Posts Tagged ‘Auto Sales’

The Ghosts of Lapsed Stimuli

The Ghosts of Lapsed Stimuli

The Ghost of Christmas Present appearing to Scrooge. Illustration by John Leech (1817-64) for Charles Dickens A Christmas Carol , London 1843-1834.

Courtesy of Rick Davis at Consumer Metrics Institute 

We have mentioned before that our year-over-year indexes are effected by both the current level of consumer activities and the year-ago levels of that same activity. Even if current levels remain dead flat, changing levels from the prior year can impact the year-over-year numbers. The bottom line, however, is that almost all economic measures ultimately use prior levels as reference points, and it is the annualized growth rates that we actually remember from the GDP reports.

Nothing demonstrates this phenomenon more clearly than our Automotive Index, which experienced a tremendous upward spike at this time last year from the ‘cash for clunkers’ stimulus package. Looking back at the chart for that index from a couple of months ago the spike is glaringly obvious: 


Now fast forward to the current chart, where the upward ‘blip’ from the consumer oriented stimulus has inexorably shifted to the left and is half off the chart:


There are several conclusions that can be drawn from the above chart:

  • Some portion of the recent drop in our Domestic Autos Sub-Index is the result of current consumer demand comparing poorly year-over-year to the level of stimulated demand during the year-ago period.
  • The historical portions of the chart clearly show that a consumer oriented stimulus can have a measurable effect on select sectors of the economy.

But, at least for domestic autos during this recovery:

Without stimulus, significantly increased consumer demand has not been sustained. We see no signs of ‘organic’ or structural recovery yet in the either of two key durable goods sectors: Automotive and Housing:


The above chart is for the demand for new loans for newly acquired residential property (i.e., it excludes refinancing activities — which have remained strong). Again the impact of consumer oriented stimuli can be seen in the historical left side of the chart, but the right side tells us a great deal about whether the stimuli actually primed the Housing pump, or merely moved sales forward several quarters. If Housing is to become a real engine of economic growth again, this chart would have to move back into substantially positive territory and stay there without benefit of congressional give-aways.

Our year-over-year ‘Daily Growth Index’ continues…
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Heh Where Are The Sales?

Heh Where Are The Sales?

Courtesy of Karl Denninger at The Market Ticker 

But I thought we had an economic recovery underway?

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for June, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $360.2 billion, a decrease of 0.5 percent (±0.5%)* from the previous month

Heh, that’s not so good.  Ex-autos sales were down -0.15%, implying what we’ve already seen reported: auto sales have gone in the tank.

But that’s not the only place we found bad news.  Building materials were down about 1%, and, interestingly, so were food and beverage stores (about 1/2%.)  Gasoline sales were down 2%, while clothing stores, general merchandise and electronics were up slightly.

All in all not a disastrous report – but definitely not a strong one either.  The market reaction was immediately negative, although the move (about 1/2% southbound) wasn’t dramatic.

The evidence continues to mount that the economy is, indeed, slowing once again.


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For Those Still Clinging To Hope, Here is David Rosenberg: “…Weakest Post-Recession Recovery On Record”

For Those Still Clinging To Hope, Here Is David Rosenberg: "This Is The Weakest Post-Recession Recovery On Record"

Courtesy of Tyler Durden


To all those fewer and fewer optimists who believe the economy may avoid a double dip (or alternatively suffer the realization it never really got out of the depression in the first place), David Rosenberg provides a glimpse just how tenuous the so-called recovery has been, even despite the unprecedented attempts by everyone at the top to shepherd the economy into growth at any cost, and the daily reminder from Ben Bernanke that risk is dead and the Fed will never let capital markets drop again. As for the future, Rosie asks the logical question: how is it that earnings are expected to grow by 20% in 2011, when it is becoming increasingly obvious that GDP growth next year will be negative?

From Gluskin Sheff’s Breakfast with Dave:

Let’s look at the situation from a top-down view. We have seen real U.S. GDP growth average 3.2% at an annual rate during this statistical recovery from the 2009 bottom. Of that, 2.1 percentage points came from the inventory swing — or about two-thirds of the growth. The remaining 1.2% average annual growth rate of GDP excluding inventories — otherwise known as “real final sales” — is the weakest post-recession recovery on record. The weakest ever, despite a 10% deficit-to-GDP ratio, a debt-to-GDP ratio rapidly heading to 100%, a near zero Fed funds rate, record low mortgage rates, an unprecedented tripling in the size of the Fed balance sheet, shifting accounting rules to help rejuvenate profit growth in the financial sector, cheap and easy FHA financing to virtually anyone who wants to buy a home, relentless government pressure on banks to modify defaulted loans, and bailout stimulus galore (Fannie and Freddie are now de facto “Crown Corporations” and their stock still trades!!) — and with all that, all we get for our money is a paltry 1.2% growth rate in final sales. Yuk.

