Charts of the Week

This week’s charts begin with an examination of why the Federal Reserve’s latest move is being dubbed a “hawkish pause”: the “dot plot” of rate forecasts is creeping higher. We show the historic divergence between gross domestic product (GDP) and gross domestic income (GDI), which might be giving the Fed pause as it ponders the true strength of the US economy. As the US yield curve stays inverted past 300 days, we show how this historic recession indicator is reaching early 1980s proportions. Amid this environment, we visualise how US investors are continuing to choose the high yields of money-market funds. In Germany, we track how the nation’s economy is lagging European peers. Finally, for China, we break down slumping exports by destination, and show how the nation’s air traffic rebound has been largely domestically driven, with much less international travel.

Charts of the Week has reached its 100th edition and this milestone has given us a chance to reflect on where it all began. The first edition was published on October 1, 2021, during a time of global economic disruption caused by the Covid-19 pandemic. Half of the charts in that edition focused on the tourism and travel market, which was still struggling, while the other half focused on various long-term trends in the global economy. To other topics this week: hurricane occurrences in the US, the historical relationship between Federal Reserve hiking cycles and recessions, asset class valuations, the impact of rising energy costs on German industry and the steep decline in Indian foreign direct investment.

This week’s charts begin with futures markets’ take on ECB interest rates: yesterday’s “dovish hike” was probably the last one, and rate cuts will come in the spring. Turning to the tight US labour market, we visualise how few strikes there have been since 1990; as the UAW begins industrial action against the Big Three, times are changing. For China, we have a dashboard showing how futures traders are betting on industrial commodities and precious metals, as well as a visualisation of how property prices used to reliably go up month on month across the country. For Europe, we examine the seasonality in Citigroup’s index of economic surprises and show how French nuclear power is coming to the rescue of the electricity grid after last year’s ill-timed reactor maintenance. Finally, we compare the budget deficit blow-outs in the pandemic to nations’ (generally) much healthier public finances today.

This week’s charts begin with an examination of the US Strategic Petroleum Reserve, which remains at a multi-decade low just as Russia and Saudi Arabia pare production to keep oil prices high. Two high-profile conferences are in focus for financial news flow: we examine how Jackson Hole Fed pronouncements affect markets, and ahead of the G20 in New Delhi, we examine India’s resilient economy. Turning to your investment portfolio, we take another look at the historic performance of momentum strategies versus a traditional 60/40 stock-bond split. In Europe, we show how the German business confidence clock is ticking towards gloom and create a model examining the Swedish currency’s valuation against the euro. Finally, in the US, we show the sectors that are hiring in the second half of 2023 after the high-profile tech layoffs earlier in the year.

As we move into the Northern Hemisphere autumn, this week’s charts begin with a visualisation of stocks in September – historically a month where equities have a habit of falling. We take a multi-pronged look at the US: the Atlanta Fed’s nowcast suggests bullish (perhaps too bullish) growth is taking place in the third quarter; a “soft landing” may be taking place in the job market; and Fed funds futures are on the move, predicting modest but steady rate cuts in 2024-25. Turning to Europe, we examine the shrinking money supply and parallels to (and differences with) 2009. Finally, we break down China’s construction slowdown between the office, industrial and residential sectors, and examine how HICP figures around the EU are showing persistent core inflation.

This week’s charts begin with a “traffic light” measurement of German business confidence. Turning to the euro-dollar exchange rate, we run a regression model aiming to correlate currency moves with the price of oil and interest-rate differentials. In the wake of Turkey’s surprisingly large rate increase, we chart the lira’s performance after similar episodes. We compare the likelihood of making money from a buy-and-hold strategy in various equity markets and show how this failed in Japan. For the inflation hawks, we visualise the M2 measure of money supply. In emerging markets, we track how Chinese construction starts have slowed and how the BRICS economies are, broadly, not converging – with the US or each other. Finally, we turn to Las Vegas, where the house is winning: casinos are raking in above-trend gambling revenue that evokes the pre-GFC good times in the American economy.

This week’s charts begin with a visualisation of how countries dominated by their capital city (the UK and France) compare to more regionally balanced economies like Germany and the US. Turning to the American consumer, we show how the stock of pandemic-era savings has dwindled and people are increasingly running up their credit-card balances. In Europe, the economy might have avoided recession, but the leading indicators are gloomy; in Britain, real wage increases have started to outpace inflation. And we conclude with a chart on China’s shrinking exports.

This week’s charts begin with a visualisation of “early hikers” – central banks, mostly in emerging markets, that moved most quickly when the current episode of inflation began. We revisit this month’s non-farm payrolls number, which was released alongside revisions of past NFP figures that suggest the US labour market is weakening. We created two charts that might be relevant to your investment portfolio: one shows the probability of making money in the S&P 500 over time, while the other models an aggressive asset-allocation strategy. We conclude with two visualisations on China, tracking a decline in foreign direct investment but a rebound in raw materials prices paid by manufacturers – and PPI.

This week’s charts begin with a new visualisation of European inflation: tracking the proportion of countries experiencing steeper or more limited price increases at a given moment. Moving on to manufacturing, we break down global PMI (the sentiment survey of factory managers) to show how 2023 is very different from 2022. Turning to an alternative dataset, we examine satellite image-derived activity at Amazon’s quieter-than-usual warehouses. For Britain, we chart the post-pandemic spike in bankruptcies. In Asia, we visualise the historic changes to Japan’s yield control policy and examine India’s stock market and its rich valuations. And finally, we use a political sentiment dataset to examine perceptions of polarisation in the US.

