 jabbott@ Please visit our sites at www. blog. thinking outside the box

Table Of Contents Table Of Contents S&P Index & Sectors 1 P/Es & VIX 2 Bonds 3 Yield Curve 4 High Yield Bonds Dollar & Commodities 6 CESI 7 S&P Equal-Weighted vs. Cap-Weighted 8 S&P Sectors 9 S&P 4 Sectors S&P 6 Sectors 11 S&P 1 Sectors 12 S&P 1//4/6 YTD Performance 13 S&P Sector Price Indexes 14-18 ruary, 218 / Daily Markets Overview www.

S&P Index & Sectors 3 29 Figure 1. S&P INDEX 3 29 28 28 27 26 2 24 23 22 2 2 19 18 17 214 21 216 217 218 Note: Dotted lines show previous years closing prices. 27 26 2 24 23 22 2 2 19 18 17 2 1 Figure 2. S&P SECTORS PERFORMANCE: FEBRUARY 218 MONTH-TO-DATE (percent change from last trading day of uary) ruary 218 S&P Index (-6.2) Consumer Discretionary (-.3) Consumer Staples (-.9) Energy (-7.3) Financials (-6.2) Health Care (-.8) Industrials (-6.6) Information Technology (-6.9) Materials (-7.2) Real Estate (-.) Telecom Services (-4.4) Utilities (-3.9) 2 1 - - - 1 2 3 4 8 9 11 12 1 16 17 18 19 22 23 24 2 26 29 3 - ruary 218 M-T-D Page 1 / ruary, 218 / Daily Markets Overview www.

28 26 Figure 3. P/Es & VIX FORWARD P/E RATIOS FOR S&P STOCK PRICE INDEXES* (daily) 28 26 24 22 2 S&P LargeCap (16.9) S&P 4 MidCap (16.8) S&P 6 SmallCap (18.1) 24 22 2 18 18 16 16 14 14 12 12 8 6 1999 2 21 22 23 24 2 26 27 28 29 2 211 212 213 214 21 216 217 218 219 8 6 * Daily stock price index divided by 2-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 9 8 7 7 6 6 4 3 4 3 2 2 9 91 92 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 1 16 17 18 19 2 Source: Chicago Board Options Exchange. Page 2 / ruary, 218 / Daily Markets Overview www.

3. 3. 2. Figure. US TREASURY -YEAR BOND & TIPS YIELDS (percent, daily) Bonds -Year Treasury Bond Yield (2.77) TIPS Yield (.67) 3. 3. 2. 2. 2. 1. 1. 1. 1..... -. 214 21 216 217 218 Source: Federal Reserve Board. -. 3. Figure 6. EXPECTED INFLATION IN -YEAR TIPS* (percent, daily) Expected Inflation (2.) 3. 2. 2. 2. 2. 1. 1. 1. 1.... 23 24 2 26 27 28 29 2 211 212 213 214 21 216 217 218. * Nominal minus TIPS yield. Source: Federal Reserve Board. Page 3 / ruary, 218 / Daily Markets Overview www.

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 21 216 217 218 Source: Federal Reserve Board. -Year Bond Yield (2.77) Fed Funds Rate (1.38) Yield Curve 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 32 3 Figure 8. YIELD CURVE* (basis points) 32 3 27 27 2 2 22 22 2 2 17 17 1 12 2/2 1 12 7 214 21 216 217 218 7 * US Treasury -year bond yield less federal funds rate. Source: Federal Reserve Board. Page 4 / ruary, 218 / Daily Markets Overview www.

11 Figure 9. US HIGH-YIELD CORPORATE YIELD (percent) High Yield Bonds 11 9 9 8 8 7 7 6 6 214 21 216 217 218 Source: Bank of America Merrill Lynch and Federal Reserve Board. 9 8 8 7 7 Figure. YIELD SPREAD: US HIGH-YIELD CORPORATE LESS US TREASURY -YEAR BOND (basis points, daily) 9 8 8 7 7 6 6 Spread (32) 6 6 4 4 4 4 3 3 2 214 21 216 217 218 3 3 2 * US high-yield corporate less -Year Treasury. Source: Bank of America Merrill Lynch and Federal Reserve Board. Page / ruary, 218 / Daily Markets Overview www.

Dollar & Commodities 13 13 Figure 11. JP MORGAN TRADE-WEIGHTED DOLLAR INDEX* (2=, daily) 13 13 12 12 12 12 11 Trade-Weighted Dollar (113.42) 11 1 1 9 9 9 9 8 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 1 16 17 18 19 2 8 * 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 2/2 4 8 CRB Raw Industrials Spot Price Index* 2/2 6 3 Brent Crude Oil Futures Price** (dollars per barrel) 4 2 2 26 27 28 29 2 211 212 213 214 21 216 217 218 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 / ruary, 218 / Daily Markets Overview www.

