Logo Background RSS


What is SPX Fair Value?.

  • Written by Syndicated Publisher 408 Comments408 Comments Comments
    August 15, 2011

    Credit and commodity markets are saying one thing while equities are saying another and only time will tell which market(s) were right. History though is clearly on the side of credit and commodities based on prior recessions including the 2008 “not so great” recession where equities peaked just two months before the NBER declared the first month of contraction.

    On Friday I asked the question what is SPX fair value based on the current and future economic realities. The answer is really one of equilibrium where free markets are given the time to find a price that balances buyers and sellers. Since historically commodities and credit markets have shown to be more forward looking and have had time to find this “equilibrium” below are four charts that show where they view current SPX fair value.


    30 Year Treasury Yield

    SPX fair value based on historical correlations is 1,000-1,050

    Copper Commercial Net Positions

    SPX fair value based on historical correlations is 1,100-1,150.

    Friday’s COT report showed a massive change in commercial net positions implying copper is poised to move much lower in short order while technically copper looks very weak.


    5 Year Interest Rate Swaps

    SPX fair value based on historical correlations is 700-800.

    Aaa Corporate Bond Yields

    SPX fair valued based on historical correlations is 800-900.


    Shared Under Licence From

    What Is SPX Fair Value- Macro Story.

    Images: Flickr (licence details)


    About the Author

    Macro Story is designed as a one stop source for all of your macro related news and data.  From credit markets to economic data to geopolitics, you will find it all in a simple and organized fashion.  Content is presented in a format that allows you to read as little or as much as prefered.  Whether your goal is to do advanced research, a simple market overview or to become educated on macro subjects, the site has been designed with you in mind.

    Below are a few highlights to help you get started.

    “Macro View,” updated weekly is an in depth review of current macro news & data and future trends.

    Five key market indicators are updated daily on the home page with an expanded view.  Indicators include the S&P 500, 10 Year Treasury, US Dollar, Copper and Oil.

    All economic data including historical charts are located under “Macro Data.”  No need to search multiple sources to find what you need.  It’s all here.

    An expanded education section and glossary of terms to increase your knowledge base.

    Search content by key words, date or subject title.