Macro Markets Long-Term Charts, January 2013

With S&P500 approaching its all time highs, it’s good to take a step back and look at the major macro markets from a longer term perspective. The charts below show the key markets across asset classes (equity indices, commodities, treasury yields, and currencies) in the last 10-15 years (most charts go back to 1997).

US Equity Indices

S&P500

S&P500 since 1997

This is the chart to watch in the next weeks and months (as any other time). The exact highs are 1552.87 in 2000 and 1576.09 in 2007. But this is not a 1-minute ES chart and exact values don’t matter. 1550-1600 is _the_ zone.

Dow Jones Industrial Average

Dow Jones Industrial Average since 1997

The 2007 high on the Dow was 14198.10 and we are now only 250 points (2%) away.

NASDAQ Composite

NASDAQ Composite since 1997

On the NASDAQ it is still long way to climb to the dot-com high.

S&P Midcap 400

S&P Midcap 400 since 1997

Have you heard that small and mid cap stocks outperform large caps in the long run? It’s right. They are also more volatile but you get paid for the “risk” quite well.

Commodities

Gold

Gold since 1997

I would really like to have bought gold 10 years ago. But I’m afraid I wouldn’t be able to ride this trend all the way up. Time to sell? Bubble? 3000?

Silver

Silver since 1997

The uptrend in silver is as impressive as the gold one, but far less orderly. Staying in silver for just a couple of  individual months would have given you big part of the profits.

Oil (WTI)

Oil (CL) since 1997

One thing that comes to my mind when looking at these charts is that it might be quite possible to create a (rough) proxy for silver by combining gold and oil.

US Treasury Yields

Yields have gone up in the last 6 months, but the move is hardly visible on the long-term charts (and the down move in yields of course started much earlier than 1997).

5-year Yield

5-year US treasury yield since 1997

10-year Yield

10-year US treasury yield since 1997

If we got to 3% or 3.50% on the 10-year yield in the next months, it would still not change the long-term picture, technically.

30-year Yield

30-year US treasury yield since 1997

And the same goes for 4.50% on the 30-year.

Currencies

EUR/USD

EUR/USD since 1997

The current level of 1.35 is somewhere in the middle when looking at the the post-2008 action. The obvious big thing would be signs of tightening on either side of the Atlantic. Maybe the Fed and the ECB will announce it at a joint press conference one day.

USD/JPY

USD/JPY since 2001

The yen really looks like something is going on, even on the long-term chart.

GBP/USD

GBP/USD since 2001

Technically the pound looks like a triangle in the last 4 years.

EUR/CHF

EUR/CHF since 2001

The Swiss Franc chart concludes this overview. Being a safe haven is hard in today’s world, especially when you are located in the middle of the Eurozone. The start of 2013 has written another chapter in this interesting story with the Franc weakening to 1.25. This can be another indicator of the world’s changing perceptions of the euro-crisis.