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8 Big Numbers

Posted By Barry Ritholtz On January 11, 2008 @ 10:00 am In Data Analysis,Fixed Income/Interest Rates,Markets,Mathematics | Comments Disabled

Andrew Burkly of Brown Brothers Harriman & Co [1] puts out a list of significant numbers each January. Its a clever way to think about various aspects of the market and the economy — by the numbers.

These are his "8 Big Numbers" for 2008.

The S&P 500 Index needs to close above its March 2000 peak of 1552, as well as break its 2007 trading range of 1575 – 1370
to keep the structural bull market intact. An upside break of the range
would indicate that the volatile trading of 2007 was merely a
high-level consolidation. One indication that the bull market is back
in gear would be the number ofcommon stocks hitting net new  52-week highs climbing back into the 500 range.

Domestic equity funds witnessed outflows in 2007 totaling $54 billion suggesting that investor sentiment is far from euphoric. Finally, the average gain during year 4 of the presidential election cycle has been 8.9% since 1928.

Meanwhile in 2008, 3.6% is a key level to watch for the 10-year Treasury yield, the commodity bull market moves into its 6th year, and the S&P 500 Energy Sector looks for its fourth sector performance crown in five years – a winning percentage of .800.

1. “1552” The March 2000
peak in the S&P 500 Index
2. “1575-1370” – The 2007 trading range in the S&P 500

3. “500” The number
of stocks hitting net new 52-week highs in a healthy market
4. “-54” Outflows ($billions) from
domestic funds in 2007 (through Nov.)
5. “4 2008 is year 4 of the presidential election cycle

6. “3.6%” A significant
support level for the 10-year Treasury yield
7. “6” 2008 marks the 6th year of the commodity
bull market
8. “.800” Energy going for its fourth sector performance crown in five years

Good stuff. Thanks, Andrew . . .


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[1] Brown Brothers Harriman & Co: http://strategy.bbh.com

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