This investor dashboard provides daily updated indicator charts as a quantified gauge of the markets' current state and the U.S. economy. Knowledge of the present conditions and trends helps to anticipate the future and make better, more informed investment decisions.
Markets in March 2021
- The stock market is still nervous, with higher than average volatility. However, the 30-day volatility ranges below their 12-month counterpart, expressing less concern about the immediate future.
- Treasury yields continue to rise, expressing less concern about an imminent stock-market crash but fear of possible inflation.
- Economic indicators send ambiguous signals. Sales continue to being strong and industrial production is recovering quickly. At the same time, the progress of real income and employment towards recovery has stalled.
Most investment portfolios rely on stocks as the main driver for growth. Therefore, the stock market is the main concern for many investors.
The top chart shows the stock market's total return, along with its drawdowns from previous all-time highs. This provides investors with a benchmark for recent stock market performance.
Below, the chart shows implied volatility for the next 30 days and the next 12 months. The spread between these volatilities provides investors with a forward-looking sentiment of market volatility.
Typical investment portfolios rely on bonds as the primary income source and an important instrument to reduce overall portfolio volatility.
On top, the chart shows the total return for various bonds. Investors can use this as a benchmark for recent bond market performance.
The bottom chart shows yields for Federal Funds, long-term Treasury Bonds, and Corporate Bonds. The spread between these yields can be used as a forward-looking sentiment of market direction.
National Activity Index
The economy and the markets are only loosely related but ultimately headed towards a common destination. Therefore economic indicators help to anticipate the future.
The Chicago Fed's National Activity Index ("CFNAI") combines 85 economic indicators into a single monthly measure. The CFNAI draws its indicators from 4 broad categories: Consumption, production, employment, and sales.
Historically, a CFNAI below -0.7 has been a leading indicator of a recession.
Like the CFNAI, this chart looks at the four main economic drivers: employment, production, sales, and income.
The top chart shows the overall trend since the end of the last recession. In a healthy economy, all four indicators are expected to rise.
The bottom chart shows the drawdown since the previous all-time high. A decline from an earlier high is interpreted as a leading indicator of a recession.
Charts courtesy of TuringTrader.com