Chicago PMI... New Order Bounceback
Posted on Wednesday, September 30, 2009
| Leave a Comment
The September Chicago PMI was much weaker than expected and back below 50 at 46.1. Expectations were 52 vs 50 in August.
Maybe call it the Clunker hangover as New Orders fell 6 points to 46.3, a 3 month low and Order Backlogs fell 9 points to 36.7. Employment was little changed at 38.8. Inventories got a lift, rising 11.4 points to 38.9 and it's the highest since Nov '08 likely following an increase in auto production where plants went back online in July.
Bottom line, manufacturing will be a key contributor to the Q3 GDP rebound with the question always being sustainability but with final demand still sluggish, there is only so much of an improvement that we will see and today's number highlights that risk.
Source: News.Briefing
--
Source: http://econompicdata.blogspot.com/2009/09/chicago-pmi-new-order-bounceback.html
~
Manage subscription | Powered by rssforward.com
Full Circle... Treasuries vs. High Yield
Last week EconomPic recapped the amazing returns high yield bonds have posted to date in 2009 after a tumultuous 2008. Below is a chart of that performance on a monthly basis vs. treasuries.
So, where does that leave high yield and treasury investors cumulatively from the beginning of 2008?
Unbelievably in exactly the same place.
Source: Barclays High Yield / Barclays Treasury Indices
--
Source: http://econompicdata.blogspot.com/2009/09/full-circle-treasuries-vs-high-yield.html
~
Manage subscription | Powered by rssforward.com
Japanese Industrial Production
Bloomberg details:
Japanese manufacturers increased production for a sixth month in August, capping the longest stretch of gains in 12 years, as emergency spending by governments worldwide rekindled global trade.
Factory output rose 1.8 percent last month after climbing 2.1 percent in July, the Trade Ministry said today in Tokyo. Economists surveyed by Bloomberg forecast a 1.8 percent gain.
Output has rebounded since a record collapse in the first quarter of the year left half the nation's factory capacity sitting idle. The gains in production since March have yet to generate employment, trigger capital investment or return companies like Toyota Motor Corp. to profit.
"We're not going to fall back into recession, but these production increases don't bring us back to where we started," said Yoshiki Shinke, senior economist at Dai-Ichi Life Research Institute in Tokyo. "You've still got a lot of excess capacity."
The good... industrial production is up 21% from its lows. The bad... it is still 24% below its peak.
Source: Meti.GO
--
Source: http://econompicdata.blogspot.com/2009/09/japanese-industrial-production.html
~
Manage subscription | Powered by rssforward.com
Consumer Confidence Trends Down
Details of this morning's release (traveling) per Money.CNN:
The Conference Board, a New York-based business research group, said its Consumer Confidence Index fell to 53.1 in September from an upwardly revised 54.5 in August.
Economists were expecting a reading of 57, according to a Briefing.com consensus survey.
"Consumers remain quite apprehensive about the short-term outlook and their incomes," said Lynn Franco, director of the Conference Board Consumer Research Center. "With the holiday season quickly approaching, this is not very encouraging news."
The index component that measures consumers' assessment of the present situation fell to 22.7 from 25.4. The expectation index, which gauges consumers' outlook over the next few months, dropped to 73.3 from 73.8 last month.
Source: Consumer Board
--
Source: http://econompicdata.blogspot.com/2009/09/consumer-confidence-trends-down.html
~
Manage subscription | Powered by rssforward.com
Chicago Fed National Activity Index Pointing to More Muddle
Posted on Tuesday, September 29, 2009
| Leave a Comment
Modern Distribution Management with the nice recap of yesterday's release (traveling all week so expect some untimely posts):
The Chicago Fed National Activity Index was -0.90 in August, down from -0.56 in July. Three of the four broad categories of indicators made negative contributions to the CFNAI in August; the production and income category made a positive contribution to the index for the second consecutive month.
