Chart of the Day: GDP Components – Investment and Consumption
Interesting patterns in the charts of GDP components – Investment and Consumption – that may be utilized in your investment decisions.
Investment
The chart of average month-over-month investment increases for the past 60 years shows a relationship directly proportional to that of the seasonal tendencies of fixed income yields (See the Treasury Yield 30 Years (^TYX) Seasonal Chart). The increased demand for investment spending drives yields higher to a seasonal peak in May. This May peak represents the optimal time to invest in fixed income products as yields subsequently decline through to the end of the year, pushing treasury prices higher in the process.
Personal Consumption Expenditures
The chart of average month-over-month consumption increases for the past 60 years in many ways shows same peaks and troughs of that of the equity market. An increase in the rate of gains in the second and fourth quarter of the calendar year can either be deemed to be reacting or contributing to the market which seasonally find gains in the same periods.
| Sponsored By... |
|