And, just in case it is still unclear, Rosie sees much pain in the future:

Well, what’s past is past. Where are we going? It’s pretty clear from the manufacturing components of the last payroll report and the latest ISM index that the inventory cycle is either reaching its peak or it already has. The inventory plan

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Courtesy of The Pragmatic Capitalist

Excellent thoughts here from David Malpass on the potential of sustained economic rebound:


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Testy Tuesday – Topping or Popping?

I told you yesterday would be fun!

Will today be funner?  Is funner a word?  As you know, I have been determined to get more bullish and our Watch List is growing every day as I add more and more undervalued companies that still have room to fly if we are truly going to run the S&P back over 1,100 this year.  We remain skeptical but you can be skeptical and still make money, as you can see from Corey's (Afraid to Trade) very nice S&P Chart, you can do very well in this market buying the dips OR selling the tops – we kind of like to do both

Despite the low volumes, buyers are clearly in control of this market and, in Member Chat yesterday, I compared the situation to having a bet on the Raiders, who lost 44 to 7 on Sunday.  You can start out with a bet on the Raiders (in this case, the Bears) but there’s a certain point, perhaps when the 3rd consecutive possession by the Giants (Bulls) ends in a TD, that you have tgo admit you aren’t going to win.  

You have a few choices at that point:  You can be a perma-Raider and keep betting more and more on your team (not smart);  You can swallow your losses and leave the stadium;  You can swallow your losses and stay on the sidelines and watch the game; Or you can switch sides and start betting on the Giants, maybe even recovering some of what you lost.  You can keep some of your useless-looking Raiders bets, just in case a miracle occurs but what’s the sense of not betting on a clear winner when it's right in front of you?  Even if you are skeptical, that can be useful as it keeps you out of trouble as you should be wise enough to take your profits off the table

I never understand the "fan" behavior of market players.  If you see the market going up and up and up and up – perhaps it's time to make a few up bets.  Bears don't earn loyalty rewards or get frequent-complainer points from the market so, if your "team" is getting trampled, it's OK to switch sides – at least for a while…
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Which Way Wednesday – For Oil?

Boy this is fun!

I love it when a plan comes together and all that tedious waiting has finally paid off as our bull trap has sprung and we are enjoying the ride down with all of the "wheee" and none of the nasty gnawing off of legs in order to get our money out.  While Jim Cramer decides to shamefully deflect the issue by CELEBRATING his call of a June housing bottom, his poor sheeple are getting hammered as wave after wave of sellsellsellers hit the wires.

It was, in fact, the BS housing data (sorry Jim but read past the headlines before you make a fool of yourself) that led us to get MORE bearish yesterday morning as it was reported RIGHT ON CNBC, that analyst Ivy Zelman said the following:

50 percent of sales in May were on spec. She says we’re seeing a lot of spec homes now because, “today’s consumer wants to touch and feel the house.” The positives are that cancellations are down, sales are better and there’s less negative pricing, although discounts are still prevalent. “The patient was without a pulse in the fourth quarter,” Zelman notes, “and now the patient’s in ICU.”  So why all the spec now? Because builders are trying to jam all these homes into buyers’ pockets before the expiration of the $8000 first time home buyer tax credit. It turns into a pumpkin November 30th.

So 50% of the sales (which were up 17%) were not sales at all!  That means that sales to ACTUAL people declined 33% in May.  We shorted the Qs right out of the gate and made our target 30% for the day trade and we had the usual fun with our oil shorts but, otherwise, all our bearish bets were working and there was little to do.  I called almost the exact finish for the day in my 2:58 comment to members where I said: "… since we need to sell off 5% and since NOT selling off more than 1.5% today would make it very unlikely we sell off 5% overall, then I think we need to finish lower than our lows so far.   Of course, Mr Stick knows this too so they will likely be fighting like hell to make sure that doesn’t happen while Mr Fund who…
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Zero Hedge

China Unleashes Perfect Storm Of Bad News Prompting Stock Market Plunge

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Earlier this week, we documented the curious case of Guotai Junan International Holdings’ CEO Yim Fung who went “missing” on November 18.

After five days of trying to reach Yim via his cell phone, the brokerage issued a statement saying they simply could not find him. Guotai's shares took a nosedive, falling 12%, the steepest decline in three months. 

You needn't have been a sleuth to make an educated guess as t...

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Phil's Favorites

Unbelievable Lie of the Day: Turkey Says It Had Not Recognized the Aircraft as Russian When it Shot it Down

Courtesy of Mish.

In the wake of conflicting flight path information with Russian and Turkey differing on the flight path of the Russian aircraft that Turkey downed over Syria, comes the incredulous claim that Turkey did not recognize the aircraft as Russian when it shot the aircraft down.

This unbelievable statement comes as Hollande and Putin Seek Common Ground but Remain at Odds Over Syrian Targets.
The leaders of France and Russia held more than three hours of talks at the Kremlin focusing on the fate of the Syrian president and on which parts of the armed opposition should be protected from air strikes.

The summit was part of Mr Hollande’s push for a broader coalition against Islamist radicals Isis after the attacks in Paris a ...

