McVEAN Trading & Investments, LLC
TWENTY ONE QUARTERS AND COUNTING HOW LONG CAN THIS EXPANSION LAST? Michael Drury Chief Economist McVean Trading and Investments, LLC
VIRTUAL SUMMER SERIES THE GLOBAL INTERDEPENDENCE CENTER Aug 27, 2014 Past Performance Is Not Necessarily Indicative Of Future Results.
0
REAL GDP
CURRENT QUARTER % CHANGE FROM YEAR AGO 10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
-2.0%
-4.0% Mar-60
Mar-64
Mar-68
Mar-72
Mar-76
Mar-80
Mar-84
Mar-88
Mar-92
Mar-96
Past Performance Is Not Necessarily Indicative Of Future Results.
Mar-00
Mar-04
Mar-08
Mar-12
1
REAL FINAL SALES
CURRENT QUARTER % CHANGE FROM YEAR AGO 8.0%
6.0%
4.0%
2.0%
0.0%
-2.0%
-4.0%
Past Performance Is Not Necessarily Indicative Of Future Results.
2
REAL FINAL SALES
CURRENT QUARTER % CHANGE; SEASONALLY ADJUSTED, ANNUAL RATE
5.0
4.0
3.0
2.0
1.0
0.0
-1.0
-2.0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 Past Performance Is Not Necessarily Indicative Of Future Results.
3
AGGREGATE HOURS WORKED VS AVERAGE HOURLY EARNINGS 3 MONTH AVERAGE % CHANGE FROM YEAR AGO
6.0%
4.5%
4.0%
4.0%
2.0%
3.5%
0.0%
3.0%
-2.0%
2.5%
-4.0%
2.0%
-6.0%
1.5%
-8.0% Jan-85
1.0% Jan-89
Jan-93
Jan-97
AGGREGATE HOURS WORKED
Jan-01
Jan-05
Jan-09
AVERAGE HOURLY EARNINGS (right)
Past Performance Is Not Necessarily Indicative Of Future Results.
Jan-13
Jul 2014
4
HOUSING STARTS 3 MONTH AVERAGE
2.4
2.000
2.1
1.750
1.8
1.500
1.5
1.250
1.2
1.000
0.9
0.750
0.6
0.500
0.3 Mar-90
0.250 Mar-92
Mar-94
Mar-96
Mar-98
Mar-00
Housing Starts 3 Mo Avg
Mar-02
Mar-04
Mar-06
Mar-08
Single Housing Starts 3 Mo Avg
Past Performance Is Not Necessarily Indicative Of Future Results.
Mar-10
Mar-12
Mar-14
Jul 2014 5
LIGHT VEHICLE SALES
3 MONTH AVERAGE IN MILLIONS 20
18
16
14
12
10
8
Past Performance Is Not Necessarily Indicative Of Future Results.
6
HOUSEHOLD BALANCE; 4 QUARTER AVERAGE PERCENT OF GROSS DOMESTIC PRODUCT
6.0%
4.0%
2.0%
0.0%
-2.0%
-4.0%
-6.0% Jan-61
Jan-65
Jan-69
Jan-73
Jan-77
Jan-81
Jan-85
Jan-89
Jan-93
Jan-97
(Personal income – (Outlays + Residential Investment)) / Gross Domestic Product Past Performance Is Not Necessarily Indicative Of Future Results.
Jan-01
Jan-05
Jan-09
Jan-13
Q2 2014
7
DOMESTIC CORPORATE PROFITS
CURRENT QUARTER % CHANGE FROM YEAR AGO 80%
60%
40%
20%
0%
-20%
-40% Mar-82
Mar-86
Mar-90
Mar-94
Mar-98
Mar-02
Mar-06
Mar-10
Mar-14
Q1 2014 Past Performance Is Not Necessarily Indicative Of Future Results.
