the laird report - march 9 2014
DESCRIPTION
A monthly summary of global economic performance including employment, trade, business conditions, leading indicators and regional data.TRANSCRIPT
....The Laird Economics Report
Mar 09, 2014
Where we are now . . . . . . . . . . . . . . . . . . . . . . . . 1
Indicators for US Economy . . . . . . . . . . . . . . . . . . . 3
Global Financial Markets . . . . . . . . . . . . . . . . . . . . 5
US Interest & Inflation Rates . . . . . . . . . . . . . . . . . 10
QE Taper Tracker . . . . . . . . . . . . . . . . . . . . . . . . . 12
Exchange Rates . . . . . . . . . . . . . . . . . . . . . . . . . . 13
US Banking Indicators . . . . . . . . . . . . . . . . . . . . . . 14
US Employment Indicators . . . . . . . . . . . . . . . . . . . 15
US Business Activity Indicators . . . . . . . . . . . . . . . . 16
US Consumption Indicators . . . . . . . . . . . . . . . . . . 17
US Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Global Business Indicators . . . . . . . . . . . . . . . . . . . 20
Canadian Indicators . . . . . . . . . . . . . . . . . . . . . . . 23
European Indicators . . . . . . . . . . . . . . . . . . . . . . . 24
Chinese Indicators . . . . . . . . . . . . . . . . . . . . . . . . 26
Global Climate Change . . . . . . . . . . . . . . . . . . . . . 27
Where we are now
The report has added a new graph showing the evolution of PMIover time and across multiple countries. It clearly shows the challengesfaced by Europe - and it’s improvements. Keep in mind that it’s im-proving from a pretty horrible place - so it’s more about whether thingsare improving, rather than saying where things actually are.
One issue I’ve been watching is the increasing corporate profits inthe US at a time when the economy in general has been so challenged.Below I show a chart showing corporate profits as a percentage of GNP.It’s pretty clear that profits relative to the size of the economy are veryhigh.
Based on a Business Insider article, I’ve also included a line show-ing the forward 4 year profit growth rate - note that it is an invertedscale, so the top of the graph means strong declines. Note that there
is a significant negative correlation between the two which seems veryominous given levels today.
Unless you think I’m claiming that earnings will collapse, I wouldquote Keynes: “Markets can remain irrational a lot longer than youand I can remain solvent.”
Formatting Notes The grey bars on the various charts are OECDrecession indicators for the respective countries. In many cases, the lastavailable value is listed, along with the median value (measured fromas much of the data series as is available).
Subscription Info For a FREE subscription to this monthly re-port, please email us at [email protected]
The Laird Report, Mar 09, 2014
24
68
1012
Corporate Profits (Black) vs. Future Profit Growth (Red)P
rofit
s (%
of G
NP
)
1945
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2010
0−
10
Ann
ualiz
ed P
rofit
Gro
wth
(+
4 yr
s)
−10 0 10 20
46
810
Corporate Profit (% of GNP) vs. +4 yr Profit Growth
Profit Growth over next 4 Years
Pro
fits
a %
of G
NP
46
810
Distribution of Profit as % of GNP
4 6 8 10
Current Profit Level
The Laird Report Mar 09, 2014 Page 2
Indicators for US Economy
Leading indicators are indicators that usually change before theeconomy as a whole changes. They are useful as short-term predictorsof the economy. Our leading indicators include the Leading Index whichsummarizes multiple indicators; initial jobless claims and hours worked(both decrease quickly when demand for employee services drops and
vice versa); purchasing manager indicies; new order and housing per-mit indicies; delivery timings (longer timings imply more demand inthe system) and consumer sentiment (how consumers are feeling abouttheir own financial situation and the economy in general).
Leading Index for the US
Inde
x: E
st. 6
mon
th g
row
th
−3
−1
12
3
median: 1.41Dec 2013: 1.65
Growth
Contraction
Initial Unemployment Claims
1000
's o
f Cla
ims
per
Wee
k
200
400
600
median: 353.62Mar 2014: 336.50
Manufacturing Ave. Weekly Hours Worked
Hou
rs
39.0
40.0
41.0
42.0
median: 40.60Feb 2014: 41.40
ISM Manufacturing: PMI Composite Index
Inde
x: S
tead
y S
tate
= 5
0
3040
5060
70 median: 53.20Feb 2014: 53.20
expanding economy
contracting economy
Manufacturers' New Orders: Durable GoodsB
illio
ns o
f Dol
lars
120
160
200
240
median: 181.72Jan 2014: 224.99
ISM Manufacturing: Supplier Deliveries
Inde
x
4050
6070
median: 51.50Feb 2014: 58.50Slower Deliveries
Faster Deliveries
Capex (ex. Defense & Planes)
Per
cent
cha
nge
(3 m
onth
s)
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
−10
−5
05
median: 0.91Jan 2014: 0.41
Chicago Fed National Activity Index
Inde
x V
alue
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
−4
−2
02
median: 0.07Jan 2014: −0.39
U. Michigan: Consumer Sentiment
Inde
x 19
66 Q
1 =
100
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
5070
9011
0
median: 88.40Feb 2014: 81.60
The Laird Report Mar 09, 2014 Page 3
Leading Indicators vs. Real GDP Growth
We can model the various leading indicators versus changes in realGDP as a way of inidicating their relationship. The plots below showthe correlations between the indicators and, using a simple linear model,the corresponding real GDP change in the next quarter consistant withthat level. The red dot shows the current predicted value. The red bar
at the bottom shows the 25%-75% confidence intervals for real GDPchange. The green lines show the regression line along with confidenceintervals. Given these are simple univariate models, these plots arebest used to estimate growth/no-growth scenarios, rather than partic-ular growth levels.