The three-month moving average, CFNAI-MA3, improved for the seventh consecutive month. At -1.09 in August (up from -1.61 in the previous month), the CFNAI-MA3 suggests that growth in national economic activity was below its historical trend. With regard to inflation, the amount of economic slack reflected in the CFNAI-MA3 indicates low inflationary pressure from economic activity over the coming year.
The production-related indicators made a smaller positive contribution of 0.29 to the index in August compared with 0.45 in July. Industrial production increased 0.8 percent in August, down slightly from 1.0 percent in the previous month; and manufacturing production increased 0.6 percent in August after rising 1.4 percent in July. July and August marked the first consecutive increases in industrial production since November and December 2007.
For more on the linkage between the rolling three-month figure and GDP go here.
Source: Chicago Fed
--
Source: http://econompicdata.blogspot.com/2009/09/chicago-fed-national-activity-index.html
~
Manage subscription | Powered by rssforward.com
Home Prices Stabilizing
Bloomberg details:
Home values in 20 U.S. metropolitan areas declined less than forecast in the year ended in July, a sign the housing slump that led to the worst recession in seven decades is abating.
The S&P/Case-Shiller home-price index fell 13.3 percent in July from a year earlier, the smallest drop in 17 months, the group said today in New York. Adjusted for seasonal variations, the gauge rose 1.2 percent from the prior month.
Foreclosure-driven price declines, low borrowing costs and government tax credits for first-time buyers have lifted home sales for much of this year, helping to slow the decline in prices.
Stability in real-estate values and rising stock prices may help set the stage for a recovery in the consumer spending that accounts for two thirds of the economy.
--
Source: http://econompicdata.blogspot.com/2009/09/home-prices-stabilizing.html
~
Manage subscription | Powered by rssforward.com
Have We Learned Anything?
Lots of interesting information in the Office of the Comptroller of the Currency's Quarterly Report on Bank Trading and Derivatives Activities for the Second Quarter of 2009. Regarding Derivatives... risk is highly concentrated and banks are making a lot of money from them. In other words, not much has changed.
Most derivatives activity in the U.S. banking system continues to be dominated by a small group of large financial institutions. Five large commercial banks represent 97% of the total banking industry notional amounts and 88% of industry net current credit exposure.The top five exposures (in order) are held at JP Morgan, Goldman Sachs, Bank of America, Citibank, and Wells Fargo. Looking at Table 4, we can compare the credit equivalent exposure of those banks' derivatives (equal to the netted current credit exposure and potential future exposure of those contracts) to the risk based capital of those banks (tier one plus tier two capital).
After the financial system blew up the global economy, the key question is why isn't the use and concentration by these large banks being reduced (we know how well the banks' controls worked out last year)?
I think this quote from Satyajit Das (hat tip Paul Kedrosky) sums it up nicely:
Warren Buffet once described bankers in the following terms: "Wall Street never voluntarily abandons a highly profitable field. Years ago… a fellow down on Wall Street…was talking about the evils of drugs…he ranted on for 15 or 20 minutes to a small crowd…then…he said: "Do you have any questions?" One bright investment banking type said to him: "yeah, who makes the needles?Source: Treasury
Derivatives and debt are the needles of finance and bankers will continue to supply them to all the Dr. Jekyll's and Mr. Hyde's alike for the foreseeable future as long as there is a buck to be made in the trade.
--
Source: http://econompicdata.blogspot.com/2009/09/have-we-learned-anything.html
~
Manage subscription | Powered by rssforward.com
Deflationary Spiral in Japan?
Posted on Monday, September 28, 2009
| Leave a Comment
Bloomberg reports:
Japan's consumer prices fell at a record pace in August, heightening the risk that prolonged deflation may hamper the country's recovery from its deepest postwar recession.
Prices excluding fresh food slid 2.4 percent from a year earlier, topping the previous month's 2.2 percent decline, the statistics bureau said today in Tokyo. The drop matched the median estimate of 28 economists surveyed by Bloomberg News.
