Diary of a Financier

Top Newsstuffs (April 20-26)

In Bookshelf on Sun 26 Apr 2015 at 05:04

Top reads from the week that was…

Macro

Rail traffic weekly (Week 15, 2015) | Association of American Railroads (AAR)
Essentially flat ytd, 2015’s weakness feels even worse since we should be seeing a faster snap-back as evidence of pent-up demand:
Weekly traffic: +1.5pp @ +1.2% yoyRailtraffic 2015 week 15
Growth rate: +0.1pp @ +0.1% ytd
Carload groups: 6 of 10 posted gains for the week yoy
    Motor vehicles/parts: +7.2; big spike (finally)
    Chemicals: +2.9
    Farm: +2.1
    Forestry: +2.1
    Metals: +1.9
    Minerals: unch
    Petroleum: -1.3; short-lived recovery ends
    Coal: -12.6; a heavy drag on data
    Grain: -15.8; months of gains end in a crash
2014 & 2015 both share the hindrance of record snowfalls (2014 being nationwide & 2015 limited to the Northeast), and 2015 added the dislocation of California port closures — all of which have now been resolved.
Given the secular decline of coal volumes (~38% of carloads makes it the largest category), traffic doesn’t seem able to stand on its own without the tailwind of energy boom
#Bearish $IYT

Manufacturers’ durable & capital goods (March 2015) | US Department of Commerce
While headline data beat expectations, core missed across the board with prior month revised down slightly; deceleration in yoy comps continues; ytd growth rates still dip further below trend GDP:Core durable & capital goods orders 2015.03
Core durable goods (ex-transportation)
    Orders: -1.2pp @ -0.7% ytd, -0.2% mom (misses +0.3e)
    Shipments: -0.5pp @ +1.2% ytd, -0.3% mom
Core capex (nondefense, ex-aircraft capital goods)
    Orders: -1.8pp @ -1.8% ytd, -0.5% mom (misses +0.3e)
    Shipments: -0.9pp @ +2.7% ytd, -0.4% mom
Inventory
    Inventories: -1.2pp @ +4.9% ytd, +0.1% mom @ $412.9B SA (SA & NSA set record highs again)
This month doesn’t have the benefit of easy yoy comps from January & February 2014’s extreme winter.
#Bearish #Deceleration

Technicals

Rig count weekly (Week 15, 2015) | Baker Hughes
E&P rigs keep tumbling for 20th straight week:Rig count 2015 week 15
Active oil rigs: -54.2% yoy, -4.2% wow @ 703; lowest since 10/2010
– Active gas rigs: -30.3% yoy, +3.7% wow @ 225
The chart really makes the Energy Renaissance looks like a bubble that went boom/bust.
$XLE $OIH $XOP

Sentiment

Investor sentiment survey (2015.04.22) | American Association of Individual Investors (AAII)
Sentiment remains in neutral territory, hardly budging; neutral cohort remains outsized in a sign of healthy uncertainty:
Bull/Bear ratio: -5bps wow @ 1.36 (above 1.28 historical average, but below 1.80 extreme high)
Bullish: -0.6pp @ 31.5% (under both 38.9 avg & 45 extreme high)
Bearish: +0.4 @ 23.2% (under both 30.4 avg & 25 extreme low)
Neutral: +0.2 @ 45.3% (over 30.7 avg)
Measures respondents’ expectation for equity performance over next 6 months (through 10/2015).
[Previously: Retail allocations stay neutral, Fund manager allocations bullish for US equities & Strategist sentiment remains a bullish signal]
#Bullish #Contrarian

Interests

Strategist: Five reasons why GDP will bounce back in 2015q2 | Jan Hatzius (Goldman Sachs)
Goldman’s GDP forecasts:
Q1 @ +1.2%
Q2 @ +3.5%
Reasons for the snap-back:
1. Severe winter weather thaws: -1pp drag on GDP in Q1 + pent-up demand
2. Consumption acceleration: spending savings from energy price collapse
3. Household formation acceleration: despite weak housing starts in March
4. Oil crash lapses: yoy comps get easier in H2
5. Government spending seasonality: -0.6pp drag on GDP in Q1 + Q4 historically
[Previously: The economic deceleration is for real this year]
#Consensus

White paper: Study on Investment Advisors and Broker-Dealers (January 2011) | The Securities & Exchange Commission (SEC)
Recommends that brokers drop the “suitability” standard & adopt “fiduciary” standard.

–Romeo

Advertisements
  1. […] orders: +1.7 @ 53.5     Production: +2.2 @ 56.0     Inventories: -2.0 @ 49.5; echos durable goods, leaving some slack for coming months     Deliveries: -0.4 @ 50.1     Exports: +4.0 @ 51.5; […]

Comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s