−2 −1 0 1 2 3 4
Leading Index vs Real GDP
% QoQ Change in GDP (+1Q)
Est
imat
ed G
DP
% G
row
th
−3
−2
−1
0
1
2
3 r2 : 0.56
−2 −1 0 1 2 3 4
Initial UI Claims vs Real GDP
% QoQ Change in GDP (+1Q)%
Cha
nge
in C
laim
s
−20
−10
0
10
20
30
40 r2 : 0.35
−2 −1 0 1 2 3 4
% Change in Hours Worked vs Real GDP
% QoQ Change in GDP (+1Q)
% C
hang
e in
Hou
rs
−1.0
−0.5
0.0
0.5
1.0 r2 : 0.31
−2 −1 0 1 2 3 4
PMI vs Real GDP
% QoQ Change in GDP (+1Q)
PM
I Ind
ex V
alue
30
40
50
60
70r2 : 0.26
−2 −1 0 1 2 3 4
Durable Goods Orders vs Real GDP
% QoQ Change in GDP (+1Q)
% C
hang
e in
Goo
ds O
rder
ed
−15
−10
−5
0
5r2 : 0.24
−2 −1 0 1 2 3 4
Suppliers Index vs Real GDP
% QoQ Change in GDP (+1Q)
Sup
plie
rs In
dex
−0.2
−0.1
0.0
0.1
0.2
0.3 r2 : 0.057
−2 −1 0 1 2 3 4
Capex vs Real GDP
% QoQ Change in GDP (+1Q)
% C
hang
e in
New
Ord
ers
−8
−6
−4
−2
0
2r2 : 0.19
−2 −1 0 1 2 3 4
National Activity Index vs Real GDP
% QoQ Change in GDP (+1Q)
Inde
x V
alue
−4
−3
−2
−1
0
1
2 r2 : 0.50
−2 −1 0 1 2 3 4
Consumer Sentiment vs Real GDP
% QoQ Change in GDP (+1Q)
Sen
timen
t60
70
80
90
100
110 r2 : 0.17
The Laird Report Mar 09, 2014 Page 4
Global Financial Markets
Global Stock Market Returns
Country Index Name Close Date CurrentValue
WeeklyChange
MonthlyChange
3 monthChange
YearlyChange
Corr toS&P500
Corr toTSX
North AmericaUSA S&P 500 Mar 07 1878.0 1.0% s 4.5% s 3.9% s 21.6% s 1.00 0.77USA NASDAQ Composite Mar 07 4336.2 0.7% s 5.1% s 6.6% s 34.2% s 0.93 0.71USA Wilshire 5000 Total Market Mar 07 20154.9 1.0% s 5.0% s 4.9% s 23.5% s 0.99 0.76Canada S&P TSX Mar 07 14299.1 0.6% s 3.7% s 7.4% s 11.5% s 0.77 1.00Europe and RussiaFrance CAC 40 Mar 07 4366.4 -0.9% t 3.3% s 5.6% s 15.1% s 0.58 0.57Germany DAX Mar 07 9350.8 -3.5% t 0.5% s 1.7% s 17.8% s 0.58 0.54United Kingdom FTSE Mar 07 6712.7 -1.4% t 2.1% s 2.3% s 4.2% s 0.54 0.56Russia Market Vectors Russia ETF Mar 07 23.1 -5.5% t -11.1% t -16.1% t -18.4% t 0.69 0.52All Europe Euro Stoxx 50 Mar 06 3144.5 3.0% s 4.4% s 5.5% s 17.3% s 0.65 0.63AsiaTaiwan TSEC weighted index Mar 07 8714.0 1.3% s 3.9% s 3.2% s 9.5% s -0.07 0.03China Shanghai Composite Index Mar 07 2057.9 0.1% s 0.7% s -8.1% t -11.5% t -0.14 -0.03Japan NIKKEI 225 Mar 07 15274.1 2.9% s 5.6% s -2.4% t 27.6% s 0.13 0.18Hong Kong Hang Seng Mar 07 22660.5 -0.8% t 4.7% s -4.8% t -0.5% t 0.10 0.24Korea Kospi Mar 07 1974.7 -0.3% t 2.7% s -1.3% t -1.5% t 0.15 0.23South Asia and AustrailiaIndia Bombay Stock Exchange Mar 07 21919.8 3.8% s 7.6% s 2.8% s 12.9% s 0.18 0.20India S&P CNX NIFTY Mar 07 6526.6 4.0% s 7.6% s 2.6% s 14.1% s 0.18 0.21Indonesia Jakarta Mar 07 4685.9 1.4% s 4.9% s 11.2% s -3.3% t -0.05 0.26Malaysia FTSE Bursa Malaysia KLCI Mar 07 1832.3 -0.2% t 1.3% s -0.5% t 11.0% s 0.12 0.16Australia All Ordinaries Mar 07 5477.0 1.1% s 5.6% s 6.4% s 6.9% s 0.05 0.20New Zealand NZX 50 Index Gross Mar 07 5125.6 2.7% s 5.9% s 8.6% s 18.3% s 0.03 0.14South AmericaBrasil IBOVESPA Mar 07 46244.0 -1.8% t -3.8% t -9.6% t -21.4% t 0.42 0.33Argentina MERVAL Buenos Aires Mar 07 5880.8 1.7% s 5.3% s 10.2% s 76.7% s 0.21 0.26Mexico Bolsa index Mar 07 1878.0 1.0% s 4.5% s 3.9% s 21.6% s 1.00 0.77MENA and AfricaEgypt Market Vectors Egypt ETF Mar 07 67.3 -1.2% t 8.1% s 25.9% s 45.9% s 0.26 0.26
Market Vectors Gulf States ETF Mar 07 29.9 -1.1% t 2.6% s 14.6% s 39.6% s 0.36 0.33South Africa iShares MSCI South Africa Index Mar 07 64.5 3.7% s 10.6% s 3.9% s 1.6% s 0.73 0.60
Market Vectors Africa ETF Mar 07 31.5 0.5% s 3.9% s 4.6% s 6.1% s 0.70 0.64CommoditiesUSD Spot Oil West Texas Int. Mar 03 $105.3 2.1% s 9.2% s 9.9% s 16.9% s 0.32 0.27USD Gold LME Spot Mar 07 $1348.2 1.5% s 7.0% s 9.7% s -14.7% t -0.12 -0.10
Note: Correlations are based on daily arithmetic returns for the most recent 100 trading days.
The Laird Report Mar 09, 2014 Page 5
S&P 500 Composite Index
The S&P 500 Composite Index is widely regarded as the best singlegauge of the large cap U.S. equities market. A key figure is the valua-tion level of the S&P500 as measured by the Price/Earnings ratio. Wepresent two versions: (1) a 12-month trailing earnings version which
reflects current earnings but is skewed by short term variances and (2)a cyclically adjusted version which looks at the inflation adjusted earn-ings over a 10 year period (i.e. at least one business cycle). Forecastedearnings numbers are estimates provided by S&P.