CESI 12 Figure 13. CITIGROUP ECONOMIC SURPRISE INDEX (percent) 12 8 8 6 4 2-2 -4-6 6 4 2-2 -4-6 -8 - -12-14 -16 Based on US Dollar (.) 214 21 216 217 218 Source: Citigroup. -8 - -12-14 -16.7.6 Figure 14. RELATIVE PRICE INDEX: S&P GROWTH & VALUE (relative to S&P ) Rising line indicates that the index is outperforming the S&P.7.6.6 Growth relative to S&P Value relative to S&P.6.....4.4.4.4.3 199 1996 1997 1998 1999 2 21 22 23 24 2 26 27 28 29 2 211 212 213 214 21 216 217 218 219 22 Source: Standard & Poor s and Haver Analytics..3 Page 7 / ruary, 218 / Daily Markets Overview www.

1.7 1.6 Figure 1. S&P Equal-Weighted vs. Cap-Weighted S&P RATIO: EQUAL-WEIGHTED TO MARKET-CAP-WEIGHTED 1.7 1.6 1. 1. 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 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 1 16 17 18 19 2 Source: Haver Analytics and Standard & Poor s..8.7 47 4 Figure 16. S&P STOCK PRICE INDEXES (ratio scale) 47 4 32 32 2 2 17 17 Equal-weighted S&P Market-cap-weighted S&P 2 9 91 92 93 94 9 96 97 98 99 1 2 3 4 6 7 8 9 11 12 13 14 1 16 17 18 19 2 Source: Haver Analytics and Standard & Poor s. 2 Page 8 / ruary, 218 / Daily Markets Overview www.

S&P Sectors 9 9 8 8 7 7 6 6 Figure 17. CONSUMER DISCRETIONARY S&P sector price indexes 21 216 217 218 INDUSTRIALS 21 216 217 218 8 7 6 4 6 6 CONSUMER STAPLES INFORMATION TECHNOLOGY 14 12 8 4 21 216 217 218 21 216 217 218 6 72 6 7 ENERGY MATERIALS 4 4 3 3 42 2 3 21 216 217 218 21 216 217 218 2 6 4 4 3 3 2 FINANCIALS 21 216 217 218 TELECOMMUNICATION SERVICES 21 216 217 218 22 2 17 1 12 11 1 9 9 8 8 7 7 HEALTH CARE 21 216 217 218 UTILITIES 21 216 217 218 3 27 2 22 2 Source: Standard & Poor s and Haver Analytics. Page 9 / ruary, 218 / Daily Markets Overview www.

S&P 4 Sectors 9 9 8 8 7 7 6 6 Figure 18. CONSUMER DISCRETIONARY S&P 4 sector price indexes 21 216 217 218 INDUSTRIALS 21 216 217 218 12 1 9 8 7 6 2 18 16 14 12 CONSUMER STAPLES 21 216 217 218 INFORMATION TECHNOLOGY 21 216 217 218 28 26 24 22 2 18 16 14 12 9 8 7 6 4 3 2 ENERGY 21 216 217 218 MATERIALS 21 216 217 218 6 4 3 2 12 112 97 9 82 7 67 6 FINANCIALS 21 216 217 218 TELECOMMUNICATION SERVICES 21 216 217 218 3 32 3 27 2 22 2 17 1 12 2 18 16 14 12 HEALTH CARE 21 216 217 218 UTILITIES 21 216 217 218 6 7 2 47 4 42 4 37 3 Source: Haver Analytics and Standard & Poor s. Page / ruary, 218 / Daily Markets Overview www.

S&P 6 Sectors 6 Figure 19. CONSUMER DISCRETIONARY INDUSTRIALS 12 4 4 3 S&P 6 sector price indexes 21 216 217 218 21 216 217 218 8 6 19 18 17 16 1 14 13 12 CONSUMER STAPLES 21 216 217 218 INFORMATION TECHNOLOGY 21 216 217 218 8 6 4 16 14 12 8 6 4 2 ENERGY 21 216 217 218 MATERIALS 21 216 217 218 6 6 4 4 3 3 2 112 7 2 97 92 87 82 77 72 67 62 FINANCIALS 21 216 217 218 TELECOMMUNICATION SERVICES 21 216 217 218 3. 3. 2. 2. 28 26 24 22 2 18 16 14 12 HEALTH CARE 21 216 217 218 UTILITIES 21 216 217 218 11 9 8 7 6 Source: Haver Analytics and Standard & Poor s. Page 11 / ruary, 218 / Daily Markets Overview www.

