Economic Indicators

…evidence from simple tests indicates no tradable lead-lag relationship between the price of copper and a broad stock market index.

…evidence from simple tests indicates that the chemicals industry and the precious metals and mining industry do not reliably lead or lag the broad U.S. equity market. Chemicals (precious metals and mining) tend to move with (independently of) the broad stock market on a quarterly basis.

…the relationship between major currency exchange rate variations and stock returns is inconsistent and, when it appears, largely coincident rather than leading.

…the trajectory of the federal fiscal deficit significantly affects the way investors interpret economic growth and Federal Funds Rate hikes.

…stocks react to the surprise element in scheduled Federal Funds Rate announcements. There may be reliable trades in short-term continuation (reversal) of stocks after an initial spike down (up), especially for financial and information technology stocks.

…investors can significantly outperform the broad U.S. stock market by rotating into cyclical (noncyclical) sectors when the Federal Reserve discount rate begins falling (rising).

…limited analyses do not support the hypothesis that growth (value) stocks systematically outperform when the T-note/T-bill yield spread shrinks (grows).

…limited analyses offer little support for Louis Navellier’s hypothesis that growth (value) stocks systematically outperform when interest rates are rising (falling).

…change in non-farm employment by itself does not offer enough short-term explanatory power with respect to the stock market to justify trading on the announcement.

…evidence from a simple analysis of historical stock prices does not support a belief that homebuilder stocks are early warning indicators for equities in general.

…by trying to make the Federal Funds Rate lead rather than respond to economic fundamentals, the Federal Reserve causes a disconnect between short-tem and long-term interest rates.

…although energy sector ETFs track the price of crude oil fairly well over long periods during 1999-2007, short-term variations in the two series are only slightly related.

…while a dramatic move up (down) in the price of crude oil represents a modest near-term headwind (tailwind) for the overall stock market, oil price is generally not a good predictor of stock market behavior.

…investors/traders appear not to consider recent inflation rate trend or volatility in deciding whether to buy or sell stocks.

…there is practically no overall relationship between last-month change in T-note yields and next-month stock returns since the beginning of 1990. Extreme T-note yield shocks, negative and positive, may be bullish for stocks, but small subsample sizes greatly limit the reliability of this conclusion.