Companies from Fast Retailing Co. to Sony Corp. are lowering prices to attract consumers who face record unemployment and plunging wages. A return to deflation that the economy only shook off in 2005 may weigh on growth as consumers and companies cut back spending in anticipation that prices will keep falling.
"We'll soon start to see that there isn't enough domestic demand to push up wages," said Kyohei Morita, chief economist at Barclays Capital in Tokyo. "As households' spending power falls, there's concern that this deflation will lead to further deflation -- in other words, that we'll enter into a deflationary spiral."
Source: Stat.Go.JP
--
Source: http://econompicdata.blogspot.com/2009/09/deflationary-spiral-in-japan.html
~
Manage subscription | Powered by rssforward.com
Dow Breakdown
Performance of the 30 companies that made up the Dow at the beginning of 2009.
Winners?
Financials not starting with "Citi" / technology
Losers?
Financials starting with "Citi", bankrupt autos, energy, and non-cyclicals that didn't sell off as much in 2008 (i.e. Verizon, McDonalds, Walmart)
Source: Dogs of the Dow
--
Source: http://econompicdata.blogspot.com/2009/09/dow-breakdown.html
~
Manage subscription | Powered by rssforward.com
Emerging Market Bonds Roar
Last week we took a look at the stunning rally in corporate bonds. Now lets take a look at Emerging Market bonds. FT Alphaville reports the large flows coming into the asset class:
Investors poured $727m into emerging market bond funds during the week to September 23, the equivalent of 1.3 per cent of these funds' total assets and the highest inflow since February 2006, EPFR data show.These flows have resulted in spreads coming in by more than 400 bps since the end of the year, propelling the asset class up more than 30% year to date.
Global and US bond funds posted their biggest inflows since early 2001, when EPFR first started tracking them.
Funds dedicated to emerging market equities attracted $2.1bn, a 39-week high, which brought the tally for 2009 to $18.2bn. Funds targeted at investments in Europe, the Middle East and Africa attracted $208m; LatAm funds drew $241m and funds targeted at Asia (excluding Japan) attracted $427m.
Source: Barclays
--
Source: http://econompicdata.blogspot.com/2009/09/emerging-market-bonds-roar.html
~
Manage subscription | Powered by rssforward.com
Lions Winning Streak at One
Posted on Sunday, September 27, 2009
| Leave a Comment
ESPN details:
Matthew Stafford held his head down on the bench for the final snap.
Dominic Raiola couldn't watch, either, fearing a 20th loss in a row and 100th setback of his nine-season career.
When Detroit's leaders looked up and saw Washington was out of time, they saw what they were hoping to see Sunday.
Lions 19, Redskins 14.
Believe it.
Finally.
"We not only got the monkey off our back, we got King Kong off our back," said Lions owner William Clay Ford. "I'm hoping that this gets us over that hump and gives us a winning attitude."
Detroit (1-2) hadn't won since Dec. 23, 2007 and its 19-game skid matched the second longest in NFL history. The Lions no longer have to hear about Tampa Bay's record 26-game losing streak.
Source: Football.About
--
Source: http://econompicdata.blogspot.com/2009/09/lions-winning-streak-at-one.html
~
Manage subscription | Powered by rssforward.com
New Home Sales Skew to Low-End
Bloomberg detail:
Below is a chart showing how the new home market has dramatically shifted to the lower end market (or is it just that the values have shifted there due to lack of demand?).Sales increased 0.7 percent to a 429,000 annual pace, less than anticipated, figures from the Commerce Department showed today in Washington. The worst
housing slump since the Great Depression may be drawing to a close as first-time buyers rush to take advantage of tax credits before a November deadline. Federal Reserve policy makers this week pledged to keep borrowing costs low to sustain the recovery past the time when the government stimulus measures wane."At least we continue to see an upward trend in place," said Ellen Zentner, a senior economist at Bank of Tokyo- Mitsubishi UFJ Ltd. in New York. "New-home sales are battling existing-home sale prices, which are incredibly attractive with the foreclosure pricing."
