Posts Tagged ‘Consumer Metrics’

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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GDP: 3 Years of Massive Downward Revisions; Inventory Adjustments Run their Course; Where to From Here? Fed’s Counterproductive Policies

GDP: 3 Years of Massive Downward Revisions; Inventory Adjustments Run their Course; Where to From Here? Fed’s Counterproductive Policies

Courtesy of Mish 

The BEA has finally admitted something anyone with a modicum of common sense already knew: The recession was far deeper and the "recovery" far weaker than previously reported.

Please consider BEA report Gross Domestic Product: Second Quarter 2010 (Advance Estimate) Revised Estimates: 2007 through First Quarter 2010

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 2.4 percent in the second quarter of 2010, (that is, from the first quarter to the second quarter), according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 3.7 percent.

The real story in the report was not the continuing ratcheting down of GDP forward estimates, but rather massive backward revisions, most of them negative, dating back three full years.

Revision Lowlights

  • For 2006-2009, real GDP decreased at an average annual rate of 0.2 percent; in the previously published estimates, the growth rate of real GDP was 0.0 percent. From the fourth quarter of 2006 to the first quarter of 2010, real GDP increased at an average annual rate of 0.2 percent; in the previously published estimates, real GDP had increased at an average annual rate of 0.4 percent.
  • For the revision period, the change in real GDP was revised down for all 3 years: 0.2 percentage point for 2007, 0.4 percentage point for 2008, and 0.2 percentage point for 2009.
  • For the revision period, national income was revised down for all 3 years: 0.4 percent for 2007, 0.6 percent for 2008, and 0.4 percent for 2009.
  • For the revision period, corporate profits was revised down for all 3 years: 2.0 percent for 2007, 7.2 percent for 2008, and 3.9 percent for 2009.
  • For 2007, the largest contributors to the revision to real GDP growth were a downward revision to PCE, an upward revision to imports, and a downward revision to state and local government spending;
  • The percent change from fourth quarter to fourth quarter in real GDP was revised down from 2.5 percent to 2.3 percent for 2007, was revised down from a decrease of 1.9 percent to a decrease of 2.8 percent for


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Zero Hedge

JPMorgan Makes $1 Billion From Gold Trading After Paying $1 Billion Fine For Manipulating Gold Trading

Courtesy of ZeroHedge View original post here.

This, in a nutshell, is how Wall Street works: just two months after JPMorgan was fined a record $1 billion criminal monetary penalty (to make sure not a single banker would end up going to prison) for rigging the gold and silver markets, Reuters reported that JPM - having clearly "learned" the tools of the gold rigging trade, has earned a record $1 billion in revenue so far in 2020 from trading, storing and financing precious metals, vastly outperforming rival banks.

The math simplified: JPM has spent $1 billion over the l...



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ValueWalk

Surprise in Short Interest - New Research Paper

By Jacob Wolinsky. Originally published at ValueWalk.

We extract the news component of short-selling activity by accounting for important cross-sectional, distributional differences in short interest. The resulting measure of surprise in short interest negatively predicts the cross section of both U.S. and international equity returns. Our results also indicate that this predictability originates from short sellers’ informed trading on mispricing and the market’s underreaction to the news component of short-sale reports. Consistent with the notion of costly arbitrage, the return predictability is stronger among illiquid, volatile stocks and stocks with high information uncertainty, but importantly, unrelated short-selling frictions.

...

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Phil's Favorites

Coronavirus Could Cause Shipping Costs To Rise By Up 15% In 2020

By Jacob Wolinsky. Originally published at ValueWalk.

Managing Shipping Budgets in 2021: The Old Normal, the New Normal, or the Unknown?

As they plan their shipping budgets for the coming year, distributors and retailers are struggling to assess the pandemic-driven changes of 2020. SkyPostal’s A.J. Hernandez suggests a two-sided approach: be as careful as you can, while also being prepared for anything.

Building A Shipping Budget

(Miami, FL) November 23, 2020—While shipping managers would like to see some relief from the shocks and surprises of 2020, there are, says A.J. Hernandez, President and CEO of SkyPostal, Inc., a lot of reasons they’re probably not going to get it. According to a recent survey of industry exp...



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Politics

TRUMP CONCEDES (SORT OF)

 

TRUMP CONCEDES (SORT OF)

Courtesy of Teri Kanefield

The Trump Legal team filed more documents today in the appellate court. I tweeted a bit about how silly they were (let me know if you all want me to march through them). Then this happened:

Trump giving the go-ahead for the transition to get underway was (I believe) the closest he will get to conceding the election. Two amusing things happened. First, Trump tweeted this about 10 minutes after Emily Murphy submitted a letter saying she would move forward, and that she has made her decisions solely on her own and not at anyone’s direction. Looks like Trump wanted people to think that she was, in fact, acting at his direction.

The other amusing part was that Tr...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Friday, 12 June 2020, 08:06:43 PM

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Comment: Interesting (2)



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Comment: Recession Forecasts Time Frame



Date Found: Monday, 15 June 2020, 11:07:52 PM

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Biotech/COVID-19

Why the Oxford AstraZeneca vaccine is now a global game changer

 

Why the Oxford AstraZeneca vaccine is now a global game changer

Courtesy of Michael Head, University of Southampton

In the long dark tunnel that has been 2020, November stands out as the month that light appeared. Some might see it as a bright light, others as a faint light – but it is unmistakably a light.

On November 9, Pfizer announced the interim results of its candidate vaccine, showing it to be “more than 90% effective” in preventing symptomatic COVID-19 in late-stage human trials. The news was greeted with joy.

A ...



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Kimble Charting Solutions

Transports Sending Strong Bullish Message To Other Dow Indices?

Courtesy of Chris Kimble

Are Transportation stocks about to send a quality bullish message to other Dow indices this month? Sure could be!

This 3-pack looks at the Dow Jones Industrials, Transports, and Utilities indices on a monthly basis.

One week from the end of a month, the DJ Transports are attempting an important bullish breakout at (1). Unless a sharp reversal takes place in the next week, Transports could close out the month at new monthly closing highs!

The Dow is attempting to close at all-time highs this month, while the Dow Utilities Index remains a few percent below 2020 highs....



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Digital Currencies

Dalio Admits "I Might Be Missing Something" As Bitcoin Surges Above $18,000

Courtesy of ZeroHedge

Since the US election, Bitcoin prices (in USD) have surged a stunning 40%, also lurching higher after each vaccine headline hit.

Source: Bloomberg

Getting ever closer to its all-time record high...

Source: Bloomberg

As crypto prices soared overnight, Bridgewater Associates founder Ray Dalio stepped back into the fray, saying in a Twitter thread that “I might be missing something about Bitco...



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Mapping The Market

COVID-19 Forces More Than Half of Asset Management Firms to Accelerate Adoption of Digital Marketing Technology

By Jacob Wolinsky. Originally published at ValueWalk.

There is no doubt that the use of technology to support client engagement initiatives brings both opportunities and threats but this has been brought into sharp focus this year with the COVID-19 pandemic.

The crisis has brought to the fore the need for firms to enable flexibility in client engagement – the expectation that providers will communicate to clients on their terms, at their speed and frequency and on their preferred channels, is now a given. This is even more critical when clients are experiencing unparalleled anxiety from both market conditions and their own personal circumstances.

...

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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

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