S&P 500 Stock Price Index (USD$ Inflation Adjusted to current prices − Log Scale)
63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
100
200350500750
100013001750
100
200350500750100013001750
S&P Quarterly Earnings (USD$ Inflation Adjusted to current prices)
63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
−5.00 0.00 5.0010.0015.0020.0025.0030.0035.0040.00
−5.00 0.00 5.0010.0015.0020.0025.0030.0035.0040.00
Tech BubbleJapanese Asset Bubble
House BubbleAsian Financial Crisis
US Financial Crisis
Eurozone crisis
Oil Crisis I Oil Crisis II
Gulf WarSavings and Loans Crisis
High Inflation Period
Afganistan/Iraq WarVietnam War
Reported EarningsOperating Earnings
Trailing P/E Ratios for S&P500
63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
010
2030
4050
010
2030
4050
12−month P/E ( median = 17.4, Mar = 17.7)10−year CAPE ( median = 19.4, Mar = 24.3)
The Laird Report Mar 09, 2014 Page 6
S&P 500 Composite Distributions
This is a view of the price performance of the S&P 500 index com-panies. The area of each box is proportional to the company’s marketcap, while the colour is determined by the percentage change in price
over the past month. In addition, companies are sorted according totheir industry group.
AAPL6.4%
GOOG7.2%
MSFT4.7%
IBM9.1%
FB14%
ORCL8.3%
V5.9%
QCOM
INTC3.9%
CSCO
MA
EBAY
HPQ EMC
ACN
TXN
YHOO
ADP
CRM
ADBE
CTSH
MU
FIS
BRK−A11%
WFC8.7%
JPM9.4%
BAC6.1%
C7.1%
AXP
GS USB
AIG MS
MET
BLK
SPG
PNC
COF
PRU BEN
ACE
AMT
AFL
TRV
STT
PSA
MMC
AON
CME
ALL
ICE
CB
L
IVZ
XL
JNJ8.3%
PFE6.9%
MRK
GILD BMY
ABBV BIIB UNH
LLY
ABT
MDT
TMO
AGN ACT
BAX
ALXN
WLP FRX CI
AZTS
DVA
AMZN7.5%
DIS17%
HD9.9%
MCD3.5%
NKE F
GM
TJX DTV
CBS JCI
VFC M
LB
GE8.2%
UTX
BA5%
UPS5.7%
MMM
UNP
CAT
GD ITW
DE
TYC
WM
PH
IR
WMT2.6%
PG3.5%
KO
PM6.6%
PEP4.5%
CVS
MO
WAG
MDLZ
CL
COST
KMB
GIS
RAI
ADM
EL
KR K
XOM6.2%
CVX4.5%
SLB8.3%
COP
OXY
EOG
HAL
APC
NOV
KMI
APA
VLO
PXD
SE
HP
DD
MON
DOW
LYB
PX
PPG
APDIP
CF
AA
DUK
NEE
D
SO
ED FE
NI
VZ1.6%
T1.8%
Information Technology
Financials
Health Care
Consumer Discretionary
Industrials Consumer Staples
EnergyMaterials Utilities
TelecommunicationsServices
<−25.0% −20.0% −15.0% −10.0% −5.0% 0.0% 5.0% 10.0% 15.0% 20.0% >25.0%
% Change in Price from Feb 01, 2014 to Mar 07, 2014
Average Median Median MedianSector Change P/Sales P/Book P/EMaterials 11.4% s 1.5 3.5 22.7Consumer Discretionary 10.7% s 1.6 4.3 19.9Financials 9.1% s 3.0 1.5 18.2Industrials 9.0% s 1.6 3.2 21.1Health Care 8.8% s 3.3 3.7 24.5
Average Median Median MedianSector Change P/Sales P/Book P/EInformation Technology 7.7% s 3.2 4.0 24.0Energy 7.5% s 2.0 1.6 17.2Consumer Staples 6.7% s 1.8 4.7 19.6Utilities 3.0% s 1.3 1.5 17.9Telecommunications Services 2.9% s 1.2 2.7 20.4
The Laird Report Mar 09, 2014 Page 7
US Equity Valuations
A key valuation metric is Tobin’s q: the ratio between the marketvalue of the entire US stock market versus US net assets at replacementcost (ie. what you pay versus what you get). Warren Buffet famouslyfollows stock market value as a percentage of GNP, which is highly(93%) correlated to Tobin’s q.
We can also take the reverse approach: assume the market hasvaluations correct, we can determine the required returns of future es-
timated earnings. These are quoted for both debt (using BAA ratedsecurities as a proxy) and equity premiums above the risk free rate (10year US Treasuries). These figures are alternate approaches to under-standing the current market sentiment - higher premiums indicate ademand for greater returns for the same price and show the level ofrisk-aversion in the market.
Tobin's q (Market Equity / Market Net Worth) and S&P500 Price/Sales
63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
0.25
0.50
0.75
1.00
1.25
1.50
0.25
0.50
0.75
1.00
1.25
1.50
Buying assets at a discount
Paying up for growth
Tobin Q (median = 0.75, Dec = 1.07)S&P 500 Price/Sales (median = 1.40, Sep = 1.51)
Equity and Debt Risk Premiums: Spread vs. Risk Free Rate (10−year US Treasury)
63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
0%
2%
4%
6%
8%
10%
12%
0%
2%
4%
6%
8%
10%
12%Implied Equity Premium (median = 4.2%, Feb = 5.5%)Debt (BAA) Premium (median = 2.0%, Feb = 2.4%)
The Laird Report Mar 09, 2014 Page 8
US Mutual Fund Flows
Fund flows describe the net investments in equity and bond mutualfunds in the US market, as described in ICI’s “Trends in Mutual FundInvesting” report. Note however that this is only part of the story as
it does not include ETF fund flows - part of the changes are investorsentering or leaving the market, and part is investors shifting to ETF’sfrom mutual funds.
