Charts of the Week: Historic bear markets, Nowcasting, and a lucky warm winter in Europe
This week’s charts cover the following data:
The most down days for equities since the 1970s
“Worst since 2008” is an oft-used descriptor in the financial world. It might not surprise the reader to learn that, indeed, in 2022 the S&P 500 posted its steepest decline (19.4 percent) since the year of the global financial crisis.?
If we measure the bear market by the number of down days, we have a stronger superlative, as our chart shows.?
As markets digested surging inflation, a tighter tightening cycle than expected, and Russia’s war on Ukraine, the benchmark US stock index had 143 negative trading days in 2022. That’s the most since 1974 – and matches the Great Depression year of 1931.
Tip: this chart allows for the?change region?function.
The World Bank is more pessimistic
The World Bank cut its global economic growth forecast this week and is expecting a more stagnant 2023 as countries tighten monetary policy. As our table shows, the international institution now foresees GDP will increase just 1.7 percent, down from the 3 percent pace it projected in July. (It’s also not ruling out an outright recession.)
The World Bank became only mildly more pessimistic for 2024, perhaps indicating faith in central bankers’ attempt to engineer a soft landing.?
The following document uses our revision history data and can only be accessed with?Macrobond Data Plus.
Nowcasting US GDP with Macrobond
Understanding what’s happening in the economy in real time is important. Nowcast models aim to “predict” the present, given there is a lag before data becomes available, and keep investors ahead of the curve.?
Macrobond provides customers with well-known Nowcasts from institutions such as the?OECD?and the?Atlanta Fed. But why not construct your own??
The following chart was generated from a template we constructed. It gathers time series ranging from industrial production and the labour market to business surveys and financial data. It uses built-in principal component analysis (PCA), together with a vector auto regression (VAR), to estimate real-time GDP.?
Macrobond users can change any of these input variables to create their own Nowcast.
(At the moment, our template is Nowcasting a growth slowdown for the US that stops short of a contraction.)
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Macrobond News
Other headlines you may have missed this week
Webinar: What’s new in the latest release of Macrobond?
Hear from our application specialists on Jan. 18 as they discuss the 1.26 release, which includes new features and enhancements?- including pie charts.
The recording of our Macrobond webinar is live!?
2023: Resilience, fiscal restraint and the prospect for a Fed pivot in a truly different cycle
Three Macrobond users – Daniel Tenengauzer of BNY , Lauren Goodwin, CFA of New York Life Investments and Steven Friedman of MacKay Shields LLC - gave us an in-depth look at their 2023 forecasts. Our panelists addressed “sticky and stubborn” inflation, flows into emerging markets, the geopolitical risk premium, and prospects for a Federal Reserve "pivot" away from tightening
What investors should expect in 2023
Macrobond customers chart their predictions.
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