S&P 1 Sectors 8 8 7 7 6 6 Figure 2. CONSUMER DISCRETIONARY S&P 1 sector price indexes 21 216 217 218 INDUSTRIALS 21 216 217 218 77 72 67 62 7 2 47 42 67 62 7 CONSUMER STAPLES INFORMATION TECHNOLOGY 12 11 9 2 8 7 47 21 216 217 218 21 216 217 218 6 8 72 ENERGY MATERIALS 2 6 7 42 32 42 3 21 216 217 218 21 216 217 218 22 7 2 47 FINANCIALS TELECOMMUNICATION SERVICES 22 2 42 17 37 32 1 27 21 216 217 218 21 216 217 218 12 11 1 9 9 8 8 7 7 HEALTH CARE 21 216 217 218 UTILITIES 21 216 217 218 3 32 3 27 2 22 Source: Haver Analytics and Standard & Poor s. Page 12 / ruary, 218 / Daily Markets Overview www.

218 - - 1-1.1 Figure 21. S&P 1 All Sectors 218 - - 1 -.9 S&P LargeCap 218 - - 1-2.7 S&P 4 MidCap 218 - - 1-2.9 S&P 6 SmallCap 218 - - 1 2.6 Consumer Discretionary 218 - - 1 3.4 218 - - 1-3.7 218 - - 1 -. 218 - - 1-4.6 Consumer Staples 218 - - 1-4. 218 - - 1-4.6 218 - - 1-8.4 218 - - 1-4. Energy 218 - - 1-3.8 218 - - 1-7.9 218 - - 1-3.1 218 - - 1 -.2 Financials 218 - - 1 -.2 218 - - 1 -.1 218 - - 1-1.3 218 - - 1.7 Health Care 218 - - 1.4 218 - - 1 4.1 218 - - 1. 218 - - 1-1.9 Industrials 218 - - 1-1.7 218 - - 1-3.1 218 - - 1-3.9 218 - - 1.1 Information Technology 218 - - 1.1 218 - - 1.4 218 - - 1-3.4 218 - - 1-3.3 Materials 218 - - 1-3.4 218 - - 1-3.1 218 - - 1-2.9 218 - - 1 -. Telecom Services 218 - - 1 -. 218 - - 1-8. 218 - - 1-2.1 218 - - 1-7.2 Utilities 218 - - 1-6.9 218 - - 1-8.6 218-2 - 2 3 4-9.7 S&P 1//4/6 YTD Performance Page 13 / ruary, 218 / Daily Markets Overview www.

9 8 Figure 22. CONSUMER DISCRETIONARY S&P Sector Price Indexes 9 8 8 8 7 7 7 S&P 4 7 6 6 6 6 S&P 4 4 4 3 S&P 6 21 216 217 218 4 3 2 Figure 23. 2 CONSUMER STAPLES S&P 4 18 18 16 16 14 S&P 6 14 12 12 8 8 S&P 6 6 4 21 216 217 218 4 Page 14 / ruary, 218 / Daily Markets Overview www.

13 12 Figure 24. ENERGY S&P Sector Price Indexes 13 12 1 1 S&P 6 9 9 8 S&P 4 8 7 7 6 6 S&P 4 4 3 21 216 217 218 3 11 Figure 2. FINANCIALS 11 9 9 8 S&P 6 8 7 6 S&P 4 7 6 4 4 3 S&P 3 2 21 216 217 218 2 Page 1 / ruary, 218 / Daily Markets Overview www.

28 27 26 2 24 23 22 2 2 19 18 17 16 1 14 13 12 1 9 8 7 S&P Sector Price Indexes Figure 26. HEALTH CARE S&P 6 S&P 4 S&P 21 216 217 218 28 27 26 2 24 23 22 2 2 19 18 17 16 1 14 13 12 1 9 8 7 12 1 Figure 27. INDUSTRIALS 12 1 S&P 6 9 9 8 S&P 4 8 7 7 6 6 S&P 4 21 216 217 218 4 Page 16 / ruary, 218 / Daily Markets Overview www.

27 2 23 2 19 17 1 13 1 9 7 S&P Sector Price Indexes Figure 28. INFORMATION TECHNOLOGY S&P 4 S&P 27 2 23 2 19 17 1 13 1 9 7 3 S&P 6 21 216 217 218 3 6 6 Figure 29. MATERIALS 6 6 S&P 6 4 4 S&P 4 4 4 3 3 3 3 2 S&P 2 2 21 216 217 218 2 Page 17 / ruary, 218 / Daily Markets Overview www.

4 3 Figure 3. TELECOMMUNICATION SERVICES S&P Sector Price Indexes 4 3 3 S&P 4 3 2 2 2 S&P 2 1 1 S&P 6 21 216 217 218 12 Figure 31. UTILITIES 12 S&P 6 8 8 6 S&P 4 6 4 S&P 4 2 21 216 217 218 2 Page 18 / ruary, 218 / Daily Markets Overview www.

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