Crystal Waters Capital uses, among many other things, the metrics below to inform our thinking on investments, the amount of cash we hold, and highlight key macro-economic themes. The indicators to the right highlight the current economic effect (i.e: economically positive, neutral or negative).
Current economic state (NEUTRAL):
The economy is still on life-support because of a forced and self-imposed shutdown but is rapidly improving as states reopen. The dashboard helps us see where various economic indicators are holding up and what the overall condition really is.
GDP is still running very negative. Retail sales growth declined significantly due to shelter-in-place policies but is in the normal range now. However, a portion of retail sales has been made up of online ordering. Consumer confidence has been negative but is back in the normal range. Business confidence was negative and is back in the normal range. We see high-yield rates as an important sign of business confidence and liquidity for the economy (The Federal Reserve announced in April plans to purchase corporate bonds which pushed the high yield HYG back into its normal range. Housing starts are picking up as are new building permits, both are being driven by low rates. Comparing the stock market valuation to the GNP, equities as a whole appear overvalued which is an improvement from the Overvalued+ state we saw in recent months. Stocks have made a significant rebound since March 23rd as investors look past the current conditions and place bets on a better future 6 to 12 months out.
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