Diary of a Financier

Top Newsstuffs (August 17-23)

In Bookshelf on Sun 23 Aug 2015 at 06:31

Top reads from the week that was…

Macro

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 2015.06
Monthly housing starts:  -16.5pp @ +10.1% yoy, +0.2% mom @ 1.206M saar (beats 1.185M exp); prior month revised higher
Growth rate:  +0.4pp @ +11.3% ytd
#Bullish #Green shoots

Inflation: Consumer Price Index (July 2015) | Bureau of Labor Statistics (BLS)
While headline still grapples with the energy price crash, core remains just under the Fed’s 2.0% target:
Headline CPI: +0.1pp @ +0.2% ttm, +0.1 mom (misses +0.2e)Core inflation- PCE, CPI, Median CPI, trimmed mean CPI 2015.06
    Energy: -14.8% ttm, -1.4% mom; sequential drag continues, but yoy comps should reach lower base in September
Core CPI (ex food & energy): unch @ +1.8% ttm, +0.1% mom (misses +0.2e)
#Neutral #Disinflation

Sentiment

Retail investor sentiment survey (2015.08.19) | American Association of Individual Investors (AAII)
Sentiment remains a buy signal in extreme lows; neutral cohort retraces some of the paring from last week, remaining at extreme highs throughout 2015 ytd — an indication of healthy uncertainty:AAII retail investor sentiment survey- bullish/bearish/netural 2015.08.19
Bull/Bear ratio: -5bp wow @ 0.80 (below both 1.30 historical average & 1.80 extreme high)
Bullish: -3.6pp @ 26.8% (under both 39.0 avg & 45 extreme high); near postcrisis low
Bearish: -2.8pp @ 33.3% (above both 30.0 avg & 25 extreme low)
Neutral: +6.4pp @ 39.8% (above 31.0 avg)
Measures respondents’ expectation for equity performance over next 6 months (through 1/2016).
[Previously: Retail allocations neutral & Strategist allocations are bullish signal]
#Bullish #Contrarian

Global fund manager allocation survey (August 2015) | Bank of America Merrill Lynch (BAML)
Risk allocations remain a neutral signal after March’s extremes, with non-cyclical/defensive/income assets slowly clawing-back from extreme lows; the record flight of capital out of US into International markets persists:
Equity: -1pp @ +41% OW (between +15% to +50% extremes); still OW highest beta/cyclical sectors
Bonds: +1pp @ -59% UW (near -60 extreme low)BAML fund manager allocation survey- equity/fixed income/cash 2015.08
Cash: -0.3pp @ +5.2 OW (above +4.5 extreme high); falls from highest level since 12/2008
Commodities: -6pp @ -28% UW; a 20-month low (-1.7σ)
Regions:
    US: -7pp @ -14% UW
    Europe: +7pp @ +47% OW; extreme high (+1.3σ) near alltime high from 3/2015 (60%)
    Japan: +3pp @ +40% OW
    Emerging Markets: -12pp @ -32% UW; a new alltime low
Surveys a sample of 200+ PMs with $700B+ in AUM, asking for portfolio positioning (overweight/underweight) relative to 60/30/10 benchmark.
#Contrarian
#Bearish: $XLY $XLF $EZU $EWJ
#Neutral: $SPY $AGG $XPH
#Bullish: $XLE $EEM $XLB $DBC $XLP

Technicals

Index internals: Equal-weight indexes are in bear markets (drawdowns from alltime highs) | Irrelevant Investor
The average (i.e. equal-weight) small cap & all-cap stock is in a bear market (again), with other indices in correction territory:
Multicap ($IWV): -21.8% drawdown (mean)Index drawdowns (% fm 52-week highs, avg & median)
S&P 500 ($SPY): -14.6%
NASDAQ ($QQQ): -16.1%
Large cap ($IWB): -16.0%
Small cap ($IWM): -24.9%
#Internal correction

–Romeo

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  1. […] performance over next 6 months (through 1/2016). [Previously: Retail allocations neutral, Institutional allocations neutral & Strategist allocations are bullish signal] #Bullish […]

  2. […] expectation for equity performance over next 6 months (through 2/2016). [Previously: Institutional allocations neutral & Strategist allocations are bullish signal] #Bullish […]

  3. […] performance over next 6 months (through 2/2016). [Previously: Retail allocations neutral, Institutional allocations neutral & Strategist allocations are bullish signal] #Bullish […]

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