US Net New Investment Cash Flow to Mutual Funds
US
$ bi
llion
s (m
onth
ly)
2007 2008 2009 2010 2011 2012 2013 2014
−40
−20
020
40
Domestic EquityWorld EquityTaxable BondsMunicipal Bonds
US Net New Investment Cash Flow to Mutual Funds
US
$ bi
llion
s (M
onth
ly)
2007 2008 2009 2010 2011 2012 2013 2014
−60
−40
−20
020
4060
Flows to EquityFlows to BondsNet Market Flows
The Laird Report Mar 09, 2014 Page 9
US Interest & Inflation Rates
Yield Curve - US Treasuries
US Treasury Yield Curves
For
war
d O
vern
ight
Rat
es (
%)
13 14 15 16 17 18 19 20 21 22 23 24
0.0
0.5
1.0
1.5
2.0
2.5 06 Mar 14 ( Today )
06 Feb 14 ( 1 mo ago )06 Dec 13 ( 3 mo ago )06 Mar 13 ( 1 yr ago )
3 Month & 10 Yr Treasury Yields
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
0%
1%
2%
3%
4%
5%
6%
7% 10 Yr Treasury3 Mo TreasurySpread
US Inflation measures
84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
−1%
0%
1%
2%
3%
4%
5%
6%
−1%
0%
1%
2%
3%
4%
5%
6%
US Inflation Rate YoY% (Jan = 1.0%)US Inflation ex Food & Energy YoY% (Jan = 1.4%)Delta of Treasury vs. TIPS (Mar = 2.2%)
The Laird Report Mar 09, 2014 Page 10
AAA vs. BAA Corporate Bond Spreads
4%
5%
6%
7%
8%
9%
4%
5%
6%
7%
8%
9%
Per
cent
AAA BAA
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
median: 91.00Feb 2014: 69.00
0
100
200
300
0
100
200
300
Spr
ead
(bps
)
TED Spread (LIBOR vs. Fedfunds Rate)
0%
1%
2%
3%
4%
5%
6%
7%
0%
1%
2%
3%
4%
5%
6%
7%
Per
cent
3 mos t−bill LIBOR
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
median: 37.28Feb 2014: 18.56
0
100
200
300
0
100
200
300
Spr
ead
(bps
)
The Laird Report Mar 09, 2014 Page 11
QE Taper Tracker
The US has been using the program of Quantitative Easing to pro-vide monetary stimulous to its economy. The Fed has engaged in aseries of programs (QE1, QE2 & QE3) designed to drive down longterm rates and improve liquidity though purchases of treasuries, mor-gage backed securites and other debt from banks.
The higher demand for long maturity securities would drive up theirprice, but as these securities have a fixed coupon, their yield would bedecreased (yield ≈ coupon / price) thus driving down long term rates.
In 2011-2012, “Operation Twist” attempted to reduce rates without
increasing liquidity. They went back to QE in 2013.The Fed chairman suggested in June 2013 the economy was recover-
ing enough that they could start slowing down purchases (“tapering”).The Fed backed off after a brief market panic. The Fed announced inDec 2013 that it was starting the taper, a decision partly driven byseeing key targets of inflation around 2% and unemployment being lessthan 6.5%. These charts track that progress. Note - in the US Bankingcharts, repos have spiked recently - not sure what that means.
QE Asset Purchases to Date (Treasury & Mortgage Backed Securities)
Trill
ions
0.0
1.0
2.0
0.0
1.0
2.0QE1 QE2 Operation Twist QE3Treasuries
Mortgage Backed Securities
Total Monthly Asset Purchases (Treasury + Mortgage Backed Securities)
Bill
ions
−10
00
100
−10
00
100
Month to date Mar 05: $10.2
Inflation and Unemployment − Relative to Targets
Per
cent
02
46
8
02
46
8
Target Unemployment 6.5%Target Inflation 2%
U.S. 10 Year and 3 Month Treasury Constant Maturity Yields
Per
cent
02
4
02
4
2008 2009 2010 2011 2012 2013
Short Term Rates:Once at zero, Fed moved to QE
Long Term Rates:Moving up in anticipation of Taper?
The Laird Report Mar 09, 2014 Page 12
Exchange Rates
10 Week Moving Average CAD Exchange Rates
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
0.62
0.71
0.81
0.90
1.00
1.09
US
A /
CA
D
0.55
0.61
0.66
0.72
0.77
0.82
Eur
o / C
AD
59.
16 7
4.71
90.
2610
5.81
121.
3613
6.91
Japa
n / C
AD
0.38
0.44
0.49
0.55
0.61
0.67
U.K
. / C
AD
0.59
0.98
1.36
1.74
2.12
2.51
Bra
zil /
CA
D
CAD Appreciating
CAD Depreciating
1 Month Change in Rates versus Average
−3.0%
−1.5%
1.5%
3.0%
Euro−1.1%
UK−2.0%
Japan−3.9%
South Korea 0.1%
China 0.6%
India−1.2%
Brazil−2.1%
Mexico 0.0%
Canada 3.2%
USA 0.9%
% Change over 3 months vs. Canada
<−10.0% −8.0% −6.0% −4.0% −2.0% 0.0% 2.0% 4.0% 6.0% 8.0% >10.0%
CAD depreciatingCAD appreciating
ARG−18.4%
AUS 3.8%
BRA 3.5%
CHN 4.0%
IND 4.0%
RUS −5.8%
USA 4.2%
EUR5.5%
JPY3.9%
KRW3.5%
MXN2.2%
ZAR0.1%
The Laird Report Mar 09, 2014 Page 13
US Banking Indicators
The banking and finance industry is a key indicator of the healthof the US economy. It provides crucial liquidity to the economy in theform of credit, and the breakdown of that system is one of the exac-erbating factors of the 2008 recession. Key figures to track are the
Net Interest Margins which determine profitability (ie. the differencebetween what a bank pays to depositors versus what the bank is paidby creditors), along with levels of non-performing loans (i.e. loan lossreserves and actual deliquency rates).
US Banks Net Interest Margin
Per
cent
3.5
4.0
4.5
median: 3.952013 Q4: 3.21
Repos Outstanding with Fed. Reserve
Bill
ions
of D
olla
rs
5015
025
0
median: 43.10Mar 2014: 172.73
Bank ROE − Assets between $300M−$1B
Per
cent
05
1015
median: 12.882013 Q4: 9.11
Consumer Credit Outstanding
% Y
early
Cha
nge
−5
05
1015
20
median: 7.08Jan 2014: 5.02
Total Business Loans%
Yea
rly C
hang
e
−20
010
20median: 7.81Jan 2014: 6.65
US Nonperforming Loans
Per
cent
12
34
5
median: 2.352013 Q4: 2.68
St. Louis Fed Financial Stress Index
Inde
x
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
02
46 median: −0.16
Feb 2014: −1.04
Commercial Paper Outstanding
Trill
ions
of D
olla
rs
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
1.0
1.4
1.8
2.2
median: 1.36Mar 2014: 1.03
Residential Morgage Delinquency Rate
Per
cent
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
24
68
10
median: 2.302013 Q4: 8.21
The Laird Report Mar 09, 2014 Page 14
US Employment Indicators
Unemployment Rate
Per
cent
45
67
89
10 median: 5.70Feb 2014: 6.70
Ave. Duration of Unemployment
Wee
ks
1520
2530
3540 median: 17.45
Feb 2014: 37.10
Index: Employment, Hours
Inde
x
−1.