8
DOMESTIC CORPORATE PROFITS VS CAPITAL INVESTMENT AS A % OF GDP 12%
16.0%
15.0% 10% 14.0%
8%
13.0%
12.0% 6% 11.0%
4% Mar-74
Mar-79
Mar-84
Mar-89
Mar-94
DOMESTIC CORPORATE PROFITS
Mar-99
Mar-04
CAPITAL INVESTMENT
Past Performance Is Not Necessarily Indicative Of Future Results.
Mar-09
10.0% Mar-14
Q2 2014 9
CORPORATE VS GOVERNMENT BALANCE; 4 QUARTER AVERAGE PERCENT OF GROSS DOMESTIC PRODUCT
10.0%
5.0%
0.0%
-5.0%
-10.0%
-15.0% Mar-61
Mar-65
Mar-69
Mar-73
Mar-77
Mar-81
Mar-85
Corporate Balance
Mar-89
Mar-93
Mar-97
Government Balance
Past Performance Is Not Necessarily Indicative Of Future Results.
Mar-01
Mar-05
Mar-09
Mar-13
Q2 2014
10
REAL GDP
4 QUARTER AVERAGE % CHANGE FROM YEAR AGO 6.00%
4.00%
2.00%
0.00%
-2.00%
-4.00%
-6.00% Mar-00
Mar-02
Mar-04
REAL GDP
Mar-06
Mar-08
PRIVATE SECTOR
Mar-10
GOVERNMENT
Past Performance Is Not Necessarily Indicative Of Future Results.
Mar-12
Mar-14
Q2 2014
11
2013 GLOBAL GDP $74 TRILLION
NAFTA $19.9T
EUROPE $18.5T
Brazil+Russia+ Argentina+Opec $8.1T
China $9.2T
Japan+South Korea+Taiwan $6.7T
Other $11.6T
Past Performance Is Not Necessarily Indicative Of Future Results.
12
EUROPE GDP GROWTH 7.5%
5.0%
2.5%
0.0%
-2.5%
-5.0%
-7.5% US
Japan
Eurozone
Q1 2014
France
Italy
Germany
Q2 2014
Past Performance Is Not Necessarily Indicative Of Future Results.
13
EUROPEAN INFLATION RATES
CURRENT MONTH % CHANGE FROM YEAR AGO 2
1.5
1
0.5
0
-0.5
-1
-1.5 February 2014 Inflation
August 2014 Inflation
Past Performance Is Not Necessarily Indicative Of Future Results.
14
CHINA GDP GROWTH
CURRENT QUARTER %CH FROM YEAR AGO 13.0
12.0
12.0
10.0
11.0
8.0
10.0
6.0
9.0
4.0
8.0
2.0
7.0
0.0
6.0 Mar-02
-2.0 Mar-03
Mar-04
Mar-05
Mar-06
Mar-07
Mar-08
REAL GDP (LHS)
Mar-09
Mar-10
Mar-11
GDP DEFLATOR (RHS)
Past Performance Is Not Necessarily Indicative Of Future Results.
Mar-12
Mar-13
Mar-14
Q2 2014 15
CHINA GDP GROWTH
CURRENT QUARTER % CH FROM PREVIOUS QUARTER SAAR 15.0
10.0
5.0
0.0
-5.0
-10.0 Mar-10
Mar-11
Mar-12 DEFLATOR
Mar-13 REAL
Past Performance Is Not Necessarily Indicative Of Future Results.
Mar-14
Q2 2014 16
CHINA RAILROAD FREIGHT VS ELECTRICITY PRODUCTION 3 MONTH AVERAGE %CH FROM YEAR AGO
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
-5.0%
-10.0% Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
RAIL
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
ELECTRICITY PRODUCTION
Past Performance Is Not Necessarily Indicative Of Future Results.
Jan-12
Jan-13
Jan-14
Jun 2014 17
CHINA EXPORTS VS IMPORTS AS A % OF GROSS DOMESTIC PRODUCT
66.0%
49.5%
33.0%
16.5%
0.0%
-16.5%
-33.0% Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
EXPORTS
Jan-08
Jan-09
Jan-10
IMPORTS
Past Performance Is Not Necessarily Indicative Of Future Results.
Jan-11
Jan-12
Jan-13
Jan-14
July 2014 18