Chart of The Day: World Market Performance, Post-Financial Crisis

Chart Courtesy of Chart of The Day

For some perspective on the post-financial crisis rally, today's chart illustrates how much of the downturn that occurred as a result of the financial crisis has been retraced by several major international stock market indices.

For example, the S&P 500 peaked at 1,565 back in October 9, 2007 and troughed at 677 back on March 9, 2009. A recent close for the S&P 500 was in the 1,848 neighborhood -- a retracement of +132% of its financial crisis bear market decline.

As today's chart illustrates, China (Shanghai Composite), Japan (Nikkei 225), India (S&P BSE Sensex), Germany (DAX), France (CAC 40) and the U.K. (FTSE 100) are all above their financial crisis lows (i.e. above 0% on today's chart) and three of the aforementioned countries (Germany, India and the U.K.) are currently trading above their respective pre-financial crisis peak (i.e. are above +100% on today's chart).

It is interesting to note that the U.S. (epicenter of the financial crisis) has outperformed the other major stock market indices (* keep in mind that the German DAX is unique in that it includes for the reinvestment of dividends) while China has lagged to the point where it only trades +9.3% above its financial crisis lows -- not that impressive of a performance considering that the financial crisis occurred well over four years ago.


Chart Courtesy of Chart of The Day

Chart of The Day: The Dow's Average Year vs Its Average Mid-Term Election Year

Chart & Analysis Courtesy of Chart of The Day

Today's chart illustrates how the stock market has performed during the Average Mid-Term Election Year versus the average year.

Since 1950, the First 9 Months of the Average Mid-Term Election Year have tended to be Subpar (see thick blue line).

That subpar performance was then followed by a significant year-end rally.
 
One theory to support this behavior is that investors abhor uncertainty. To that end, investors tend to pull back prior to an election when the outcome is unknown.

Beginning in early October, however, the outcome of the election becomes increasingly apparent and investors respond by positioning their portfolios accordingly.


Chart & Analysis Courtesy of Chart of The Day

Chart of The Day: Home Prices Surge +20% in 5 Months...

For some perspective on the all-important US real estate market, today's chart illustrates the inflation-adjusted median price of a single-family home in the United States over the past 42 years.

Not only did housing prices increase at a rapid rate from 1991 to 2005, the rate at which housing prices increased -- increased. All those gains were given back during the following 6.5 years. 

Over the past five months, however, the median price of a single-family home has surged by over 20% -- the biggest five-month gain on record (the data goes back to 1968).

The sharp downward trend that began in mid-2005 is now over.

Chart & Commentary Courtesy of Chart of the Day

Eurozone Unemployment Hits A New Record of 12.2%...

Read more @: 

http://www.businessinsider.com/chart-of-the-day-euro-unemployment-hits-its-worst-level-ever-2013-5#ixzz2UuWlFQtx

Chart of The Day: The Simplicity of Our New Health Care Reforms...

Chart of The Day: Jobs Remain Well Below 2008 Levels...

Chart Courtesy of www.ChartOfTheDay.com

In July, the Labor Department reported that nonfarm payrolls (jobs) increased by 80,000 in June.


Today's chart provides some perspective in regards to the U.S. job market. Note how the number of jobs steadily increased from 1961 to 2001 (top chart).


During the last economic recovery (i.e. the end of 2001 to the end of 2007), job growth was unable to get back up to its long-term trend (first time since 1961).


More recently, the number of nonfarm payrolls has been working its way higher but at a pace that is not fast enough to close the gap on its 1961 to 2001 trend. It is interesting to note that the current number of US jobs recently surpassed its 2001 peak.


However, if this month's pace of 80,000 new jobs were to continue for each and every month going forward, the 2008 peak would not be reached until the third quarter of 2017.

Chart of The Day: Median Single Family Home Is Still -42% Off Its Peak...

For some perspective on the all-important U.S. real estate market, today's chart illustrates the inflation-adjusted median price of a single-family home in the United States over the past 42 years.

Not only did housing prices increase at a rapid rate from 1991 to 2005, the rate at which housing prices increased -- increased. That brings us to today's chart which illustrates how the inflation-adjusted median home price is currently -42% off its 2005 peak.

That's a -$112,000 drop.

In fact, a home buyer who bought the median priced single-family home at the 1979 peak has actually seen that home lose value
(-13.7% loss). Not an impressive performance considering that more than three decades have passed.

It is worth noting that the median priced home is currently at the bottom of a price range that existed from the late 1970s into the mid-1990s.

Chart & Commentary Courtesy of Chart of The Day

Chart of The Day: Rising Rail Carloads Indicate A Reduced Risk of Recession...

Chart of The Day: France vs Italy Government Bond Spreads Widen...

Concerns over the ongoing European debt crisis continue to weigh on the markets.

For some perspective, today's chart compares the 10-year government bond yield of the 2nd (France) and 3rd largest (Italy) euro zone economies to that of the largest (Germany).

As today's chart illustrates, the crisis for these two relatively large economies really began to escalate in Q2 2011 and again in Q4 2011. Note how the French 10-year government bond spread really began to increase over the past couple months as the severity of the Italian situation began to approach extreme levels.

This is due in large part to the fact that French banks hold a great deal of Italian sovereign debt – and Italy has a great deal of debt outstanding (€1.9 trillion which equates to $2.6 trillion).

While there are clearly no good solutions to the crisis, one of the least bad solutions has the European Central Bank printing out significant amounts of euros in order to buy a significant amount of European debt.