5−
0.5
0.5
1.5
median: 0.00Jan 2014: 0.13above ave growth
below ave growth
Total Nonfarm Hires
Rat
e
3.0
3.5
4.0
median: 3.60Dec 2013: 3.20
Services: Temp Help
Tho
usan
ds o
f Per
sons
1500
2000
2500
median: 2221.70Feb 2014: 2800.30
Employment Ratio
Per
cent
6065
7075
8085
All civilianBachelor Degree 25+Aged 25−54Some college 25+
(U6) Unemployed + PT + Marginally Attached
Per
cent
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
810
1214
16
median: 9.60Feb 2014: 12.60
4−week moving average of Initial Claims
Jan
1995
= 1
00
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
5010
015
020
0
median: 108.72Mar 2014: 103.46
Small, Med, Lrg Nonfarm Emp (ADP)
Jan
2005
= 1
00
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
8090
100
110
120
Firm Size
1−4950−499500+
The Laird Report Mar 09, 2014 Page 15
US Business Activity Indicators
Business activity is split between manufacturing activity and non-manufacturing activity. We are focusing on forward looking business
indicators like new order and inventory levels to give a sense of thecurrent business environment.
Manufacturing Sector: Real Output
YoY
Per
cent
Cha
nge
−15
−5
515
median: 6.672013 Q4: 9.59
ISM Manufacturing: PMI Composite Index
Inde
x
3040
5060
70
Feb 2014: 53.20
manufac. expanding
manufac. contracting
ISM Manufacturing: New Orders Index
Inde
x
3040
5060
7080 Feb 2014: 54.50
Increase in new orders
Decrease in new orders
Non−Manufac. New Orders: Capital Goods
Bill
ions
of D
olla
rs
3545
5565
median: 56.97Jan 2014: 68.74
Average Weekly Hours: Manufacturing
Hou
rs
3940
4142
43
median: 41.10Feb 2014: 41.40
Industrial Production: Manufacturing
YoY
Per
cent
Cha
nge
−15
−5
05
10
median: 3.27Jan 2014: 1.51
Total Business: Inventories to Sales Ratio
Rat
io
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
1.1
1.2
1.3
1.4
1.5
1.6
median: 1.37Dec 2013: 1.30
Chicago Fed: Sales, Orders & Inventory
Inde
x
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
−0.
50.
00.
5 Jan 2014: 0.02Above ave growth
Below ave growth
ISM Non−Manufacturing Bus. Activity Index
Inde
x
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
3545
5565
Feb 2014: 54.60
Growth
Contraction
The Laird Report Mar 09, 2014 Page 16
US Consumption Indicators
Variations in consumer activity are a leading indicator of thestrength of the economy. We track consumer sentiment (their expec-
tations about the future), consumer loan activity (indicator of newpurchase activity), and new orders and sales of consumer goods.
U. Michigan: Consumer Sentiment
Inde
x 19
66 Q
1 =
100
5060
7080
9011
0
median: 88.40Feb 2014: 81.60
Consumer Loans (All banks)
YoY
% C
hang
e
010
2030
median: 7.14Jan 2014: 1.99
AccountingChange
Deliquency Rate on Consumer Loans
Per
cent
2.5
3.0
3.5
4.0
4.5 median: 3.49
2013 Q4: 2.39
New Orders: Durable Consumer Goods
YoY
% C
hang
e
−30
−10
1030
median: 3.83Jan 2014: −1.97
New Orders: Non−durable Consumer Goods
YoY
% C
hang
e
−20
010
20
median: 3.94Jan 2014: −2.24
Personal Consumption & Housing Index
Inde
x
−0.
40.
00.
2
median: 0.02Jan 2014: −0.18above ave growth
below ave growth
Light Cars and Trucks Sales
Mill
ions
of U
nits
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
1012
1416
1820
22
median: 14.71Feb 2014: 15.28
Personal Saving Rate
Per
cent
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
24
68
10
median: 5.50Jan 2014: 4.30
Real Retail and Food Services Sales
YoY
% C
hang
e
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
−10
−5
05
median: 2.49Jan 2014: 0.97
The Laird Report Mar 09, 2014 Page 17
US Housing
Housing construction is only about 5-8% of the US economy, how-ever a house is typically the largest asset owned by a household. Sincepersonal consumption is about 70% of the US economy and house val-ues directly impact household wealth, housing is an important indicatorin the health of the overall economy. In particular, housing investment
was an important driver of the economy getting out of the last fewrecessions (though not this one so far). Here we track housing pricesand especially indicators which show the current state of the housingmarket.
20 City Housing Prices: 1991 − present
Atlanta
Boston
Charlotte
Chicago Cleveland
Dallas
Denver
Detroit
Las Vegas
Los Angeles
Miami
Minneapolis
New York
Phoenix
Portland
San Diego
San Francisco
Seattle
Tampa
WASHINGTON
Lowest value (1991−)
Highest value (1991−)
Current Value (Dec 2013)
Bubble Peak (Jan 2007)
New Housing Units Permits Authorized
Mill
ions
of U
nits
0.5
1.0
1.5
2.0
2.5
median: 1.36Jan 2014: 0.94
New Home Median Sale Price
Sal
e P
rice
$000
's
100
150
200
250
Jan 2014: 260.10
15 20 25 30 35
150
200
250
300
Disposable Income Per Capita (000's)
New
Hom
e P
rice
(000
's)
(Real) Personal Income vs. Housing Prices
Jan 2014
r2 : 88.9%Range: Jan 1963 − Jan 2014
New Homes: Median Months on the Market
Mon
ths
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
46
810
1214 median: 5.00
Jan 2014: 3.30
US Monthly Supply of Homes
Mon
ths
Sup
ply
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
46
810
12 median: 6.00Jan 2014: 4.70
The Laird Report Mar 09, 2014 Page 18
US Housing - FHFA Quarterly Index
The Federal Housing Finance Agency provides a quarterly surveyon house prices, based on sales prices and appraisal data. This gener-ates a housing index for 355 municipal areas in the US from 1979 topresent. We have provided an alternative view of this data looking atthe change in prices from the peak in the 2007 time frame.
