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Chart of the Week

Each week, Senior Analyst Lorenzo La Posta, CFA and Gabby Byron discuss our Chart of The Week.

Listen below for their insights. 

 

Chart of the Week - 11/08/22

The chart shows China’s trade balance (level of exports minus the level of imports) over the past seven years.

 

Source: Momentum Global Investment Management, Bloomberg Finance L.P. Data to 31 July 2022.

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Chart of the Week - 04/08/22

The chart shows expectation of future interest rates in the US for upcoming Federal Open Market Committee (FOMC) meetings up until January 2024. Calculated using data from Fed funds futures, it shows the number of interest rate hikes/cuts that markets are expecting between now and future FOMC meeting dates. It also shows the expected policy rate at those dates.

Source: Momentum Global Investment Management, Bloomberg Finance L.P. Data to 2 August 2022.

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Chart of the Week - 28/07/22

The chart shows consumer confidence indices for the US, UK, and the Eurozone area since 2005.

Source: Momentum Global Investment Management, Bloomberg Finance L.P. Data to July 2022.

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Chart of the Week - 21/07/22

Inflation remains one of the key concerns in markets. The chart shows the US, Turkey, and Sri Lanka Consumer Price Index (CPI) year-on-year over the last five years.

Source: Momentum Global Investment Management, Bloomberg Finance L.P. Data to 30 June 2022.

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Chart of the Week - 14/07/22

The chart shows the 5-year breakeven inflation rates for the US, UK and Germany which measure the market’s expectation of what the annual inflation rate will be five years from now, over the subsequent five years, on average.

Source: Momentum Global Investment Management, Bloomberg Finance L.P. Data to 12 July 2022.

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Chart of The Week - 07/07/22

This week we reflect on the year-to-date performance of a number of major asset classes. The data runs from 31 December 2021 to 30 June 2022, showing total returns in US dollars.

Source: Momentum Global Investment Management, Bloomberg Finance L.P. Data from 31 December 2021 to 30 June 2022.

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Chart of the Week - 30/06/22

The chart shows the US 10-year government bond yield (blue line) and the share price performance of the S&P Banks Index relative to the S&P 500 (yellow line).

Source: Momentum Global Investment Management, Bloomberg Finance L.P. Data to 28 June 2022.

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Chart of the Week - 23/06/22

The chart shows the Momentum Risk Aversion Index since December 2002, a proprietary index that measures a degree of risk aversion within global markets across equities, fixed income and commodities. 

Source: Momentum Global Investment Management, Bloomberg Finance L.P. Data to 21 June 2022.​​

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Chart of the Week - 16/06/22

The chart shows the headline interest rates at central banks around the world over the last five years.

Source: Bloomberg Finance L.P., Momentum Global Investment Management. Data to 14 June 2022.

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Chart of The Week - 09/06/22

The chart shows the Bloomberg Agriculture, Energy and Industrial Metals indices’ prices since 2000.

Source: Bloomberg Finance L.P., Momentum Global Investment Management. Data to 7 June 2022.

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Chart of The Week - 26/05/22

The chart shows the performance of the MSCI World ESG Leaders index and the MSCI World Quality index since the end of 2020.

Source: Bloomberg Finance L.P., Momentum Global Investment Management. Data to 24 May 2022

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Chart of The Week - 19/05/22

The chart shows the price-to-earnings (P/E) ratio for the MSCI World, MSCI World Growth and MSCI World Information Technology indices.

Source: Bloomberg Finance L.P., Momentum Global Investment Management. Data to 17 May 2022.

 

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Chart of the Week - 12/05/22

The chart shows the performance of various currencies versus the US dollar as well as the performance of the US dollar trade-weighted index (a measure of the value of the USD against a basket of other major currencies) year-to-date.

Source: Momentum Global Investment Management, Bloomberg Finance L.P.

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Chart of the Week - 05/05/22

The chart shows the US Treasury yield curve (red line) and the US breakeven yield curve (blue line) as at 4 May 2022. The first compares the yields available on similar US treasury bonds with different maturities. The breakeven yields, indicate the maximum level to which bond yields can move to in the next year before investors start experiencing a net negative total return.