This week’s charts begin with a candlestick that shows how the current foreign-exchange volatility makes a massive difference to your equity returns. Speaking of volatility, we track Bitcoin’s ups and downs and visualise how commodity prices from wheat to oil tend to boom and crash frequently – and in unison. Revisiting one of our favourite themes, we show how expectations for Fed policy are changing as Jerome Powell tackles sticky inflation and the economy stays resilient. The stickiest inflation of all is arguably in Argentina, where we chart years of double-digit price increases and worse. Finally, we examine China’s youth unemployment, seven months into the economy’s great reopening.

This week’s charts begin with a deep dive into Chinese real estate, showing the cities that have experienced the steepest home-price declines while presenting evidence that the situation is stabilising. Turning to US inflation, we break down sectors by standard deviation, showing a broad disinflationary trend with a few outliers – and then conduct a scenario analysis for 2024, showing how month-on-month CPI trajectory will affect the annualized inflation print. For the European Union, we chart perceptions of corruption; some nations appear to be cleaner since 2011, but the opposite is the case for others. And in emerging markets, we chart the potential return to normal for Indian rainfall and the history of Brazilian currency volatility through the two eras of President Lula. Finally, we visualise the US mega-caps, led by Big Tech, that have returned to an all-time market value high.

In this week's charts we take a fresh look at July US stock market performance and consider the impact of London Tube and New York Subway usage on commercial real estate prices. We compare government bond yields for Spain, France, Germany with the EU, and highlight concerns of possible deflation in China. Additionally, we examine the effects of falling energy prices on fiscal balances in the Middle East and Africa and highlight immigration trends in the UK. Finally, we assess the link between parliamentary terms and income growth from Blair to Sunak.

This week’s charts begin with a dashboard breaking down the much tighter labour markets of the OECD; southern and eastern Europe are leading the way. We then compare the current gold price to historic norms, and examine how US industrial policy is driving a construction boom that is offsetting weakness in homebuilding. On inflation, we create an indicator for the Fed “supercore” concept that zeroes in on services, and show how Switzerland has become the first country to return to the old normal of inflation targets around 2 percent. In China, we visualise economic theories that argue that the yuan’s recent weakness is overdone. Finally, we track how the S&P 500 did after previous Fed tightening cycles ended; the dotcom bust is the only occasion where stocks went down.

This week’s charts begin by visualising the steady increase in foreign workers hosted by historically immigration-averse Japan. Moving to inflation, we show how it’s slowing in more and more countries – but the stubborn absolute level of price increases is offsetting resilient GDP growth in the US. Two charts for US investors show how stocks’ risk premium is in the doldrums, while bond yields are exceeding equity earnings yields for the first time in many years. We chart decades of central-bank hikes and cuts, aggregating the differing trends seen in emerging and developed markets. And we finish by measuring how most nations’ workforce participation rates have approached – and sometimes surpassed – pre-pandemic levels.

This week’s charts begin by showing a concerning trend in China – net new borrowing is concentrated in the business sector as households pull back. We look at two central banks: we show how the Fed’s “dot plot” moved toward predicting rates will stay higher for longer, and we show how Turkey abandoned monetary policy orthodoxy in the run-up to its recent election. On inflation, we break down UK price increases by components such as food and shelter, and take an OECD-wide view that shows CPI is taking its time catching up with trends in PPI, as it usually does. Finally, we examine a spike in US media layoffs and visualise how different countries are exposed to natural disasters.

This week’s charts begin by visualising volatility in the foreign-exchange market over the decades, comparing the effects of events like the Plaza Accord and Black Wednesday to the relatively benign environment of the present day. We move on to showcase our new partnership with Blue Chip forecasts, which are projecting a decline in borrowing costs next year. On the climate front, we compare damage from natural catastrophes to incidences of El Niño. And as forecasters ponder prospects for recession, we show how few OECD economies are contracting compared to the recent past. Finally, in Europe, we measure the lingering effects of central-bank interventions and show how overcrowded households are unevenly distributed across the EU.

This week’s charts begin by examining the relationship between central banks’ balance sheets and stocks. As the former shrinks, are equities overvalued? We created three visualisations that compare countries: the performance of various emerging markets, incomes of retirees in developed economies, and breakdowns of local stock markets by sector. For Australia, we track the growing importance of three mega-commodities to export revenue. For the tech world, we create an index of artificial-intelligence stocks and compare it to historic stock bubbles. And as economies surprise on the upside in 2023, we chart how forecasters have changed their expectations for growth and inflation.

This week’s charts begin by breaking down trends in US bank lending as concerns about a credit crunch persist. Climate remains in focus; we show how drought in Kansas is hitting the wheat fields, with implications for global food prices. We examine China from several angles – using satellite data to reveal that the number of shoppers parked at shopping malls has stopped bouncing back; visualising the nation’s trade partners; and noting the local stock market’s disconnect from growth-value swings seen in the US. Moving to Europe, we show how wages are starting to catch up to inflation, and demonstrate an indicator of British economic resilience.

This week’s charts begin by revisiting our table of winners and losers in the S&P 500, showing the reversal in 2023 as tech rallies and energy stumbles. We also show how individual stock investors are staying in the market despite broad negativity amongst American consumers. With all eyes on the Fed’s attempt to engineer a “soft landing,” we examine previous recessions and historic examples of monetary tightening “pauses” by the central bank. In Europe, our “clock” of the business cycle shows consumers are a positive outlier as sectors like construction remain in the doldrums. In Russia, energy revenues are sliding, while in Asia, tourism is surging back to pre-pandemic levels. Finally, we generate a forecast for US house prices using our partnership with Indicio, a machine-learning platform.