When Punxsutawney Phil Speaks, People Listen
Forget about EF Hutton, or for that matter Warren Buffett. If you really want to know where stock prices are going and can’t wait until the Super Bowl, look no further than the Oracle of Punxsutawney, Phil the groundhog! Given his ‘perfect’ record at predicting the weather, we wanted to check up on the groundhog’s ability to predict the direction of the stock market.
Going back to 1944, when Groundhog Day resumed following a brief pause during World War II, Punxsutawney Phil has seen his shadow on the morning of February 2nd 59 times and seen no shadow just 13 times. The table and chart below summarize the performance of the S&P 500 from Groundhog Day through the first day of Spring in each year based on whether or not Phil sees his shadow or not. (Disclaimer: If you are reading and still think this post is meant in any way to be taken seriously, it is not.)
On years when Phil sees his shadow, it not only means we are in for a longer winter but also sub-par stock returns. In the 59 years where Phil has seen his shadow, indicating a long winter is in store, the S&P 500’s median return from that day up until the first day of spring has been a gain of 0.54% with gains 54% of the time. Those returns don’t sound so bad, but they are actually below average. That’s because in the thirteen years where Phil did not see his shadow the S&P 500 saw a median gain of 3.01% with positive returns more than three-quarters of the time.
As shown in the lower chart, there are only three years (1997, 2007, and 2011) since 1944 than Punxsutawney Phil did not see his shadow and the S&P 500 declined from Groundhog Day through the first day of spring. Of those three years, the worst decline was 2.17%. With the S&P 500 already down 1.6% today, the S&P 500 has some digging out to do if it is going to continue its trend of winning ways following those days when the groundhog doesn’t see his shadow. It’s so easy a groundhog can do it!
Right ... so, you know that was poo poo de moo moo. Punxsutawney Phill doesn't predict markets.
This year started with an 11 % drop. While that is the steepest drop to start a year, I'm pretty sure that doesn't mean much either. With similar numbers, the market ultimately went down 32 % in 2008 -- and up 33 % in 2009.
Markets go up - and markets go down. It's not what happens, it's what you do that matters.
The race for the White House is always a race for funds. Last week's Iowa caucus sheds a spotlight on the correlation of fund-raising success and success at the polls.
via Statista.
While he didn’t come out on top in the Iowa Caucus, Donald Trump surely has proven he knows how to make the biggest bang for the buck. While he isn’t even in the top ten of the best funded candidates (of both parties) ... He still achieved a second place showing in the Republican candidates in Iowa.
The Republican winner was Ted Cruz, who is the second best funded in the GOP camp.
In contrast, while Jeb Bush is the best funded Republican candidate (second overall after Democrat Hillary Clinton), he only managed a sixth place finish against the Republicans in the Iowa caucus.
While Cruz has a comfortable lead over Trump in the caucus in the Republican camp, Democratic hopeful Clinton has the most money of all candidates, democratic and overall. She virtually tied with second best funded Democrat Bernie Sanders in the caucus, who’s only in fifth place of the best funded overall.
People are afraid abandoned 'zombie ships' are an early sign of global economic collapse.
Image Credit: Sometimes Interesting.
If you are looking for insight into global supply and demand trends, the Baltic Dry Index is one of the purest leading indicators of economic activity. It offers a real-time glimpse at global raw material and infrastructure demand, as well as the supply of ships available to move this type of cargo.
Unfortunately, it is sinking faster than a ship.
via StockCharts.com
The low is troubling because this Index is often interpreted as a reliable indicator of demand.
The Index moved higher from 2003 to 2008. Since then, we have seen a series of lower highs and lower lows (in other words, it has been trending downwards since then).
I was in Jakarta during the bombings last week.
Restaurants and Malls emptied.
Yet, crazy returned to calm quickly.
Kids went to school the next day.
A day later, I went to a wedding (hence the balloon).
Normal is nice ... and nice is normal!
It serves as a reminder that time is the most precious resource we have.
Use it wisely.
There is always something working in the Markets. It still surprises me how often it changes.
A look at the recent winners and losers (based on year-end performance) shows the volatility and varied nature of this list.
Who would have guessed the big winners this year would be the French and German markets, along with the U.S. Dollar.
The chart below shows the top-and-bottom performing markets for the year. The data is color coded based on sector. The first column shows 2015 performance, followed by six columns of the most recent prior yearly market performances.
Click the image to jump to the full chart.
Table Key:
Note: The S&P 500 Index is shown in black to highlight its performance vs other markets that offer an equity portfolio full diversification.
Click this link to view weekly, monthly, quarterly, and yearly views of this data.
So, how did the U.S market compare to other markets around the world? Here is an interactive chart showing how the S&P 500 out-performed this past year.
Here is an infographic on market environments during rising interest rates.
via RCM's Alternative Blog - “Your Portfolio Guide to Rising Interest Rates.”
Death & Taxes 2016 - A Visual Guide to Where Your Federal Tax Dollars Go
This year, the Federal Budget is over a trillion dollars. Where does the money go?
To answer this, just take a look at this year's 'Death and Taxes' infographic.
The FY2016 budget chart contains over 500 departments, agencies, programs (and just about everything else the government can spend money on).
It is a mind-blowing record of government spending. Click here to see a much bigger version.
The poster is six square feet. You can get it here.
Posted at 01:17 PM in Business, Current Affairs, Market Commentary | Permalink | Comments (0)
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