Source: Momentum Global Investment Management, Bloomberg Finance L.P.

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Chart of the Week - 28/04/22

This week we look at one of the top performing equity sub asset classes this year, namely listed infrastructure. Listed infrastructure encompasses companies that manage and operate critical infrastructure assets, from electric or water utilities networks, to gas pipelines, toll roads and telecommunication towers.

Source: Momentum Global Investment Management, Bloomberg Finance L.P. data as at 26 April 2022

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Chart of the Week - 21/04/22

This week’s chart shows the exchange rate of the Japanese yen against the US dollar (showing JPY per 1 USD). The yen’s recent depreciation (illustrated by an upward sloping line) started in early 2021 though it has recently depreciated against the dollar every day for 13 days up to 19 April.

Source: Momentum Global Investment Management, Bloomberg Finance L.P.

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Chart of the Week - 14/04/22

The chart shows the performance of the MSCI World sector indices year-to-date, in total return dollar terms. The notable outperformers so far this year have been the energy and metal sectors supported by higher underlying commodity prices, boosted by elevated demand and tight supply.

Sources: Momentum Global Investment Management, Bloomberg Finance L.P.

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Chart of the Week - 07/04/22

The first quarter of 2022 saw the worst quarterly performance of US Treasuries (government bonds) on record as the Fed moved to tackle soaring consumer prices by withdrawing stimulus and hiking interest rates.

 

Sources: Momentum Global Investment Management, Bloomberg Finance L.P.

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Chart of the Week - 31/03/22

This chart shows the calendar year total returns for the MSCI Europe ex UK index and the maximum drawdown the index experienced over each calendar year since 2000. Maximum drawdown reflects the greatest peak-to-trough fall over the period (the worst possible loss an investor could have made if they had bought at the peak and sold at the trough in the same calendar year).

Sources: Momentum Global Investment Management, Bloomberg Finance L.P.

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Chart of the Week - 24/03/22

The chart shows the returns of various mainstream bond indices rebased to 100 from December 2019. Markets reacted as the Federal Reserve lifted interest rates by 25 basis points last week, as it faces the highest level of inflation in forty years.

Sources: Momentum Global Investment Management, Bloomberg Finance L.P.

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Chart of the Week - 17/03/22

The chart shows the price-to-earnings (P/E) ratio for the MSCI China index (Chinese equities) relative to the MSCI ACWI index (global equities). The P/E ratio measures the relationship between a company’s stock price and its earnings per share (EPS), giving investors a sense of the valuation of the company, or broader market, and how much investors are paying for the earnings of a business. Companies with high P/E ratios are often growth stocks and can, at times, be overvalued compared to their current fundamentals. Similarly, companies with low P/E ratios are referred to as value stocks and are sometimes considered as undervalued. Over the last twelve months, the valuation of Chinese equities relative to broader global equities has declined to sit at historic lows.

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Chart of the Week - 10/03/22

The chart shows the German 10-year inflation breakeven rate, derived from the difference between conventional nominal and inflation adjusted government bond yields of the same maturity. Its value indicates what market participants expect inflation to average annually over the next 10 years.

Sources: Momentum Global Investment Management, Bloomberg Finance L.P.

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Chart of the Week - 03/03/22

Given recent events, we thought it would be a good opportunity to examine past wars/conflicts and analyse the drawdowns of the US equity market (as measured by the Dow Jones Industrial Average index) and how long it took for the index to return to its prior peak.

Sources: Momentum Global Investment Management, Bloomberg Finance L.P.

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Chart of the Week - 24/02/22

The chart shows the quarterly net flows and total assets in sustainable or ESG (environmental, social and governance) funds since 2011. The last two years have seen a stark increase in demand for these funds, accelerated by the pandemic as well as events such as COP26 which have put issues around sustainability into the spotlight.