Chart & Commentary Courtesy of Chart of The Day

Chart of The Day: A Historical Perspective on Post-Massive Bear Market Rallies

Today's chart illustrates rallies that followed massive bear markets. For today's chart, a 'massive' bear market is defined as a decline of greater than -50%.

Since the Dow's inception in 1896, there have been only three bear markets whereby the Dow declined more than -50% (early 1930s, late 1930s until early 1940s, and during the very recent financial crisis).

Today's chart also adds the rally that followed the dot-com bust during which the Nasdaq declined -78%.

The current Dow rally has followed a somewhat middle of the road path and has most closely followed the post dot-com bust rally that began back in 2002.

If the current rally were to continue to follow the post-massive bear market rally pattern, the market would have to resume its rally in relatively short order.


Commentary & Analysis Courtesy of Chart of The Day

Chart of The Day: Median Home Prices Still On The Decline...

The U.S. real estate market continues to struggle.

For some perspective, today's top chart illustrates the U.S. median price (adjusted for inflation) of a single-family home over the past 41 years while today's bottom chart presents the annual percent change in home prices (also adjusted for inflation).

Today's chart illustrates that, prior to the financial crisis, the inflation-adjusted median home price rarely declined more than -5% in one year (gray shading).

It is also very important to note that due to a large number of distressed properties, a high unemployment rate and stagnant wages, the inflation-adjusted median home price has declined -7.9% over the past year -- an annual decline larger than any that occurred during the 35 years prior to the financial crisis.

Chart & Commentary Courtesy of Chart of The Day

Chart of The Day: Where A Bank's Revenue Comes From...

Chart of The Day: Total Jobs Still Below Level Reached in 2000...

On Friday May 6, the Labor Department reported that nonfarm payrolls (jobs) increased in April for an 8th consecutive monthly gain.

Today's chart provides some perspective on the U.S. job market. Note how the number of jobs steadily increased from 1961 to 2001 (top chart).

During the last economic recovery (i.e. the end of 2001 to the end of 2007), job growth was unable to get back up to its long-term trend (first time since 1961).

More recently, nonfarm payrolls have pulled away from its 40-year trend (1961-2001) by a record percentage (bottom chart).

In fact, the current number of U.S. jobs was first reached in early 2000, more than 10 years ago!

Chart & Commentary Courtesy of Chart of The Day

Chart of The Day: Oil's 1-Day -9% Plunge in 15 Minute Intervals...

May 5, 2011.

The worst one-day drop in oil and in the commodity sector over 2 years.

Chart of The Day: Median Single Family Home Is Still -38% Off Its Peak...

For some perspective on the all-important U.S. real estate market, today's chart illustrates the inflation-adjusted median price of a single-family home in the United States over the past 41 years.

Not only did housing prices increase at a rapid rate from 1991 to 2005, the rate at which housing prices increased jumped, too.

That brings us to today's chart which illustrates how the inflation-adjusted median home price is currently -38% off its 2005 peak.

That's a -$100,000 drop!

In fact, a home buyer who bought the median priced single-family home at the 1979 peak has actually seen that home lose value (a -8.5% loss adjusted for inflation). Not an impressive performance considering that more than three decades have passed. It is worth noting that the median priced home is currently in the bottom half of a price range that existed from the late 1970s into the mid-1990s.

Chart & Commentary Courtesy of Chart of The Day

Chart of The Day - Average Pre-Election Year - Is 2011 Keeping Historical Pace?

Today's chart illustrates how the stock market has performed during the average pre-election year.

Since 1900, the stock market has tended to perform well during the first seven to eight months of the average pre-election year. For the remainder of the year, pre-election performance has tended to be more flat/choppy. In the end, however, the stock market has tended to outperform during the entirety of the pre-election year.

This pre-election year has followed the path of the average pre-election year rather closely with a rally up until mid-February and a correction into mid-March with the aftermath of the devastating Japanese earthquake and tsunami weighing heavily on the market over the past few days.

Chart & Commentary Courtesy of Chart of the Day

Chart of The Day: Why The World Has No Choice But To Buy More And More Fertilizer

Why is everyone crazy about fertilizer and potash stocks?

One part of the equation is that demand for food is growing.

But there's another reason:

The clear trend in major regions is for less and less arable land per capita. Thus the only way to get more food is to get more yield from diminishing acres.

And that means: more fertilizer!

Chart of The Day: Oil Price Spikes and Sector Performance...

From Morgan Stanley's European analysts, a look at the relative performance of various sectors in the 6 months after (in dark blue) an oil price spike.

Fair warning for U.S.  investors: This report is based on European data, but I'm presuming the impact is similar for U.S. sectors.

Bottom Line:

Energy, health care and consumer staples perform best. Utilities, telecomms, industrials and financials are NOT negatively impacted after a sharp oil spike.

As one would expect, though, the consumer discretionary (cyclicals) sector suffers the most because consumer discretionary dollars are directed to the higher cost of energy-related goods in lieu of discretionary purchases.

And, on balance, European stocks suffered losses in the -10% to -15% range 6 months before and after oil price spikes, suggesting that stocks in general suffer when sharp oil price spikes blindside the markets.

Chart of The Day: U.S. Exports to China Are Soaring

The conventional wisdom that China doesn't buy anything from America is a fairy tail!

Which begs the question:

"What kind of shape would the U.S. economy and U.S. employment be in if the emerging markets weren't buying our goods, services and technologies during the past 10 years?"

Chart of The Day: Reserve Bank Credit Outstanding - Japan vs USA

The USA's Federal Reserve balance sheet credit explosion, which began soaring in 2008, looks ominously identical to Japan's.

The credit explosion was unable to repair the economic malaise in Japan.

Will it work here in the U.S.?

Don't hold your breath...