Market Briefing: Daily Markets Overview

Market Briefing: Daily Markets Overview April 3, 18 Dr. Edward Yardeni 516-972-7683 eyardeni@ Joe Abbott 732-497-536 jabbott@ Please visit our sites at www. 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 April 3, 18 / Daily Markets Overview www.

S&P 5 Index & Sectors 3 29 Figure 1. S&P 5 INDEX 3 29 28 28 27 26 25 24 23 2 19 18 17 14 15 16 17 18 Note: Dotted lines show previous years closing prices. Source: Standard & Poor s. 27 26 25 24 23 2 19 18 17 15 5 Figure 2. S&P SECTORS PERFORMANCE: APRIL 18 MONTH-TO-DATE (percent change from last trading day of March) April 18 S&P 5 Index (1.4) Consumer Discretionary (3.7) Consumer Staples (-3.3) Energy (.4) Financials (.6) Health Care (2.2) Industrials (-1.8) Information Technology (1.3) Materials (1.2) Real Estate (-.1) Telecom Services (-) Utilities (2.4) 15 5-5 1 2 3 4 5 8 9 11 12 15 16 17 18 19 22 23 24 25 26 29 3-5 Source: Standard & Poor s. April 18 M-T-D Page 1 / April 3, 18 / 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 S&P 5 LargeCap (16.2) S&P 4 MidCap (16.2) S&P 6 SmallCap (17.2) 24 22 18 16 18 16 14 14 12 12 8 1999 1 2 3 4 5 6 7 8 9 11 12 13 14 15 16 17 18 19 8 * 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 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 Source: Chicago Board Options Exchange. Page 2 / April 3, 18 / Daily Markets Overview www.

3.5 3. 2.5 Figure 5. -YEAR US TREASURY BOND & TIPS YIELDS (percent, daily) Bonds -Year Treasury Bond Yield (2.95) TIPS Yield (.78) 3.5 3. 2.5 2. 2..5.5.. -.5 14 15 16 17 18 Source: Federal Reserve Board. -.5 3. Figure 6. EXPECTED INFLATION IN -YEAR TIPS* (percent, daily) Expected Inflation (2.17) 3. 2.5 2.5 2. 2..5.5. 3 4 5 6 7 8 9 11 12 13 14 15 16 17 18 19. * Nominal minus TIPS yield. Source: Federal Reserve Board. Page 3 / April 3, 18 / Daily Markets Overview www.

3.2 3. 2.8 2.6 2.4 2.2 2. 1.8 1.6 1.4 1.2.8.6.4.2. -.2 Figure 7. US TREASURY -YEAR & 2-YEAR YIELDS & FED FUNDS RATE (percent) -Year Bond Yield (2.95) 2-Year Treasury Yield (2.49) Fed Funds Target Rate (1.63) 14 15 16 17 18 Source: Federal Reserve Board. Yield Curve 3.2 3. 2.8 2.6 2.4 2.2 2. 1.8 1.6 1.4 1.2.8.6.4.2. -.2 325 3 275 25 225 175 Figure 8. YIELD CURVE (basis points) -Year Treasury Minus Federal Funds Target Rate (132.5) 2-Year Treasury (46.) 325 3 275 25 225 175 15 125 75 5 25 14 15 16 17 18 Source: Federal Reserve Board. 15 125 75 5 25 Page 4 / April 3, 18 / Daily Markets Overview www.

11 Figure 9. US HIGH-YIELD CORPORATE YIELD (percent) High Yield Bonds 11 9 9 8 8 7 7 6 4/27 6 5 14 15 16 17 18 Source: Bank of America Merrill Lynch and Federal Reserve Board. 5 24 2 Figure. YIELD SPREAD: US HIGH-YIELD CORPORATE LESS US TREAURY -YEAR BOND (basis points, daily) 24 2 18 18 16 14 1 16 14 1 8 8 6 6 4 97 98 99 1 2 3 4 5 6 7 8 9 11 12 13 14 15 16 17 18 19 Note: Shaded areas denote recessions according to the National Bureau of Economic Research. Source: Bank of America Merrill Lynch and Federal Reserve Board. 4/27 4 Page 5 / April 3, 18 / Daily Markets Overview www.

Dollar & Commodities 135 13 Figure 11. JP MORGAN TRADE-WEIGHTED DOLLAR INDEX* (=, daily) 135 13 125 125 1 1 115 Trade-Weighted Dollar (115.29) 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 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 1 5 4/27 4 4/27 8 CRB Raw Industrials Spot Price Index* 6 3 Brent Crude Oil Futures Price** (dollars per barrel) 4 5 6 7 8 9 11 12 13 14 15 16 17 18 19 * 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 / April 3, 18 / Daily Markets Overview www.

CESI 1 Figure 13. CITIGROUP ECONOMIC SURPRISE INDEX (percent) 1 8 8 6 6 4 - -4-6 4 - -4-6 -8 - -1-14 -16 Based on US Dollar (41.8) 14 15 16 17 18 Source: Citigroup. -8 - -1-14 -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 1 2 3 4 5 6 7 8 9 11 12 13 14 15 16 17 18 19 Source: Standard & Poor s and Haver Analytics..35 Page 7 / April 3, 18 / Daily Markets Overview www.

1.7 1.6 Figure 15. S&P 5 Equal-Weighted vs. Cap-Weighted S&P 5 RATIO: EQUAL-WEIGHTED TO MARKET-CAP-WEIGHTED 1.7 1.6 1.4 1.4 1.3 1.3 1.2 1.2 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 Source: Haver Analytics and Standard & Poor s..8.7 475 4 Figure 16. S&P 5 STOCK PRICE INDEXES (ratio scale) 475 4 325 325 25 25 175 175 Equal-weighted S&P 5 Market-cap-weighted S&P 5 25 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 Source: Haver Analytics and Standard & Poor s. 25 Page 8 / April 3, 18 / Daily Markets Overview www.

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