Source: Census
--
Source: http://econompicdata.blogspot.com/2009/09/new-home-sales-skew-to-low-end.html
~
Manage subscription | Powered by rssforward.com
Banker Pay Limits on the Way?
Posted on Thursday, September 24, 2009
| Leave a Comment
Bloomberg details:
World leaders are poised to crack down on banker pay and better coordinate economic policies as they seek to temper the excesses that helped trigger the worst financial crisis since the Great Depression.For those newer to EconomPic, let me dust off the old Investment Banking Bonus Matrix to show everyone how things currently work in the banking world.
President Barack Obama and other Group of 20 leaders meeting in Pittsburgh are uniting behind a plan to force banks to tie compensation more closely to risk and tighten capital requirements, U.S. officials said.
"There will be broad agreement around many elements of a compensation package," Michael Froman, Obama's liaison to the G-20, told Bloomberg Television today.
As for the new limits... I will believe it when I see it.
Source: EconomPic
--
Source: http://econompicdata.blogspot.com/2009/09/banker-pay-limits-on-way.html
~
Manage subscription | Powered by rssforward.com
GDP Growth by Metro Area (2008)
BEA details:
What isn't mentioned is the horrendous turn of events for those metro areas within Indiana, devestated by the downturn in the RV business.In 2008, real GDP by metropolitan area declined in 111 of the 366 MSAs. Many metropolitan areas in the Sun Belt, which had previously experienced large growth in the housing market, were adversely affected by protracted housing declines. Much of the decline in the housing-related industries (construction and finance and insurance) can be attributed to metropolitan areas in Arizona, California, Florida, and Nevada.
In contrast, growth accelerated in 146 metropolitan areas, most notably in areas where natural resources and mining industries are concentrated such as Casper, WY and Grand Junction, CO. Grand Junction had the fastest real GDP growth (12.3 percent) of any metropolitan area in 2008 due largely to growth in natural resources and mining. The professional and business services industry group also showed strong growth in 2008, contributing the most to real GDP growth in 112 metropolitan areas.
Source: BEA
--
Source: http://econompicdata.blogspot.com/2009/09/gdp-growth-by-metro-area-2008.html
~
Manage subscription | Powered by rssforward.com
Corporate Bonds: From Cheap to Rich
In March I loaded up on both investment grade and high yield bonds (see Are Corporate Bonds a Screaming Buy?) as a long term investment (the key I thought was long term).
Yet by July, I was already beginning to cash out of the positions as I thought they had rebounded too far, too fast. 5% more gains for the investment grade and 20% for the high yield universes gets us to a point where bonds went from CHEAP to what now seems RICH in just about 6 months (especially as compared to equities). Bloomberg details:
Stocks offer greater value than bonds and are poised to "catch up" with a rally in corporate debt, according to Rod Smyth, chief investment strategist at Riverfront Investment Group LLC.It hasn't only been the BBB corporate bonds (detailed above) that have soared in recent months. Year to date BBB's are up more than 20%, but high yield corporate bonds are now up almost 50%.
The CHART OF THE DAY shows that the difference in yield between corporates and 10-year Treasury notes has narrowed more quickly than the Standard & Poor's 500 Index has risen since March. The yield comparison is based on a Moody's Investors Service index of Baa-rated debt. Smyth and colleagues Bill Ryder and Ken Liu had a similar chart in a report yesterday.
Since December, the yield gap has fallen to 2.9 percentage points from a peak of 6.2 points, according to data compiled by Bloomberg. This spread is near its lowest level since January 2008, when the S&P 500 was about 22 percent higher.
"'Animal spirits' are returning to Wall Street even if they are still suppressed on Main Street," the report said. Spreads have narrowed so much that stocks have more room to rise than bonds, especially as earnings increase, it added.