The goal is to provide a sense of where the housing markets are
weak versus strong.The colours represent gain or losses since the startof the housing crisis (defined as the maximum price between 2007-2009for each city). The circled dots are the cities in the survey, while thebackground colours are interpolated from these points using a loesssmoother.
Change from 2007 Peak − Q4 2013
−50%
−40%
−30%
−20%
−10%
0%
10%
20%
30%
40%
50%
Today's Home Prices
Percentage Change from 2007−2009 Peak
Fre
quen
cy
−75% −50% −25% 0% 25% 50% 75%
Year over Year Change − Q4 2013
−10%
−8%
−6%
−4%
−2%
0%
2%
4%
6%
8%
10%
YoY Change in this quarter
YoY Percent Change
Fre
quen
cy
−15% −5% 5% 15%
The Laird Report Mar 09, 2014 Page 19
Global Business Indicators
Global PMI Reports
The Purchasing Managers’ Index (PMI) is an indicator reflectingpurchasing managers’ acquisition of goods and services. An index read-ing of 50.0 means that business conditions are unchanged, a numberover 50.0 indicates an improvement while anything below 50.0 suggests
a decline. The further away from 50.0 the index is, the stronger thechange over the month. The chart at the bottom shows a moving av-erage of a number of PMI’s, along with standard deviation bands toshow a global average.
Global PMI − February 2014
<40.0 42.0 44.0 46.0 48.0 50.0 52.0 54.0 56.0 58.0 >60.0
Steady ExpandingContracting
Eurozone53.2
Global PMI53.3
TWN54.7MEX
52.0
KOR49.8
JPN55.5
VNM51.0
IDN50.5
ZAF51.5
AUS48.6
BRA50.4
CAN52.9
CHN48.5
IND52.5
RUS48.5
SAU58.6
USA57.1
Global PMI Monthly Change
<−5.0 −4.0 −3.0 −2.0 −1.0 0.0 1.0 2.0 3.0 4.0 >5.0
PMI Change ImprovingDeteriorating
Eurozone−0.8
Global PMI0.3
TWN−0.8MEX
−2.0
KOR−1.1
JPN−1.1
VNM−1.1
IDN−0.5
ZAF1.2
AUS 1.9
BRA−0.4
CAN 1.2
CHN−1.0
IND 1.1
RUS 0.5
SAU−1.1
USA 3.4
Purchase Managers Index (Manufacturing) − China, Japan, USA, Canada, France, Germany, Italy, UK, Australia
04 05 06 07 08 09 10 11 12 13 14
3040
5060
70
3040
5060
70
Business Conditions Contracting
Business Conditions Expanding
The Laird Report Mar 09, 2014 Page 20
Global PMI Chart
This is an alternate view of the global PMI reports. Here, we lookat all the various PMI data series in a single chart and watch theirevolution over time.
Red numbers indicate contraction (as estimated by PMI) whilegreen numbers indicate expansion.
Feb
12
Mar
12
Apr
12
May
12
Jun
12
Jul 1
2
Aug
12
Sep
12
Oct
12
Nov
12
Dec
12
Jan
13
Feb
13
Mar
13
Apr
13
May
13
Jun
13
Jul 1
3
Aug
13
Sep
13
Oct
13
Nov
13
Dec
13
Jan
14
Feb
14
Australia
India
Indonesia
Vietnam
Taiwan
China
Korea
Japan
South Africa
Saudi Arabia
Turkey
Russia
United Kingdom
Greece
Germany
France
Italy
Czech Republic
Spain
Poland
Ireland
Netherlands
Eurozone
Brazil
Mexico
Canada
United States
Global PMI 51.2 51.6 51.3 50.3 49.7 48.8 48.7 48.7 48.9 49.6 50.0 51.5 50.9 51.2 50.4 50.6 50.6 50.8 51.6 51.8 52.1 53.1 53.3 53.0 53.3
51.9 53.3 54.1 52.5 52.5 51.4 51.5 51.1 51.0 52.8 56.1 55.8 54.3 54.6 52.1 52.3 52.0 53.7 53.1 52.8 51.8 54.7 55.0 53.7 57.1
51.8 52.4 53.3 54.7 54.8 53.1 53.0 52.4 51.4 50.4 50.4 50.5 51.7 49.3 50.1 53.2 52.4 52.0 52.1 54.2 55.6 55.3 53.5 51.7 52.9
53.7 53.8 56.3 55.2 55.9 55.2 55.1 54.4 55.5 55.6 57.1 55.0 53.4 52.2 51.7 51.7 51.3 49.7 50.8 50.0 50.2 51.9 52.6 54.0 52.0
51.4 51.1 49.3 49.3 48.5 48.7 49.3 49.8 50.2 52.2 51.1 53.2 52.5 51.8 50.8 50.4 50.4 48.5 49.4 49.9 50.2 49.7 50.5 50.8 50.4
49.0 47.7 45.9 45.1 45.1 46.5 46.3 46.1 45.4 46.8 46.1 47.9 47.9 46.8 46.7 48.3 48.8 50.3 51.4 51.1 51.3 51.6 52.7 54.0 53.2
