Asset Class Performance Comparison as Indicators of Economic Expectations

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Data as of 4/4/25 and standardized to Z-Score.

4/4/25 MAGA Man Tariff blood bath leads to S&P500 tanking 5.97%. But financial markets are not just about equities (stock market). Other asset classes are: Bonds (Debt), Currency, Commodities, Real Estate and Gold (a Commodity with special properties). We leave out Crypto currencies for now. 
Comparing the recent performance of the different asset classes can provide a more unbiased insight of what's ahead.
The tracking ETFs used for the chart above are (ticker symbols provided):
  • AGG#iShares Core US Aggregate Bond ETF 
  • DBC#Invesco DB Commodity Index Tracking Fund 
  • GLD#SPDR Gold Shares 
  • SPY#SPDR S&P 500 ETF Trust 
  • UUP#Invesco DB US Dollar Index Bullish Fund 
  • VNQ#Vanguard Real Estate Index Fund ETF 
ETFs may not track the underlying asset class with 100% accuracy but it's good enough for our purpose when data for specialised asset class Indices are not readily availabable or free of charge.
Below, is the  performance comparison of the various asset classes and their use as Indicators of deflationary/recessionary or inflationary conditions. With reference to the chart above:
  • Gold (Dark Green): Strong uptrend: A flight to safety in uncertain times and a hedge against Inflation.
  • Commodities:(Orange): Down: Indicator of economic slowdown since Commodities are direct tangible inputs to output of the economy. 
  • Bonds [Debt] (Dark Blue): Uptrend: During deflationary times, interest rates fall which means bond prices are up. Bonds are also a flight to safety asset class. However US Treasuries are not the risk-free instruments they once were when you take into account the USA's 36 trillion dollars debt-and growing by the day. Its only because  the USD is the dominant reserve currency and currency for international trade that US has this unfair privilege 
  • US Dollar (Purple): Down, down, down as a macrotrend for foreseable future. Many countries e.g. China, Saudi Arabia, Brazil and other BRIC countries are lessening their dependence on the USD. The worth of a country's currency is a long-term Indicator of the country's economic strength. The GBP was S$7.00 to 1 GBP when the British Empire was still a shining star in the 1950s. And the SGD was S$3.60 to USD1.00 just a few decades ago. 
  • Equities (Light Blue): S&P500 down is an Indicator of loss of confidence in the US economy. An Indicator of deflationary times ahead for the USA as well as the World in general because of the size of the US economy.
  • Real Estate (Light Green) : Also down. Real Estate is a long-term less-liquid asset class. It would be the last to reverse if there is an upturn.
Conclusion: Every asset class is down with the exception of Gold and Bonds. There will be a short period of interest rate rises as worldwide Tariffs by the MAGA Man leads to price rises and inflation, followed by a recession or at least a deflationary situation. But Asia, intra-ASEAN trade, the pull of economic giants China and India may mitigate the impact. 
 For Singaporeans what is safe? Your CPF and money market funds of Singapore Government short-term debt denominated in SGD. 




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