A different set of charts

Over the years, we’ve built a massive inventory of charts, models, and indicators to help us develop our capital markets strategy — our macro-economic indicators, valuation, inflation, and currency models to name a few. And we’re always on the look-out for new ones that we can learn from.

More recently, some of these charts are coming from non-traditional sources. Or rather, there are some new and better ways to look at things. I’ve put together a few of these non-traditional charts that we’ve been paying attention to over the last while and will be watching for signs of economic recovery.

Chart 1 — Google trends for “Buy Stocks”

Recently, I’ve taken to Google trends to get a sense of investor behavior. Below, you see the trend for “Buy Stocks” before March as the dotted line plotted against the S&P 500 Index year-over-year (YOY) return each week. Prior to this past March, the search for “Buy Stocks” reached its peak alongside strong market performance. However, when we factor in March data (the solid blue line), the search for “Buy Stocks” far surpasses prior history. It would suggest that retail investors were particularly interested in buying the market dip, and perhaps that it’s been the retail investors who’ve driven the market higher.

Did investors perfectly time the bottom? I’m not so sure. We saw a similar spike in October 2008. The final bottom in March 2009 drew a little more than half the interest in buying stocks. And interest in stocks at the December 2018 low was less than the top of the market in September. But it does show that investors do recognize a buying opportunity when there is one … sometimes.

This chart shows the trends in Google search popularity of “buy stocks” compared to the yearly percentage change of the S&P 500 Index, from 2015 to 2020.

Chart 2 — Google mobility trends for Georgia

All eyes are on Georgia, as it was one of the first states to open up, to see what the potential risk of a second wave of COVID-19 may be and how quickly it returns to normal. I love these mobility charts! They measure mobility by Google Map search activity.

What we can glean from this is that visits to grocery stores, parks, and friends and family (residential) are at or above pre-pandemic levels, while commerce (retail, transit, and workplace) is still well below. The positive is that retail is slowing coming back. While we expect continued improvement in retail as consumer sentiment is repaired, we think that this will be a slower recovery than what the market believes.

This chart shows the percentage change in mobility trends for the state of Georgia in the U.S as compared to a baseline, from February to May 2020. The trends include retail and recreation, grocery and pharmacy, parks, transit stations, workplaces, and residential.

Chart 3 — Swiss watch exports have plummeted

Swiss watch exports have been a decent confirmation of U.S. GDP growth. Swiss watch exports are down 81% YOY for the month of April. The month-to-month data can be volatile, so we smooth it out with a six-month moving average. It denotes a sharp drop in U.S. GDP for Q2 (to no one’s surprise). What’s interesting today is that exports have been impacted by both supply and demand as many manufacturers have been shut down since March and shoppers for a Swiss watch in this environment are few and far between. We’ll be watching this data over the coming months for a gauge of consumer behavior and its recovery.

Here’s a chart that compares yearly Swiss watch exports, from 2000 to 2019, to the U.S. GDP for each of those years.

Chart 4 — Macao, the gambling ghost town

China has been the centre of the COVID-19 pandemic. Macao, a special administrative region of China, is a popular destination for Asian tourists. Hotel occupancy in Macao is 12% for the month of April. Occupancy has plunged since the outbreak and has yet to recover. This is another stat we’ll be watching for how economies are opening up and when consumers start embracing travel again. For the time being, it would confirm our view that the global economy will face a slower recovery — more like the Nike swoosh than a “V.”

Here’s a chart of hotel occupancy numbers in Macao from May 2015 to April 2020. The chart shows a sharp drop in the number of hotel occupants in January 2020 and that trend continues into April.

Chart 5 — Airport security traffic

If you are flying anytime soon, I’ve heard that it’s relatively easy. Air travel is 12% of what it was, as measured by TSA Checkpoint Traveler Throughput. While passenger traffic has more than doubled since the April 2020 low, it’s still well off what it was just three months ago. This is another one to watch as an indicator that consumer sentiment is improving. There are a lot of questions around the future of air travel that remain unanswered. We can’t overlook the importance of tourism to the global economy and as such will be watching air travel closely.

This chart shows the number of passengers that passed through U.S. Transport Security Administration checkpoints from March 2020 through May 2020. The chart begins at its highest point — about 2,250,000 passengers in March 2020. There’s a steady decrease in numbers in early to mid-March and a sharp drop to below 200,000 from mid to late March. The number of passengers has stayed in a low range — between about 100,000 to 350,000 — since then.

Philip Petursson, CIM
Chief Investment Strategist and Head of Capital Markets Research

Kevin Headland, CIM
Senior Investment Strategist

Macan Nia, CFA
Senior Investment Strategist

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Philip Petursson

Philip Petursson, 

Chief Investment Strategist and Head of Capital Markets Research

Manulife Investment Management

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Kevin Headland

Kevin Headland, 

Senior Investment Strategist

Manulife Investment Management

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Macan Nia

Macan Nia, 

Senior Investment Strategist

Manulife Investment Management

Read bio