Good afternoon, and a happy Sunday to all!
The Heights We Climb
As we are reminded of the fractal nature of markets, so are we reminded of nature itself, arguably the most fractal encounter of all.
In the plains of Eastern India, the view of Nanga Parbat is nothing if not astonishing.
I’ll always come back to this photo. As tremendous as Nanga Parbat appears, it’s only from 100+ miles away that a photo of the mountain can be photographed. It’s truly expansive, and the heights near the summit are dizzying.
The mountain is truly monstrous. An anomaly. It stretches on for thousands and thousands of miles, beginning at the westernmost part of the Himalayas. As such, the nearby valley affords a view of the very “edge” of this tremendous mountain range. In the case of Nanga Parbat, we can see the “Rupal Face”, and it’s stunning rise in elevation.
Nanga Parbat rises 23,000 feet (not a typo) from its base to the summit. By comparison, Mount Everest’s vertical rise is approximately 12,000ft. Denali rises an incredible 18,000 feet, despite a much smaller elevation. (Denali is situated on a nearly flat plateau, before rising skyward and into the atmosphere. If you saw it with your own eyes, you’d need to pinch yourself. It’s that high.)
Nanga Parbat, with a summit of 26,660ft (8,126m) is one of the highest mountains on earth (only 14 are above 8,000m). While Mauna Kea, mostly underwater, has the highest “vertical rise” (distance from the base to the summit), Nanga Parbat is *above ground* (you may have already noticed this).
I’ve always been fascinated by these natural “tail events” of sorts. Whether it’s Mauna Kea, Nanga Parbat, or Denali, it’s amazing (to me) to think of the Earth being nearly flat, before “suddenly” rising to one of the highest altitudes on the planet.
Before I ramble on too long, let’s get to a proper chartpack.
A Time to Appreciate the Data/Charts
I’ve done quite a lot of writing lately, so I figured I’d take a short break and put my energy toward throwing together a nice chart pack from JPM’s Quant Econ Dashboard, alternative data sources, credit use trackers, and economic recession indicators.
I’ve always enjoyed browsing charts/data, as it makes me feel free to build my own assumptions; to do my own detective work. I hope you’ll take this opportunity to do the same.
Enjoy!
A quick review of JPM’s Quant Econ Dashboard from February 18th, 2022.
First up, the front page of JPM’s US Quant Econ Dashboard usually looks like this:
Our nowcaster's estimate of current quarter annualized GDP growth edged up to 3.95% from 3.92%.
Our tracker's estimate of the next monthly payroll gain based on alternative data edged up to 576k from 569k.
The forecast of core PCE inflation over the next 12 months was little changed at 3.24%.
Our index of common inflation expectations was little changed at 2.05%.
Chase consumer credit and debit card spending
Chase consumer credit and debit card spending by state
COVID-19 new cases per million by state
Chase consumer card spending, correlations with COVID-19 cases
COVID-19 viral load in wastewater, select cities
Looking pretty good!
High frequency alternative data
High frequency alternative data (past 12 months)
COVID-19 jobs tracker, consumption tracker, and GDP nowcasters
Job trackers based on alternative data by state
Figures are percent decline from baseline employment
Composite sentiment, payroll forecasts, and recession risk
Inflation forecasts and risk monitors
One year recession risk details
Probabilities of US recession within 1 year from financial indicators
Longer-run recession risk
And there you have it, quite a lot of data to take in. If I had to summarize everything here, I’d simply say “not much to worry about, it seems like everything will work itself out”. To quote Nick Murray, “I don’t know how things will turn out alright, I just know that they will turn out alright”.
Over nearly 25 years of investing in capital markets, this statement has always been true. No matter how bad things get, how awful things look, the situation always get better. The market always continues on to reach new heights. Despite all the upheaval for stock markets in 2022, particularly in the US, we should have faith that everything’s going to be alright.
We don’t need to know how — so long as we have faith that it will.
I’d like to wishing you and your loved ones a safe and peaceful Sunday. Thanks as always for reading, it means a lot!
—Avery
P.S. JPM is predicting 2022 to end with the SPX around 5,050.