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Market News

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Financial Markets and Economy

Rich Asians Mostly Stick With Dollar Rally UBS Sees Almost Done (Bloomberg)

UBS Group AG, the world’s largest private bank, is telling its wealthy clients that the U.S. dollar’s gains are set to be limited as the Federal Reserve will probably tighten policy gradually after liftoff next month.

Switzerland is about to launch a huge experiment in 'the war on cash' (Business Insider)

A huge economic experiment will begin in Switzerland and Sweden in 2016, and some people are calling it ...

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Chart School

Greatest risk to the stock market is?

Courtesy of Read the Ticker.

Nope it is not interest rates, nope it is not Donald Trump, it is!

It is the CRUDE OIL crash, simple!

Jim Willie has good comments in the first 40 min of this pod cast.

Energy company ...
- Debt is blowing up (See energy element of HYG).
- Hedging at oil $100 is coming to an end.
- Iran coming back to the market, more supply.
- Saudi still providing massive supply.
- Oil tankers holding oil parked in the ocean are coming in to harbor to unload
- US dollar strength supports lower oil prices
- World wide DEMAND slump for energy or deflation.
- More oil being sold outside the US Dollar
- The Oil futures can not be manipulated easily as folks actually ...

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All About Trends

Mid-Day Update

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.

To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Kimble Charting Solutions

S&P 500 – Dangerous for bull case, if prices turn weak here!

Courtesy of Chris Kimble.


The S&P 500 remains inside of a rising channel that has been in place since 2010. The 5-year trend is up.

The 5-month trend is a different story, at this time.

Over the past 5-months, the S&P 500 has created a series of “falling weekly closing highs,” which is represented by line (1) above.

The S&P is testing this falling resistance line at (2) above.

If weakness takes place at (2) above, at falling resistance, it would be concerning price action for the bullish case!


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Sector Detector: Bulls wrest back control of market direction, despite global adversity

Reminder: Sabrient is available to chat with Members, comments are found below each post.

Courtesy of Sabrient Systems and Gradient Analytics

Some weeks when I write this article there is little new to talk about from the prior week. It’s always the Fed, global QE, China growth, election chatter, oil prices, etc. And then there are times like this in which there is so much happening that I don’t know where to start. Of course, the biggest market-moving news came the weekend before last when Paris was put face-to-face with the depths of human depravity and savagery. And yet the stock market responded with its best week of the year. As a result, the key issues dominating the front page and election chatter have moved from the economy and jobs to national security and a real war (rather than police ...

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Swing trading portfolio - week of November 23rd, 2015

Reminder: OpTrader is available to chat with Members, comments are found below each post.


This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...

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Digital Currencies

Bitcoin's Computing Network is More Powerful than 525 Googles and 10,000 Banks!

Courtesy of ZeroHedge. View original post here.

Submitted by Reggie Middleton.

I've decided to build our startup - Veritaseum, a peer-to-peer financial services platform, directly on top of the Bitcoin Blockchain. Many queried why I would voluntarily give up a lucrative advisory and consulting business to chase virtual coins in cyberspace. That's exactly why I decided to do it. That level of misunderstanding of what is essentially the second coming of the Internet gave me a fundamental advantage over those who had deeper connections, more capital and more firepower. I was the first mover advantage holder.

You see, Bitcoin is not about coins, currency or price pops. It is a massive computing net...

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PSW is more than just stock talk!


We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more! features the most important and most interesting news items from around the web, all day, every day!

News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

If you are looking for non-mainstream, provocatively-narrated news and opinion pieces which promise to make you think -- we feature Zero Hedge, ...

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Whitney Tilson On LL, EXACT, And Martin Shkreli


Whitney Tilson On LL, EXACT, And Martin Shkreli

Courtesy of Value Walk

1) The shares of one of my largest short positions (~3%), Exact Sciences, crashed by more than 46% yesterday. Below is the article I published this morning on SeekingAlpha, explaining why I think it’s still a great short and thus shorted more yesterday. Here’s a summary:

  • The U.S. Preventative Services Task Force’s Colorectal Cancer Screening Draft Recommendation issued yesterday is devastating for Exact Sciences’ only product, Cologuard.
  • I think this is the beginning of the end for the company.
  • My price target for the stock a year from now is $3, so I shorted more yes...

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Baxter's Spinoff

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

Baxter Int. (BAX) is splitting off its BioSciences division into a new company called Baxalta. Shares of Baxalta will be given as a tax-free dividend, in the ratio of one to one, to BAX holders on record on June 17, 2015. That means, if you want to receive the Baxalta dividend, you need to buy the stock this week (on or before June 12).

The Baxalta Spinoff

By Ilene with Trevor of Lowenthal Capital Partners and Paul Price

In its recent filing with the SEC, Baxter provides:

“This information statement is being ...

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Mapping The Market

An update on oil proxies

Courtesy of Jean-Luc Saillard

Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself. 


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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

Thank you for you time!

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