Gavekal Capital: Danish Alert

Wednesday, February 19, 2014

Danish Alert

Over the years, we have assembled a variety of indicators that help us understand movements in stock prices. One of the more unusual indicators is the relationship between the S&P 500 and Denmark consumer confidence. In 2000, Danish consumer confidence peaked in June, leading the peak in stock prices by three months. In 2006, Danish consumer confidence peaked, giving a one year forward signal of the peak in the S&P 500. In August 2010, once again, Danish consumer confidence peaked one year ahead of the intermediate decline in August-October 2011. Recently, Danish consumer confidence appears to have peaked once again. If history is any guide, and if Danish confidence stays down, this indicator represents an early warning flag for 2014 stock performance.

About Gavekal Capital

Gavekal Capital is a US registered investment advisory firm that manages the Gavekal Knowledge Leaders Strategy. Knowledge Leaders are a group of the world’s leading innovators with deep reservoirs of intangible capital. These companies often possess competitive advantages such as strong brand, proprietary knowledge or a unique distribution mechanism. Knowledge Leaders are largely service-based and advanced manufacturing businesses, often operating globally. Gavekal Capital seeks to identify the world’s leading knowledge companies through a proprietary process that analyzes corporate knowledge investments.
We offer the Gavekal Knowledge Leaders Strategy in multiple products for global investors. For more information about our product offerings please visit http://www.gavekalcapital.com.
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