The charts that matter: the global growth jitters

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If you missed any of this week’s Money Mornings, here are the links you need.

MondayAmid talk of “super-spikes” and shortages – are we near peak oil bullishness?

TuesdayIgnore the political noise over Brexit – this is just business as usual

WednesdayBritain must stop flipping housing ministers

ThursdayThe global trade war is escalating fast

FridayGet ready for a US “wage explosion”

A new podcast is coming on Monday – if you haven’t listened to the most recent one, you’ll find it here.

Now over to this week’s charts.

Gold has been struggling again this week. It’s all about the stronger US dollar, as we discuss below.

Gold price chart

(Gold: three months)

The US dollar index – a measure of the strength of the dollar against a basket of the currencies of its major trading partners – continues to be strong. The currency perked up this week as solid US inflation data kept the prospect of interest rate rises firmly on the table.

US dollar price chart

(DXY: three months)

The yield on the ten-year US Treasury bond was again, virtually unchanged this week.

US treasuries price chart

(Ten-year US Treasury: three months)

The yield on the ten-year German bund (the borrowing cost of Germany’s government, which is Europe’s “risk-free” rate) remained around the 0.3% mark as investors fret over everything from trade war to slowing eurozone growth.

German bunds price chart

(Ten-year bund yield: three months)

Copper just kept on sliding. The main driver of the collapse in copper appears to be concerns over Chinese growth – and not just because of concerns over trade wars. China is also trying to crack down on the massive levels of debt in its economy. That’s a good thing, but it’s hard to do without denting demand and squeezing growth. I guess that’s what happens when your economy becomes addicted to debt.

Copper price chart

(Copper: three months)

Bitcoin appears to have found a level that it’s comfortable at for now. The cryptocurrency appears to do well at points when investors are keen to shift money out of China. In other words, it’s a great mechanism for facilitating capital flight. Which, when you think about it, could be very useful in our de-globalising world and one in which various trade barriers are being thrown up across the board.

Bitcoin price chart

(Bitcoin: three months)

On US employment, the four-week moving average of weekly US jobless claims fell slightly to 223,000 this week, while weekly claims fell to 214,000. David Rosenberg of Gluskin Sheff notes that, in the past, when US jobless claims hit a “cyclical trough” (as measured by the four-week moving average), then a stockmarket peak is not far behind (on average 14 weeks), and a recession follows about a year later.

We hit a new trough – of 213,500 – about two months ago, so if there’s anything to Rosenberg’s observations (which are of course drawn from a limited pool of past cycles), then we should see the stock market hit new highs before this cycle is out.

And of course, at this rate, we could well see a fresh trough in the near future, although the labour market is so squeezed now that this may be a stretch.

US jobless claims chart

(US jobless claims, four-week moving average: since January 2016)

The oil price (as measured by Brent crude, the international/European benchmark) took a big hit this week as fears about the impact of trade tensions on global growth picked up.

Oil price chart

(Brent crude oil: three months)

Another stunning week for Amazon. The stock hit new highs this week, partly helped by excitement in the run-up to “Prime day”, which is its big annual sale. Whatever you think of the giant disruptor – and lots of us work in industries that Amazon has upturned, so I’m sure many have mixed feelings about it – it’s an incredible company.

Still too expensive for my tastes though.

Amazon share price chart

(Amazon: three months)

Electric car group Tesla had an unusually calm week share-price wise. This week, founder Elon Musk got in a strop about newspapers calling him a billionaire, even although he is – well – a billionaire. To be fair, a lot of these guys get annoyed if you underestimate their net wealth (which is usually a sure sign that they’ve got a lot less money than anyone thinks), so at least it’s different.

Tesla share price chart

(Tesla: three months)