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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Phil's Favorites

Climate change may scuttle Caribbean's post-hurricane plans for a renewable energy boom

 

Climate change may scuttle Caribbean's post-hurricane plans for a renewable energy boom

Courtesy of Masao Ashtine, University of the West Indies, Mona Campus

Puerto Rico lost electricity again on April 18, seven months after Hurricane Maria first knocked out the island’s power grid. For people in some remote rural areas, the blackout was more of the same. Their power had yet to be restored.

The dangerous fragility of Puerto Rico’s energy systems has put other Caribbean ...



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Zero Hedge

The War Between Public Pensioners And Tax Donkeys Is Heating Up

Courtesy of ZeroHedge. View original post here.

Authored by Charles Hugh Smith via OfTwoMinds blog,

The migration is only beginning, but that's only half the story.

You know it's serious when the newspaper of record finally reports it: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash (New York Times).

It's a long article but the summary is brief: corru...



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Insider Scoop

Cowen Says The Big Sell-Off In Skechers Is A Buying Opportunity

Courtesy of Benzinga.

Related SKX 25 Stocks Moving In Friday's Mid-Day Session Mid-Day Market Update: Skechers USA Falls After Weak Q2 Guidance; Ericsson Shares Climb...

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Chart School

Short Opportunity II

Courtesy of Declan.

The first chance for a short play got burned but there is a second one on offer for the S&P.

The S&P tagged channel resistance and while today's reversal off resistance didn't amount to a big percentage loss it did register as a distribution day. There wasn't any significant technical change so if this short does evolve it will do so with risk measured on a move above 2,717.


The Nasdaq may match a 'bearish evening star' but if this is the case there has to be a significant move lower tomor...

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Digital Currencies

Only 0.04% Of Taxpayers Are Reporting Any Bitcoin Gains To The IRS

Courtesy of Zero Hedge

With the US tax deadline just one day away, crypto investors who traded actively during the market's run-up and inevitable meltdown should have a lot of activity to report to the IRS.

But according to a survey conducted by Credit Karma, only a handful of people who have filed their taxes using Credit Karma's tools have reported bitcoin holdings or holdings of some other cryptocurrency - fewer than 100 out of a total of 250,000 filers, or a whopping 0.04% in total.

In all likelihood, this means that (tens of) thousands of bitcoin traders are refusing to pay the IRS, either betting on the anonymity of the blockchain to conceal th...



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ValueWalk

Buffett At His Best

By csinvesting. Originally published at ValueWalk.

Bear with me as I share a bit of my history that helped me create SkyVu and the Battle Bears games. The University of Nebraska gave me my first job after college. I mostly pushed TV carts around, edited videos for professors or the occasional speaker event. One day, Warren Buffet came to campus to speak to the College of Business. I didn’t think much of this speech at the time but I saved it for some reason. 15 years later, as a founder of my own company, I watch and listen to this particular speech every year to remind myself of the fundamentals and values Mr. Buffett looks for. He’s addressing business students at his alma mater, so I think his style here is a bit more ‘close to home’ than in his other speeches. Hopefully many of you find great value in this video like I have. Sorry for the VHS...



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Kimble Charting Solutions

The Stock Bull Market Stops Here!

 

The Stock Bull Market Stops Here!

Courtesy of Kimble Charting

 

The definition of a bull market or bull trends widely vary. One of the more common criteria for bull markets is determined by the asset being above or below its 200 day moving average.

In my humble opinion, each index above remains in a bull trend, as triple support (200-day moving averages, 2-year rising support lines, and February lows) are still in play ...



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Members' Corner

Cambridge Analytica and the 2016 Election: What you need to know (updated)

 

"If you want to fundamentally reshape society, you first have to break it." ~ Christopher Wylie

[Interview: Cambridge Analytica whistleblower: 'We spent $1m harvesting millions of Facebook profiles' – video]

"You’ve probably heard by now that Cambridge Analytica, which is backed by the borderline-psychotic Mercer family and was formerly chaired by Steve Bannon, had a decisive role in manipulating voters on a one-by-one basis – using their own personal data to push them toward voting ...



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Biotech

How your brain is wired to just say 'yes' to opioids

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

 

How your brain is wired to just say ‘yes’ to opioids

A Philadelphia man, who struggles with opioid addiction, in 2017. AP Photo/Matt Rourke

Courtesy of Paul R. Sanberg, University of South Florida and Samantha Portis, University of South Florida

...

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Mapping The Market

The tricks propagandists use to beat science

Via Jean-Luc

How propagandist beat science – they did it for the tobacco industry and now it's in favor of the energy companies:

The tricks propagandists use to beat science

The original tobacco strategy involved several lines of attack. One of these was to fund research that supported the industry and then publish only the results that fit the required narrative. “For instance, in 1954 the TIRC distributed a pamphlet entitled ‘A Scientific Perspective on the Cigarette Controversy’ to nearly 200,000 doctors, journalists, and policy-makers, in which they emphasized favorable research and questioned results supporting the contrary view,” say Weatherall and co, who call this approach biased production.

A second approach promoted independent research that happened to support ...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

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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Promotions

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



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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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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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