7-Chart Sunday (9/12/21)

By Charlie Bilello

12 Sep 2021

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7 charts from the past week that tell an interesting story in markets and investing…

1) Solana Surge

Solana’s market cap hit $63 billion this week, which is 839x higher than where it started the year ($75 million).

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Hypothetically, if you had 1% of your portfolio in Solana and 99% in the S&P 500 at the start of the year it would now be 51% Solana and 49% S&P 500.

What would you do? I ran a poll asking this question…

2) Down 5 in a Row

The S&P 500 has fallen five consecutive days, its longest down streak since February.

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What’s notable is not the decline, but the lack of its severity (-1.73% in total over the 5 days). The S&P 500’s maximum drawdown this year is only 4.4% (closing basis), which would be the 4th lowest in history if the year ended today.

3) Rising Prices Continue

Producer prices in the US took another leg higher in August, up 8.3% over the past year.

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Aluminum prices hit their highest levels in over a decade while Natural Gas hit 7-year highs.

US consumers don’t seem to be buying the Fed’s “transitory” argument, with expectations of future inflation averaging 4.8% in the next year and 3.7% over the next three years.

4) More Jobs Than Ever Before

There are now 10.9 million job openings in the US, the highest level ever.

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Meanwhile, new unemployment claims have fallen to their lowest level since the start of the pandemic.

5) Declining Dividends

The dividend yield on the S&P 500 is has moved down to 1.28%, its lowest level in 20 years and not far from its record low of 1.10% in 2000.

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6) The Great Normalization

The Fed’s balance sheet hit another record high this week at $8.357 trillion.

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But there is growing evidence of a taper in these purchases at some point this year, with a number of Fed leaders making hawkish statements over the last month.

On the global front, many central banks have already started normalizing policy, with Brazil, Russia, Mexico, Turkey, Peru, Chile, Czech Republic, and South Korea all hiking rates this year. The ECB announced a tapering in bond buying last week, responding to their highest levels of inflation (3% YoY) in over 10 years.

7) First Signs of Delta Decline

Covid-19 hospitalizations in the US fell 4% over the last week, the first week-over-week declines we’ve seen since June.

This is due in large part to improvements in the South, which has been the region hit hardest thus far with the Delta variant. The state with the highest hospitalization rate during the current wave (Florida) is seeing a significant decline in new cases, hopefully a trend that will continue.

Source: Worldometers

And that’s it for this week. Thanks for reading.

Have a great Sunday everyone!


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