Smyth isn't the only strategist whose focus has shifted to shares. "Equities no longer look expensive relative to corporate bonds," Andrew Garthwaite, a global strategist at Credit Suisse AG, wrote in a Sept. 18 report. He downgraded credit, or bonds, based on relative value.
Source: Barclays
--
Source: http://econompicdata.blogspot.com/2009/09/corporate-bonds-from-rich-to-expensive.html
~
Manage subscription | Powered by rssforward.com
En-Down-Ments
NY Times details:
Steep investment losses have caused painful cutbacks at some of the nation's best-known universities over the most recent fiscal year and have prompted questions about whether their endowments are taking too much risk.Mebane Faber (of World Beta) sums it up best, by not saying much at all:
But as the schools, one by one, disclose their numbers, the managers of these endowments are indicating their continued support for a diversified portfolio chock full of alternative investments like hedge funds, private equity and real estate — the very things that have caused so much trouble.
This portfolio strategy is sometimes called the Swensen model, after David F. Swensen, who heads the Yale endowment. On Tuesday, Yale disclosed the details of its year, reporting an investment loss of 24.6 percent, compared with an average drop of 17.2 percent for large funds, according to the Wilshire Trust Universe Comparison Service.
Draw your own conclusions on endowment performance last year, fiscal year ending June 30th. Below are facts.Here are those facts in chart form...
Source: World Beta
--
Source: http://econompicdata.blogspot.com/2009/09/en-down-ments.html
~
Manage subscription | Powered by rssforward.com
Crude Inventories Up, Price Down
Posted on Wednesday, September 23, 2009
| Leave a Comment
WSJ details:
Crude oil futures prices sold off sharply early Wednesday, dropping below $69 a barrel after U.S. weekly data showed rising inventories and a sharp drop in demand.
Light, sweet crude oil for November delivery had been down about $1.25 a barrel ahead of the data release Wednesday, under pressure from strength in the dollar.But crude dropped swiftly through the $70 and $69 levels after the Energy Information Administration reported a 2.8-million-barrel rise in crude oil inventories for the week ended Sept. 18. Analysts surveyed by Dow Jones Newswires had expected crude stocks to drop by 1.5 million barrels.
And the important of stocks and the price...
Source: EIA
--
Source: http://econompicdata.blogspot.com/2009/09/crude-inventories-up-price-down.html
~
Manage subscription | Powered by rssforward.com
Staycation Phenomenon
Wikipedia details the staycation phenomenon:
A staycation (also spelled stay-cation, stacation, or staykation) is a neologism for a period of time in which an individual or family stays at home and relaxes at home or takes day trips from their home to area attractions. Staycations have achieved high popularity in the US during the financial crisis of 2007–2009 in which unemployment levels and gas prices are high. Staycations also became a popular phenomenon in the UK in 2009 as a weak pound made overseas holidays significantly more expensive.
The term was added to the 2009 version of the Merriam-Webster's Collegiate Dictionary.
And here is is in chart form...
Source: BEA
--
Source: http://econompicdata.blogspot.com/2009/09/staycation-phenomenon.html
~
Manage subscription | Powered by rssforward.com
FHFA Home Price Index
Missed this yesterday. Peter Boockvar (via The Big Picture) details (bold mine):
The July FHFA Home Price Index rose 0.3% month over month, 0.2% less than expected and June was revised lower to a gain of 0.1%, down from the initial report of up 0.5%. Year over year prices are down 4.2% and are (only) 10.5% below its April 2007 high. According to the FHFA, their index is back to the March '05 level.Not surprising that the areas showing the strongest rebound are those areas that had already seen a significant correction to the downside (i.e. Pacific, South Atlantic, and Mountain were those areas with the largest year over declines).