49.0 47.6 48.9 48.9 49.7 50.7 48.9 48.2 49.6 50.2 49.0 48.0 48.2 48.7 48.8 50.8 53.5 55.8 54.4 56.8 57.0 54.8 55.2
49.7 51.5 50.1 51.2 53.1 53.9 50.9 51.8 52.1 52.4 51.4 50.3 51.5 48.6 48.0 49.7 50.3 51.0 52.0 52.7 54.9 52.4 53.5 52.8 52.9
49.2 48.9 48.0 49.7 48.3 47.0 47.3 48.2 48.5 48.6 48.9 48.0 46.9 48.0 49.3 51.1 52.6 53.1 53.4 54.4 53.2 55.4 55.9
45.0 44.5 43.5 42.0 41.1 42.3 44.0 44.5 43.5 45.3 44.6 46.1 46.8 44.2 44.7 48.1 50.0 49.8 51.1 50.7 50.9 48.6 50.8 52.2 52.5
49.7 47.6 49.4 49.5 48.7 48.0 47.2 48.2 46.0 48.3 49.9 49.1 49.5 50.1 51.0 52.0 53.9 53.4 54.5 55.4 54.7 55.9 56.5
47.8 47.9 43.8 44.8 44.6 44.3 43.6 45.7 45.5 45.1 46.7 47.8 45.8 44.5 45.5 47.3 49.1 50.4 51.3 50.8 50.7 51.4 53.3 53.1 52.3
50.0 46.7 46.9 44.7 45.2 43.4 46.0 42.7 43.7 44.5 44.6 42.9 43.9 44.0 44.4 46.4 48.4 49.7 49.7 49.8 49.1 48.4 47.0 49.3 49.7
50.2 48.4 46.2 45.2 45.0 43.0 44.7 47.4 46.0 46.8 46.0 49.8 50.3 49.0 48.1 49.4 48.6 50.7 51.8 51.1 51.7 52.7 54.3 56.5 54.8
37.7 41.3 40.7 43.1 40.1 41.9 42.1 42.2 41.0 41.8 41.4 41.7 43.0 42.1 45.0 45.3 45.4 47.0 48.7 47.5 47.3 49.2 49.6 51.2 51.3
51.5 51.9 50.2 45.9 48.4 45.2 49.6 48.1 47.3 49.2 51.2 50.5 47.9 48.6 50.2 51.3 52.9 54.8 57.2 56.3 56.5 58.4 57.3 56.7 56.9
50.7 50.8 52.9 53.2 51.0 52.0 51.0 52.4 52.9 52.3 50.0 52.0 52.0 50.8 50.6 50.4 51.7 49.2 49.4 49.4 51.8 49.4 48.8 48.0 48.5
52.3 50.2 51.4 49.4 50.0 52.2 52.5 51.6 53.1 54.0 53.5 52.3 51.3 51.1 51.2 49.8 50.9 54.0 53.3 55.0 53.5 52.7 53.4
59.8 57.0 58.9 58.1 58.5 58.9 58.0 57.3 56.6 56.6 57.5 58.7 56.7 57.1 58.7 59.7 58.6
47.1 49.5 47.4 49.1 53.6 49.3 50.5 50.4 51.6 52.2 56.5 49.1 51.5 51.6 50.5 50.3 51.5
50.5 51.1 50.7 50.7 49.9 47.9 47.7 48.0 46.9 46.5 45.0 47.7 48.5 50.4 51.1 51.5 52.3 50.7 52.2 52.5 54.2 55.1 55.2 56.6 55.5
50.7 52.0 51.9 51.0 47.2 49.4 47.5 45.7 47.4 48.2 50.1 49.9 50.9 52.0 52.6 51.1 49.4 47.2 47.5 49.7 50.2 50.4 50.8 50.9 49.8
51.0 53.1 53.3 50.4 50.2 50.1 49.2 49.8 50.2 50.6 51.5 50.4 50.4 51.6 50.4 49.2 48.2 47.7 50.1 50.2 50.9 50.8 50.5 49.5 48.5
52.7 54.1 51.2 50.5 49.2 47.5 46.1 45.6 47.8 47.4 50.6 51.5 50.2 51.2 50.7 47.1 49.5 48.6 50.0 52.0 53.0 53.4 55.2 55.5 54.7
49.5 48.3 46.6 43.6 47.9 49.2 48.7 50.5 49.3 50.1 48.3 50.8 51.0 48.8 46.4 48.5 49.4 51.5 51.5 50.3 51.8 52.1 51.0
50.6 50.8 50.5 48.1 50.2 51.4 51.6 50.5 51.9 51.5 50.7 49.7 50.5 51.3 51.7 51.6 51.0 50.7 48.5 50.2 50.9 50.3 50.9 51.0 50.5
56.6 54.7 54.9 54.8 55.0 52.9 52.8 52.8 52.9 53.7 54.7 53.2 54.2 52.0 51.0 50.1 50.3 50.1 48.5 49.6 49.6 51.3 50.7 51.4 52.5
51.3 49.5 43.9 42.4 47.2 40.3 45.3 44.1 45.2 44.3 44.3 40.2 45.6 44.4 36.7 43.8 49.6 42.0 46.4 51.7 53.2 47.7 47.6 46.7 48.6
The Laird Report Mar 09, 2014 Page 21
Global Trade Indicators
The BDI is often described as a leading indicator of economic ac-tivity; it’s offered as evidence that global manufacturers are re-stockingon material inventories. However, the BDI is highly volatile, and de-pendent on the available shipping capacity as well as demand. If thereare 50 ships and only enough bulk cargoes to fill 49 of them, shippingrates can fall by 20%. If 51 cargoes are competing for the same ships,rates can rise 20%. So a 4% change in demand can cause a 40% change
in shipping costs.While the BDI measures bulk cargo transport - ore, crude oil, coal,
grain, etc. HARPEX measures container transport - electronics fromTaiwan, toys from China, textiles from Italy, etc. The HARPEX is agood indicator of global consumer activity and in a high value-addedconversion economy like the US, it is a critical indicator.
