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Chart Title	Date
Flight to king cash	03/26/2020
Consumer confidence fades	03/19/2020
Friday fear	03/12/2020
VIX spikes as markets shake	03/05/2020
Short interest lowest since 2007	02/27/2020
Asian stocks a bargain or a risk now?	02/20/2020
Earnings update	02/13/2020
Renewables spending	02/06/2020
China's flexibility	01/30/2020
Large-cap value beats small-cap	01/23/2020
Gold rises above and falls below multiyear high	01/16/2020
International demand, central banks helped bonds last year	01/09/2020
Battery technology, supply issues help propel nickel	01/02/2020
A good sign for 2020?	12/19/2019
Jobs picture improves again	12/12/2019
Exports to China vary by US state	12/05/2019

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Flight to king cash

As stocks have come under pressure from coronavirus, assets in money market funds (which are fixed income mutual funds that invest in debt with short maturities and minimal credit risk) are nearing an 11-year peak. This indicator may be worth watching to see how willing investors are to take risk. If money continues to flow into more liquid assets like money market funds, that might mean investors broadly think there is still too much risk to get back into stocks.

Source: Investment Company Institute, Bloomberg, as of March 23, 2020.

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Consumer confidence fades

Consumer confidence has been damaged as coronavirus fears have spread. Since hitting a 2020 peak in late February, the Consumer Sentiment Index has plunged. While still high relative to multi-decade levels, many investors and economists believe the index will likely continue to head lower in the coming months..

Source: Strategas, as of March 19, 2020.

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VIX spikes as markets shake

The nearly 11-year bull market has not been without substantial, periodic spikes in volatility, as measured by the CBOE Volatility Index—commonly known as the VIX. The recent surge for the VIX toward 50 has roughly matched other high-volatility levels that occurred in 2010, 2011, 2015, and 2018. Among those instances of volatility, corrections (a decline of 10% or more) have been more common than bear markets (a decline of 20% or more). In fact, the lone bear market that has occurred during this multiyear bull run was in late 2018, when US stocks shed 20% as the VIX only made it as high as 36. As of early March, the S&P 500 reached correction territory with coronavirus fears gripping global economies, but the US stock market has not turned into an official bear yet. It remains to be seen how significant the impact of coronavirus on global economic activity may be.

Source: FactSet, as of March 5, 2020.

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Friday fear

An interesting trend has been playing out for much of the year. Friday has been a down day nearly every week over the past couple months for global stocks, as measured by the MSCI All-Country World Index. Of course, past performance does not guarantee future results: Fridays will not necessarily continue to be negative days. But this trend may speak to investor's reticence to buy into the weekend—potentially for fear of unforeseen negative news when the market is closed.

Source: FactSet, as of March 5, 2020. Circled areas indicate Fridays.

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Short interest lowest since 2007

Short interest is the number of shares that are sold short in a particular stock, index, or other investment. It can be interpreted as how much bearish sentiment there is at a point in time. Generally, the greater the short interest, the more bearish the sentiment among investors, and vice versa. Alternatively, some technical analysts view short interest as a contrarian indicator. With short interest for an S&P 500 proxy near the lowest level since early 2007, some might view this as investors in the US market being too complacent.

Source: Bloomberg, as of February 24, 2020.

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Asian stocks a bargain or a risk now?

Asian stocks have never been this cheap relative to US stocks. In 2020, coronavirus has exacerbated the multiyear trend of outperformance by US stocks, resulting in a further widening of the spread between the S&P 500 Index 12-month forward P/E ratio and MSCI Asia Pacific Index.

Source: Bloomberg

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Earnings update

Thus far through earnings season, US companies are exceeding or meeting consensus earnings estimates at roughly the same clip as previous quarters. At the sector level, technology and consumer staples companies are topping estimates the most on a revenue basis.

Source: Bloomberg, as of February 7, 2020.

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Renewables spending

Annual global investment in renewable energy increased 1% to $282 billion in 2019, led by record offshore wind farm spending in Europe and Asia. Additionally, a 28% surge in wind and solar spending in the US was the result of projects started before some tax credits were set to expire. That growth helped offset an 8% decline in China.

Source: BloombergNEF

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China's flexibility

The world's 2nd largest economy has displayed an apt ability to adjust amid trade wars. December trade data from China showed stronger than expected monthly import growth (16.3%) and export growth (7.6%). Looking under the surface, exports to the US plummeted 12.5%. The trade balance declined 8.5% with the US to almost $296 billion, as China's overall surplus hit $422 billion.

Source: China General Administration of Customs, Bloomberg, as of January 24, 2020. ASEAN = Association of Southeast Asian Nations.

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Large-cap value beats small-cap

By one measure, larger US companies (as represented by the S&P 500) appeared more attractive based on valuations than smaller companies (as represented by the Russell 2000). The relative forward price-to-earnings (P/E) ratio for the S&P 500 is more than 25% cheaper than the Russell 2000, as of early January .

Source: Bloomberg, as of January 22, 2020.

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Gold rises above and falls below multiyear high

The price of gold had surged over $1,600 in the wake of tensions surrounding the assassination of a top Iranian military commander. As geopolitical tensions have subsided, gold has dropped back near $1,540 per ounce. However, that still represents a huge rally from a multiyear nadir of $1,100.

Source: Bloomberg

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International demand, central banks helped bonds last year

The more than $11 trillion in negative-yielding debt globally helped drive appetite for high-quality income-producing assets. This factor—in addition to several rate cuts by global central banks—boosted bond returns in 2019, and some investors believe demand will continue to drive bonds in 2020. Of note, dealers sold more bonds to non-US investors last year than they bought.

Source: Bloomberg, Bank of America, Trace. Data represents bonds maturing in 1 year or more, through December 13. Negative numbers indicate foreign buying.

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Battery technology, supply issues help propel nickel

While most base metals—including copper, aluminum, lead, zinc, and tin—had a tough year in 2019, nickel soared. As a key input for batteries and stainless steel, nickel rose more than 30% last year, easily outpacing metal counterparts that suffered under the weight of trade tensions and other factors. One key driver sending nickel prices higher occurred in the 3rd quarter, when Indonesia, which is a major producer of nickel, announced an unexpected early ban on raw-ore exports.

Source: LME, Bloomberg, as of December 31, 2019.

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A good sign for 2020?

The S&P 500 has gained roughly 25% year to date, as of mid-December. That may be good news for next year. Since 1950, the S&P 500 has gained more than 20% annually 18 times, and has gained an average of 11% in the following year. Only 3 losses were recorded in the years after a 20% or more annual gain.

Source: Bloomberg, MKM Partners, as of December 15, 2019.

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Jobs picture improves again

The US jobless rate fell to 3.5%, matching the lowest level since 1969, after adding 266,000 workers in November. Average hourly earnings climbed 3.1% from a year earlier, topping projections, and the prior month was revised higher as well. This year-over-year average wage growth in November helped offset some of what has been a declining growth trend for worker earnings since February.

Source: Bloomberg

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Exports to China vary by US state

While total US exports to China have been impacted since the unofficial beginning of the US-China trade war in early 2018, the effect has been uneven across the United States. Looking just at data from September 2018 to September 2019, most states experienced a decline ranging from 0% to 40% for all merchandise exported to China—with a handful actually seeing an increase. During this period, total US exports to China plunged 15% to $78.8 billion.

Source: US Commerce Department, US-China Business Council

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