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: 

Chart

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:

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:

Chart

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

9 Y/O BOY SICK IN BED WITH ICE PACK AND THERMOMETER

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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DAVID MALPASS SAYS THE GDP IS NOT SUSTAINABLE

DAVID MALPASS SAYS THE GDP IS NOT SUSTAINABLE

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

Is Brexit The First Of Many Dominoes? A Few Charts

Courtesy of ZeroHedge. View original post here.

Courtesy of: Visual Capitalist

Is Brexit the First of Many Dominoes?

Markets have been turned upside down by a surprise Brexit result and the resignation of David Cameron. While there is looming uncertainty around how this will affect the United Kingdom and Europe from an economic perspective, it might be just the tip of the iceberg in terms of long-run consequences.

A Brexit opens the door for future events that would be previously unfathomable by popular opinion, ...



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ValueWalk

George Soros: With Brexit, EU Now On The Verge Of Collapse

By Jacob Wolinsky. Originally published at ValueWalk.

George Soros is back again with a dire warning – the Brexit could lead to the disintegration of the European Union. I noted in his earlier op-ed that Soros only focused on UK concerns with the EU and not with a EU break-up, but that it must surely be on his mind since he has warned that the EU is on the verge of collapse and Brexit now will hasten it. This too was my biggest fear regarding Brexit and even though I think Europe needs to get a hold of its immigration policy I favored remain. It looks like Soros so far is proving right – the IRA is back with demands in Ireland, the Scotts might vote for independence, there is talk of Italy breaki...



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Chart School

Best Stock Market Indicator Update

Courtesy of Doug Short's Advisor Perspectives.

We continue to receive requests for updates to the "Best Stock Market Indicator", which used to be a regular guest post from John Carlucci. Here is an update of the "Carlucci" indicator along with a summary of John's explanation on how he uses it.

As John described it: "The $OEXA200R (the percentage of S&P 100 stocks above their 200 DMA) is a technical indicator available on StockCharts.com used to find the "sweet spot" time period in the market when you have the best chance of making money."

Latest Indicator Position

According to this system, the market ...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

Why Brexit Is So Bad for the Global Economy (The Atlantic)

Great Britain’s decision to extricate itself from the EU has consequences that are at once far-reaching and unknown. By Friday morning, no market was immune. Great Britain’s currency, the pound, had fallen to its lowest levels since 1985, and the FTSE (an index of the London stock exchange) and DAX (a German stock index) plummeted. In the U.S., markets opened in the red, gold (a co...



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Kimble Charting Solutions

2007 pattern being repeated right now? Another "Push Away???"

Courtesy of Chris Kimble.

CLICK ON CHART TO ENLARGE

The NYSE index kissed the underside of dual resistance at (1) back in 2008. Once resistance held, a big push away from it took place and sellers stepped forward.

NYSE creating a similar pattern again at (2)???

This would NOT be a good place for the Risk On trade if the broad market starts “pushing away” from dual resistance at (2).

Full Disclosure- ...



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Mapping The Market

Thoughts on Brexit

I have mixed feelings about Brexit today. Clearly the European institution need reforming. The addition of so many countries in the last 20 years has created a top heavy administration. The Euro adds more complexities to the equation as the ECB policies cannot fit every country's problem. On the other hand, a unified Europe has advantages as well – some countries have benefited from the integration.

For Britain, it's hard to say what the final price will be. My guess is that Scotland might now vote for independence as they supported staying in Europe overwhelmingly. Northern Ireland might be tempted to leave as well so possibly RIP UK in the long run. I was talking to some French people and they were saying that now there might be no incentive for France to stop immigrants from crossing over to the UK like they do now and simply allow for travel there and let the UK deal with them. The end game is not clear to anyone at the moment....



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Digital Currencies

Bitcoin Tumbles 10%

Courtesy of ZeroHedge. View original post here.

One week ago, when bitcoin first crossed above $700 on the seemingly insatiable Chinese buying which we forecast last September (when bitcoin was trading at $230) would take place as a result of China's capital controls (to much pushback by the "mainstream" financial media), we tried to predict what may happen next. We said that "it could go much higher. That said, anyone who bought last September when the digital currency was trading at $230 may be advised to take some profits, and at least make...



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OpTrader

Swing trading portfolio - week of June 20th, 2016

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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All About Trends

Mid-Day Update

Reminder: Harlan 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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Biotech

This Is Why Biotech Stocks May Explode Again

Reminder: Pharmboy and Ilene are available to chat with Members.

Here's an interesting article from Investor's Business Daily arguing that biotech stocks are beginning to recover from their recent declines, notwithstanding current weakness.

This Is Why Biotech Stocks May Explode Again

By 

Excerpt:

After a three-year bull run that more than quadrupled its value by its peak last July, IBD’s Medical-Biomed/Biotech Industry Group plunged 50% by early February, hurt by backlashes against high drug prices and mergers that seek to lower corporate taxes.

...



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Promotions

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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!

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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.   

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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 jennifersurovy@yahoo.com 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.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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