Global Shipping Indices
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
2000
6000
1000
0
Bal
tic S
hipp
ing
Inde
x
400
600
800
HA
RP
EX
Inde
x
Shipping Demand Exceeds SupplyShipping Supply Exceeds Demand
Germany − Exports
YoY
% C
hang
e
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
−40
−20
020
40
median: 7.492013 Q3: −1.10
South Korea − Exports
YoY
% C
hang
e
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
−40
−20
020
40
median: 16.772013 Q3: −0.34
Japan − Exports
YoY
% C
hang
e
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
−40
−20
020
40
median: 4.632013 Q3: 14.72
The Laird Report Mar 09, 2014 Page 22
Canadian Indicators
Unemployment rate
Per
cent
67
89
1011 median: 7.40
Feb 2014: 7.00
Permits issued for Dwelling
YoY
Per
cent
Cha
nge
−50
050
100
Feb 2014: NA
Retail Sales
YoY
Per
cent
Cha
nge
−5
05
10
median: 4.29Dec 2013: 2.43
Inflation rate
YoY
Per
cent
Cha
nge
in C
PI
−1
01
23
45
median: 1.68Jan 2014: 0.33
Consumer Confidence
6070
8090
100
median: 94.50Feb 2014: 85.70
Housing Prices
YoY
Per
cent
Cha
nge
−5
05
1015 median: 1.86
Dec 2013: 1.19
Money Supply (M2)
YoY
Per
cent
Cha
nge
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
05
1015 median: 5.88
Jan 2014: 7.12
PMI: Manufacturing
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
4050
6070
median: 56.65Feb 2014: 52.90
Retail Sales Performance
YoY
Per
cent
Cha
nge
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
−5
05
10
median: 4.29Dec 2013: 2.43
The Laird Report Mar 09, 2014 Page 23
European Indicators
Unemployment Rates
Per
cent
age
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
05
1015
20
Business Employment Expectations
Inde
x
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
−40
−20
010
Volume of Retail Sales (ex−cars)
Inde
x (J
an 2
010
= 1
00)
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
6070
8090
110
130
Manufacturing Turnover
Inde
x (J
an 2
010
= 1
00)
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
6070
8090
110
130
Building Permits
Inde
x (J
an 2
010
= 1
00)
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
010
020
030
040
050
0
Industrial Orderbook Levels
Inde
x
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
−60
−40
−20
020
Country EmploymentExpecta-
tions
Unempl.(%)
Bond Yields(%)
RetailTurnover
ManufacturingTurnover
BuildingPermits
IndustryOrderbook
PMI
Series Dates Jan 2014 Dec 2013 Jan 2014 Dec 2013 Dec 2013 Dec 2013 Jan 2014 Feb 2014� France -14.3 10.8 2.33 103.5 109.4 77.44 -20.6 49.7� Germany 1.5 5.1 1.8 99 111.9 131.21 -9.3 54.8� United Kingdom 12.1 7.2 2.5 103.99 102.39 NA 3.1 56.9� Italy -8.4 12.7 4.11 92.27 98.66 NA -26.9 52.3� Greece -7.3 27.8 8.66 73.77 98.72 17.9 -32 51.3� Spain -3.3 25.8 4.13 79.7 99.99 47.07 -16.4 52.5� Eurozone -2 10.7 3.02 97.68 109.11 NA -15.2 NA
The Laird Report Mar 09, 2014 Page 24
Government Bond YieldsLo
ng T
erm
Yie
lds
%
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
02
46
810
Economic Sentiment
Inde
x
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
6070
8090
110
130
Consumer Confidence
Inde
x
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
−10
0−
60−
200
20Production of Total Industry: Dec 2013
<−10.0%−7.5%−5.0%−2.5% 0.0% 2.5% 5.0% 7.5%>10.0%
YoY % Difference increasingdecreasing
AUT−0.3%
DEU 4.8%
ESP NA%
FIN−5.3%
FRA 1.7%
GBR 1.8%
GRC NA%
HUN 5.8%
IRL 4.1%
ITA 0.8%
NOR NA%
POL 4.4%
RUS NA%
SWE−3.0%
Inflation: Dec 2013
AUT 1.9%
DEU 1.4%
ESP 0.3%
FIN NA%
FRA 0.7%
GBR 2.0%
GRC−1.7%
HUN 0.4%
IRL 0.2%
ITA 0.7%
NOR 2.0%
POL 0.7%
SWE 0.1%
<−1.0%0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% >7.0%
YoY % Change in Prices
PMI: February 2014
<40.042.0 44.0 46.0 48.0 50.0 52.0 54.0 56.0 58.0>60.0
Steady ExpandingContracting
BRA50.4
CAN52.9
DEU54.8
ESP52.5
FRA49.7
GBR56.9
GRC51.3
IRL52.9
ITA52.3
MEX52.0
POL55.9
SAU58.6
TUR53.4
USA57.1
PMI Change: Jan − Feb
<−5.0−4.0 −3.0 −2.0 −1.0 0.0 1.0 2.0 3.0 4.0 >5.0
PMI Change ImprovingDeteriorating
CAN 1.2
DEU−1.7
ESP 0.3
FRA 0.4
GBR 0.2
GRC 0.1
IRL 0.1
ITA−0.8
POL 0.5
TUR 0.7
USA 3.4
The Laird Report Mar 09, 2014 Page 25
Chinese Indicators
Tracking the Chinese economy is a tricky. As reported in the Finan-cial Times, Premier Li Keqiang, confided to US officials in 2007 thatgross domestic product was “man made” and “for reference only”. In-stead, he suggested that it was much more useful to focus on three alter-native indicators: electricity consumption, rail cargo volumes and bank
lending (still tracking down that last one). We also include the PMI- which is an official version put out by the Chinese government anddiffers slightly from an HSBC version. Finally we include the ShanghaiComposite Index as a measure of stock performance.
Manufacturing PMI
99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
4045
5055
60
Feb 2014: 48.50
Shanghai Composite Index
Inde
x V
alue
(M
onth
ly H
igh/
Low
)
99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
1000
2000
3000
4000
5000
6000
Mar 2014: 2056.30
Electricity Usage
100
Mill
ion
KW
H (
log
scal
e)
99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
1000
2000
3000
5000
Dec 2013: 4780.00
Consumer Confidence Index
Inde
x
99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
9810
010
210
410
610
8
median: 102.60Jan 2014: 101.10
Exports
YoY
Per
cent
Cha
nge
99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
−20
020
4060
80
median: 20.20Jan 2014: 10.55
Retail Sales Change
YoY
Per
cent
Cha
nge
99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14
1015
20
median: 13.20Dec 2013: 13.60
The Laird Report Mar 09, 2014 Page 26
Global Climate Change
Temperature and precipitation data are taken from the US NationalClimatic Data Center and presented as the average monthly anomalyfor the previous 6 months from January 2014. Anomalies are defined
as the difference from the average value over the period from 1961-1990for precipitation and 1971-2000 for temperature.
Trailing 6 month Temperature Anomalies from January 2014
<−4.0 −3.0 −2.0 −1.0 0.0 1.0 2.0 3.0 >4.0
Anomalies in Celcius WarmerCooler Anomalies in Celcius
−4 −2 0 2 4
Trailing 6 month Precipitation Anomalies from January 2014
<−40.0 −30.0 −20.0 −10.0 0.0 10.0 20.0 30.0 >40.0
Anomalies in millimeters WetterDrier Anomalies in millimeters
−40 −20 0 20 40
The Laird Report Mar 09, 2014 Page 27