Diary of a Financier

Top Newsstuffs (July 13-19)

In Bookshelf on Sun 19 Jul 2015 at 07:03

Top reads from the week that was…

Macro

Retail sales (June 2015) | US Government Census
Sales dip into contraction, even despite the aid of prior month downward revisions; really disappointing after last month finally showed the economy’s first evidence  of “consumer stimulus” from lower energy prices:Retail sales (% change yoy, 2015.06)
Headline: -1.3pp @ +1.4% yoy, -0.3% mom (misses +0.3e); prior month revised down (-0.2pp @ +1.0% mom)
Core (ex-autos): -1.2pp @ +0.1% yoy, -0.1% mom (misses +0.6e); prior month revised down (-0.2pp @ +0.8% mom)
#Bearish

Housing permits, starts & completions (June 2015) | US Government Census
Strong trend accelerates meaningfully, even with big prior month upward revision; remains a lonely sign of pent-up demand after a weak Q1 & Q2:Housing starts 2015.05
Monthly housing starts:  +21.5pp @ +26.6% yoy, +9.8% mom @ 1.174M saar (beats 1.125M exp); prior month revised higher
Growth rate:  +4.9pp @ +10.9% ytd
#Bullish #Green shoots

Inflation: Consumer Price Index (June 2015) | Bureau of Labor Statistics (BLS)
While headline still grapples with the energy price crash, core sneaks closer to the Fed’s 2.0% target:
Headline CPI: +0.1pp @ +0.1% ttm, +0.3 mom (meets +0.3e)Core inflation- PCE, CPI, Median CPI, trimmed mean CPI 2015.06
    Energy: -15.0% ttm, +1.7% mom; sequential drag continues to wane for 2nd straight month, but yoy comps should ease off lower base in September
Core CPI (ex food & energy): +0.1pp @ +1.8% ttm, +0.2% mom (meets +0.2e)
#Neutral #Disinflation

Sentiment

Retail investor sentiment survey (2015.07.15) | American Association of Individual Investors (AAII)
Sentiment recovers back to a neutral signal, ending a few weeks of conservatism during Greek/Troika negotiations; neutral cohort remains outsized — an indication of healthy uncertainty:
Bull/Bear ratio: +37bp wow @ 1.33 (above 1.28 historical average; below 1.80 extreme high)
Bullish: +2.9pp @ 30.8% (under both 38.9 avg & 45 extreme high)
Bearish: -5.9pp @ 23.2% (under 30.4 avg & 25 extreme low)
Neutral: +3.0pp @ 45.9% (over 30.7 avg)
Measures respondents’ expectation for equity performance over next 6 months (through 12/2015).
[Previously: Retail allocations neutral, Fund manager allocations neutral & Strategist allocations are bullish signal]
#Neutral #Contrarian

–Romeo

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