This measure only includes those single family mortgages that are backed by Fannie Mae and Freddie Mac (i.e. conforming loans), but is well diversified geographically (includes all 50 states). The Case-Shiller HPI index in contrast includes jumbo loans and also doesn't include data from 13 states. Its 20 city index is down 33% from the all time high. The Case-Shiller index is value-weighted, "meaning that price trends for more expensive homes have greater influence on estimated price changes than other homes."
FHFA's index "weights price trends equally for all properties." Thus, take today's info in conjunction with others to get a more complete picture on pricing trends.
Month over Month by Region
More broadly, prices within the FHFA index have appeared to stabilize...
Historical Index
But, the improvement we've seen in lower to middle-income homes backed by conforming loans doesn't mean all markets have improved. As Calculated Risk warned backed in June (bold mine):
The FHFA index is based on GSE (government sponsored entity) loans (i.e. Fannie Mae and Freddie Mac conforming loans), and as the most recent data showed, a higher percentage of the problem loans were non-GSE private label loans. Also, the FHFA misses many larger loans in general, and high end prices have held up better so far - but that will change when people realize there are few move-up buyers.In other words, the problem areas had been concentrated within the lower-end subprime / Alt-A funded home purchases (not these homes within the FHFA index) and now the problems are drifting to higher-end homes which aren't getting the benefit of first time buyers (i.e. for high-end homes move up buyers can be throught of as the equivalent) and/or a tax credit.
We're not out of the woods just yet...
Source: FHFA
--
Source: http://econompicdata.blogspot.com/2009/09/fhfa-home-price-index.html
~
Manage subscription | Powered by rssforward.com
Eurozone Industrials Continue to Bounce off Lows
The Good
Forbes details:
Euro zone industrial new orders rose more than expected month-on-month in July on demand for durable consumer goods, reinforcing expectations that the single currency area will exit recession in the third quarter.
Industrial orders in the 16-country area rose 2.6 percent against June, the European Union's statistics office said on Wednesday. They were 24.3 percent lower than a year earlier.
"This reinforces hopes and expectations that the euro zone will return to growth in the third quarter," said Howard Archer, economist at IHS Global Insight.
Economists polled by Reuters had expected a 2.0 percent monthly increase and a 25.0 percent year-on-year fall.
The Perspective
Source: Eurostat
--
Source: http://econompicdata.blogspot.com/2009/09/eurozone-industrials-continue-to-bounce.html
~
Manage subscription | Powered by rssforward.com
Evaluating Equities
Posted on Tuesday, September 22, 2009
| Leave a Comment
While the days of buy and hold may be over, below is a simplified way to think about forecasting equity returns over the long haul that I've found useful. I'll walk through the methodology, show some supporting charts, then detail my expectations for the equity asset class over the mid-to-long term. I'd love to hear all of your thoughts.
Equity Returns: In Theory
The earnings of a company are what you own as an investor and earnings are paid out to investors through dividends. Another way to say this is that the value of a company is the sum of the present value of all future dividends. Thus, equity returns = dividend (or corporate earnings) growth + the dividend yield (what isn't returned to an investor in the form of a dividend now, is reinvested, and grows at that same growth rate as earnings).
Quick and Dirty Estimation of Earnings Growth
A quick and dirty way that has been used to forecast future equity returns is to use nominal GDP growth as a substitute for earnings growth because in theory, earnings growth should be roughly equal to the growth of the economy (earnings can't in theory grow faster in the long run as that would imply that earnings are greater than the economy which isn't possible). The reason why this is quick and dirty is because it is just that... quick and dirty. So dirty in fact, that it is wrong. Over the past 60 years, earnings (and thus dividend) growth of S&P 500 companies hasn't kept up with that of the broader economy (AND has recently taken a massive dive).
Historical Data
Below is a chart showing just that, the growth of the economy and that of both earnings and dividends.
