This thread will cover 11 macroeconomic indicators that are helpful for measuring πππ
Inflation, Fear and Uncertainty
This 𧡠will discuss when to look, where to look, what to watch for, what it means, what steps to take and risk level.
Inflation, Fear and Uncertainty
This 𧡠will discuss when to look, where to look, what to watch for, what it means, what steps to take and risk level.
The Indicators covered are;
1) GDP Deflator
2) Gold Price
3) Misery Index
4) Producer Price Index
5) Retail Investment Activity
6) Credit Spreads
7) Ted Spread
8) Texas Zombie Bank Ratio
9) TIPS Spread
10) VIX Index
11) VIXEN Index
1) GDP Deflator
2) Gold Price
3) Misery Index
4) Producer Price Index
5) Retail Investment Activity
6) Credit Spreads
7) Ted Spread
8) Texas Zombie Bank Ratio
9) TIPS Spread
10) VIX Index
11) VIXEN Index
1) GDP DEFLATOR
8.30am ET, 3rd or 4th week of the month. Data comes out with GDP.
FRED database / bea.gov / Market Data Center WSJMarkets.com
Changes in relative inflation rates between two countries.
8.30am ET, 3rd or 4th week of the month. Data comes out with GDP.
FRED database / bea.gov / Market Data Center WSJMarkets.com
Changes in relative inflation rates between two countries.
The currency of the country experiencing more inflation will eventually depreciate vis-a-vis the other.
Buy the currency experiencing relatively less inflation and sit out the short-term fluctuations and government interventions.
Risk Level: Astronomical
Buy the currency experiencing relatively less inflation and sit out the short-term fluctuations and government interventions.
Risk Level: Astronomical
2) GOLD PRICE
Gold is traded most business days
Gold.org / LBMA.org.uk / kitco.com
Changes in prices and quantities indicating that supply and/or demand for gold is shifting.
Gold is traded most business days
Gold.org / LBMA.org.uk / kitco.com
Changes in prices and quantities indicating that supply and/or demand for gold is shifting.
kitco.com
Live Gold Prices | Gold News And Analysis | Mining News | KITCO
KITCO Covers The Latest Gold News, Silver News, Live Gold Prices, Silver Prices, Gold Charts, Gold R...
Gold.org
World Gold Council | The Authority on Gold
The World Gold Council is the authority on Gold. Explore unique gold market and gold industry resear...
LBMA.org.uk
The Independent Precious Metals Authority
The LBMA advances standards for the common good of the global industry.
When demand for gold increases, investors fear inflation, near economic implosion or geopolitical instability.
Long (short) gold on the first hint of inflation or catastrophe, man-made or natural.
Risk Level: High
Long (short) gold on the first hint of inflation or catastrophe, man-made or natural.
Risk Level: High
3) MISERY INDEX
Whenever inflation rates or unemployment rates change.
Get the components of the Misery Index from unemployment rate and CPI inflation rate. bls.gov / miseryindex.us
A rising (falling) Misery Index
Whenever inflation rates or unemployment rates change.
Get the components of the Misery Index from unemployment rate and CPI inflation rate. bls.gov / miseryindex.us
A rising (falling) Misery Index
Incumbent politicians are in trouble and Fed bashing will be on the rise (decline)
Look for changes (the status quo) in Washington and at the Fed.
Risk Level: Average
Look for changes (the status quo) in Washington and at the Fed.
Risk Level: Average
4) PRODUCER PRICE INDEX
8.30 ET around the middle of the month
bps.gov / historical data is available via FRED research.stlouisfed.org
Unexpected increased (decreases) in the core PPI three or five month moving average.
8.30 ET around the middle of the month
bps.gov / historical data is available via FRED research.stlouisfed.org
Unexpected increased (decreases) in the core PPI three or five month moving average.
Inflation may be about to go wild (deflate drastically)
Get in and out of inflation hedges like TIPS, Gold, less inflationary currencies, or call/put options on bonds.
Risk Level: High
Get in and out of inflation hedges like TIPS, Gold, less inflationary currencies, or call/put options on bonds.
Risk Level: High
5) RETAIL INVESTMENT ACTIVITY
Catch as you can.
