Six Signs to Track

Daniel Shainberg

September 25, 2018

Over the past few decades the S&P 500 has not seen a losing year when any one of the following conditions were present to start the year. From 2009 through 2017 all of these conditions were present. In 2018 all conditions were met again other than oil inflation. As interest rates rise, further “red-light” warning signs could create meaningful risks to un-hedged portfolios, but for now, these indicators suggest continued growth in the short term.

a) U.S. 30-year Treasury Begins Year <4% Yield 

2018: 2.8%

b) U.S. Investment Grade Debt Begins Year <4% Yield 

2018: 3.97%

c) Cash % of Total Assets for Non-Financial Companies >10% 

2018: 19.7%

d) Expectation for Fed Tightening of Interest Rates >75bps 

2018: Expectation 75bps

e) Brent Crude Spot Oil Price Dropped >20% versus 3 Year Peak 

2018: Crude is soaring 

f) U.S. High Yield Begins Year <8% Yield

2018: 5.7%

Dan Shainberg
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