In theory, since the growth rate of dividends and earnings have been lower than that of nominal GDP, the S&P 500 should have underperformed the nominal growth rate of equities ex dividends. However, as the chart below shows, just the opposite has occurred as investors have flocked to the asset class (think 401k's and baby boomers) driving up the price to earnings ratio (i.e. the price individuals are willing to pay for each $1 of earnings) since 1949.
Equity Forecast
Forecasts should never be thought of as an exact science, but rather a framework based upon assumptions that can / will change frequently. That said, using a combination of the quick and dirty method detailed above, I'd go 2.5% long-term GDP growth (in real terms) + 2% inflation to get nominal economic growth of 4.5%. Add to that the 2.5% current dividend yield and we get a 7% long-term return for equities as an asset class. BUT, based on the data I presented above, I'd take out the roughly 1-1.5% that dividends have underperformed nominal GDP and I get a 5.5-6% range.
Of course there are scenarios that could play out over both the near-term (continued P/E compression from strong flows into the asset class) and long-term (economic growth reverting back to the long-term mean faster than I suspect), but there are also plenty of surprises that may happen to the downside (one specifically being the possibility of the P / E ratio trending lower in coming years).
Source: Irrational Exuberance / BEA
--
Source: http://econompicdata.blogspot.com/2009/09/evaluating-equities.html
~
Manage subscription | Powered by rssforward.com
Market Down Big... Market Up Big... Market Typical Continues to Go Up
While this may not be as catchy as the Pub Power signal detailed last week, what I'll dub as the "5 and 5" and "1 and 1" is rather interesting.
What is it?
I noticed that at the end of August, the year over year change in the S&P index was more than 21% down, but the 6 month change was more than 25% up. The bearish case is that things have come too far, too fast, whereas the bullish case is that we still have ground to make up.
Lets see what history has to show us. First I took a look at S&P 500 data from 1950 onward. Since that date, whenever the S&P was down more than 5% over the previous 12 months at month end, BUT 6 month returns were up more than 5% (we'll call this "5 and 5"), we have seen a continued rally in the S&P 500 in each of the 11 months (all within five periods - 1958, 1962-3, 1970, 1975, and 1988).
Digging Deeper
Each of the red points in the chart below represent those periods shown above (i.e. the "5 and 5", but now we go back 100 years to 1909. The blue dots are similar, but represent the forward 12 month change in the S&P 500 when equities dropped more than 1% over 12 months, but have gained more than 1% over 6 (i.e. the 1 and 1").
Historical data seems to indicate that now may in fact be a time to buy as the average 12 month change in the index following a "1 and 1" is a robust 13.1% and a "5 and 5" is an uber-strong 16.7%.
BUYER BEWARE
The only time we saw a massive (i.e. greater than 20%) loss during a 12 month period following a "5 and 5" was in May 1930, a period in which the market had first rebounded from the initial market crash of what would be the Great Depression. By the Summer of 1932, the S&P was more than 80% lower.
Source: Irrational Exuberance
--
Source: http://econompicdata.blogspot.com/2009/09/market-down-big-market-up-big-market.html
~
Manage subscription | Powered by rssforward.com
Leading Indicators Show Continued Strength
Posted on Monday, September 21, 2009
| Leave a Comment
The Conference Board details:
LEI for the U.S. increased for the fifth consecutive month in August. Supplier deliveries, the interest rate spread and stock prices made large positive contributions to the index this month, more than offsetting the substantial negative contribution from real money supply. The six month change in the index has picked up to 4.4 percent (about an 8.9 percent annual rate) in the period through August, up sharply from -2.4 percent (a -4.7 percent annual rate) for the previous six months. In addition, the strengths among the leading indicators have been widespread in recent months.It is interesting to see that the money supply is no longer a "wind at the sail" (i.e. it is decreasing).
Source: Conference Board
--
Source: http://econompicdata.blogspot.com/2009/09/leading-indicators-show-continued.html
~
Manage subscription | Powered by rssforward.com
BookMark
