Gavekal Capital: Boom-Bust Barometer Hasn't Confirmed S&P500 New Highs

Thursday, March 6, 2014

Boom-Bust Barometer Hasn't Confirmed S&P500 New Highs

The boom-bust barometer, which compares commodity prices to unemployment claims as gauge for economic activity, has had a strong correlation to the S&P 500 over the past 10 years. However, the boom-bust barometer has not confirmed the new highs made by the equity markets so far this year. The barometer has remained below the high it made in September while the equity market has continued to rally higher. We saw a similar configuration in 2011-2012 but it will be interesting to see if the barometer can break out to new highs once again.

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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