FRC doesnβt provide the funds flow data to just anyone. Have to be a big institution / corporation. View morningstar.com to estimate AUM flows.
Catch as you can.
FRC doesnβt provide the funds flow data to just anyone. Have to be a big institution / corporation. View morningstar.com to estimate AUM flows.
Changes in retail investor sentiment as measured by investment flows into (out of) different types of funds. Look for record flows of funds into (out) different asset classes.
A record outflow (inflow) of funds from a certain asset could signal that the end of bull (bear) market.
Buy when retail sells and sell when retail buys.
Risk level: Medium
Buy when retail sells and sell when retail buys.
Risk level: Medium
6) CREDIT SPREADS: THE RISK STRUCTURE OF INTEREST RATES
Each business day
FRED database research.stlouisfed.org
Narrowing (widening) credit spreads
Each business day
FRED database research.stlouisfed.org
Narrowing (widening) credit spreads
The economy is going to grow (shrink) that quarter and next.
Buy stocks and commodities (buy US T-bills, gold and hold cash)
Risk Level: Medium
Buy stocks and commodities (buy US T-bills, gold and hold cash)
Risk Level: Medium
7) TED SPREAD
Look continuously.
Calculate Ted Spread by taking Libor rates and subtracting US T-bill rates.
Increases and decreases in Ted Spread.
Look continuously.
Calculate Ted Spread by taking Libor rates and subtracting US T-bill rates.
Increases and decreases in Ted Spread.
Banks will be lending less (more) in the near future, slowing (stimulating) the economy.
Appropriate cyclical investments. Lowering exposure incrementally to riskier assets like stocks as Ted Spreads widen.
Risk level: Medium
Appropriate cyclical investments. Lowering exposure incrementally to riskier assets like stocks as Ted Spreads widen.
Risk level: Medium
8) TEXAS ZOMBIE BANK RATIO
Look daily.
The Federal Deposit Insurance Corporation (FDIC) fdic.gov data can also be accessed here occ.treas.gov. Alternatively look at publicly traded bank stocks quarterly earnings 10Q or annual releases 10K.
Look daily.
The Federal Deposit Insurance Corporation (FDIC) fdic.gov data can also be accessed here occ.treas.gov. Alternatively look at publicly traded bank stocks quarterly earnings 10Q or annual releases 10K.
Increases (decreases) in the Texas Ratio (nonperforming assets / tangible capital)
The bank or banking sector is more (less) likely to fail.
Sell (buy) the bank or sector esp as the ratio approaches the zombie land of 100%.
Risk Level: Medium
The bank or banking sector is more (less) likely to fail.
Sell (buy) the bank or sector esp as the ratio approaches the zombie land of 100%.
Risk Level: Medium
9) TIPS SPREAD
Look daily.
FRED database / treasurydirect.gov
Sustained inflation > (<) 2% as measured by TIPS spread.
Fed will likely hike (cut) interest rates
Appropriate cyclical investments. Fed to hike, risk-off. Fed to cut, risk-on
Risk level: Medium
Look daily.
FRED database / treasurydirect.gov
Sustained inflation > (<) 2% as measured by TIPS spread.
Fed will likely hike (cut) interest rates
Appropriate cyclical investments. Fed to hike, risk-off. Fed to cut, risk-on
Risk level: Medium
There may be excess fear in the markets and ready for a bounce in stocks.
Buy SPY the morning after the spike and sell it at the end of the day.
Risk level: Super Astronomical
Buy SPY the morning after the spike and sell it at the end of the day.
Risk level: Super Astronomical
11) VIXEN INDEX
Look whenever you visit a restaurant.
Also called the Hot Waitress Index. An increase in the attractiveness of local waitstaff.
Well paid jobs where beauty is required are scarce. The economy is softer than the pudding you just ordered.
Look whenever you visit a restaurant.
Also called the Hot Waitress Index. An increase in the attractiveness of local waitstaff.
Well paid jobs where beauty is required are scarce. The economy is softer than the pudding you just ordered.
Ask out the hot waitress (only if you have no wifey or equivalent) then buy defensive stocks like utilities, food staples and pharma.
Risk level: Depends on your game
Risk level: Depends on your game
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