Sources: Morningstar, Momentum Global Investment Management

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Chart of the Week - 17/02/22

The chart shows the Atlanta Fed’s Flexible-Price and Sticky-Price Consumer Price Indices (CPI) since 1970. The Flexible-Price CPI (green line) represents goods and services included in the CPI that change price relatively frequently, whereas the Sticky-Price CPI (blue line) represents those changing price relatively slowly. For example, some sticky prices are those for medical care services, alcoholic beverages, household furnishings while things like new vehicles, fuel and gas, or bakery products are part of the flexible price items. 

Source: Federal Reserve Bank of Atlanta, Momentum Global Investment Management. Data to 31/01/22

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Chart of the Week - 10/02/22

Last week, Facebook (now known as Meta, reflecting Mark Zuckerberg’s desire to focus on construction of the virtual metaverse) saw its market value drop by $250bn in a single day, showing despite how popular and glamourous they might be they can suddenly look far from that in share price terms if those once stellar earnings suddenly look a little more challenged.

Source: Bloomberg Finance L.P., Momentum Global Investment Management as at 09/02/22

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Chart of the Week - 03/02/22

After a volatile start to the year, US equity benchmarks, the S&P 500 and NASDAQ, have ended the month trading well below their highs of the beginning of the month and mid-November respectively. The S&P 500 ended the month down -5.2% and the NASDAQ down -9.0% in local terms. The chart shows the net monthly fund flows of the Invesco QQQ Trust since 1999, one of the most actively traded exchange-traded funds (ETFs) in the world. The fund only invests in non-financial stocks listed on the NASDAQ, which has naturally seen higher weightings to large tech names. It ultimately is trying to track the performance of the NASDAQ 100 Index. 

Source: Bloomberg Finance L.P., Momentum Global Investment Management as at 31/01/22

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Chart of the Week - 27/01/22

US equity markets have been fallen under strong pressure recently, as expectations build that the Fed will unwind monetary stimulus measures quicker than expected. In fact, markets are now expecting the Fed to increase interest rates as much as four times this year, starting in March, to fight surging inflation. Higher interest rates raise borrowing costs for all businesses as well as making companies’ future earnings worth less in terms of discounted value.

Source: Bloomberg Finance L.P., Momentum Global Investment Management. Data to 25th January 2022.

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Chart of the Week - 20/01/22

The chart shows the Federal Reserve’s FOMC (Federal Open Market Committee) ‘dot plot’ – essentially each official’s expectations on where interest rates will be at future dates. Each dot represents an individual’s prediction as to what the federal funds rate will be at the end of each year until 2024 and then longer-term views. The median of all dots is then used as a basis to set the official rate forecast. Since its introduction, the Fed dot plot has become one of the most closely watched news releases among investors. The most recent projections from the FOMC meeting dated 15th December (so admittedly now a bit dated) indicated three rate rises before the end of 2022 and another three moves in 2023. 

Source: Bloomberg Finance, L.P.  Momentum Global Investment Management.

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Chart of the Week - 13/01/22

The chart shows the US 10 year government yield (red line) and the share price performance of the MSCI World Financials Index relative to the MSCI World Index (blue line). An upward sloping blue line indicates the MSCI World Financials Index is outperforming the broader MSCI World Index, whereas a downward sloping line means it is underperforming. Since the beginning of the year, the performance of the MSCI World Financials Index has bettered the broader index.  The yield on the benchmark 10-year Treasury bond has climbed for seven consecutive days to 1.77%, now above the highs of last year. Through time there has been a fairly tight relationship between the two. Higher yields have been positive for financial equities whilst lower yields are often associated with underperformance.

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Chart of the Week - 06/01/22

For our first chart of 2022, we thought we would reflect on the performance of a number of asset classes in 2021. The strongest performer which we chart here was global equities (blue line); the MSCI World Index rallied 20% in 2021 in contrast to the MSCI Emerging Markets index which fell 5% over the same period. What was more remarkable was the returns seen in certain commodity markets, including UK natural gas (+294%) and oil (+50%). Government bonds were more challenged, ending the year with a -7% total return. Rising cases of Covid-19 and surging inflation threatened investor returns towards the end of the year. However, these developments failed to ruin the year’s rally.

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