A Monday Dozen #2

In the final analysis, you need to have the courage to hold the position and take the risk. You need to be aware that the world is very sophisticated and always ask yourself: ‘How many people are left to act on this particular idea?’ You have to consider whether the market has already discounted your idea. ~ Michael Marcus

Good morning! We’ve got slowing global growth, the Fed’s room to maneuver, Canada Surprising, and some falling ROE… Here’s your Monday Dozen chart pack.

1. The percentage of PMIs around the world is still positive but shrinking fast.

2. The OECD Total CLI is at its lowest level since the GFC.

3. But it looks like it may be starting to base on a MoM and YoY basis.

4. The market is way ahead of the Fed but there’s still plenty of room for it to become more so.

5. Ed Yardeni’s Boom-Bust Barometer (dotted red line) suggests a pullback in equities may be coming.

6. The relative valuations of European banks are in the 1st percentile of their 10Y history — that’s the lowest since the height of the dot-com bubble. Is there any price at which EU banks become a buy?

7. Bonds and equities are telling two different stories. One of them is very wrong.

8. Here’s the MO Composite Sentiment Index. It includes a number of short and long-term sentiment and positioning data. Investors were pretty bearish going into last week but became more positive by Friday and are now slightly bearish/neutral heading into Monday.

9. What’s going on in Canada? America’s tophat has the highest Citi Economic Surprise Index (CESI) reading, by far. That means the economic data is coming in more positive than the consensus forecast.

10. Relative yields between the US and key trading partners have recently turned against the dollar (black line). Will the dollar follow suit or just shrug it off?

11. Relative growth though is keeping the dollar strong — at least for the moment.

12. Aggregate Return on Equity (ROE) may be rolling over again after it found a bottom in mid-17’.