Diary of a Financier

Top Newsstuffs (October 12-18)

In Bookshelf on Sun 18 Oct 2015 at 06:27

Top reads from the week that was…

Macro

Retail sales (September 2015) | US Government Census
Weak report as sales remain at tepid velocity, only meeting consensus due to prior months’ downward revisions; below-trend growth remains disappointing, especially given the tailwind of “consumer stimulus” from lower energy prices, which should lap next month:Retail sales ($gross & %change yoy, 2015.09)
Headline: +0.4pp @ +2.4% yoy, +0.1% mom (meets +0.1e); prior month revised down (-0.2pp @ unch mom)
    Autos: +3.3pp @ +8.8% yoy, +1.7% mom
Core (ex-autos): -0.4pp @ +0.8% yoy, -0.3% mom (miss -0.1e); prior month revised down (-0.2pp @ -0.1% mom)
    Gas: -1.7pp @ -19.7% yoy, -3.2% mom; will lap high yoy comp base next month
#Neutral

Inflation: Consumer Price Index (September 2015) | Bureau of Labor Statistics (BLS)
While headline grapples with the energy price crash for the last month (will start lapping yoy comps in October), core nudges-up just beneath the Fed’s 2.0% target; this does qualify as “price stability” per the Fed’s mandate, supportive of a policy rate hike:Core inflation- PCE, CPI, Median CPI, trimmed mean CPI 2015.09
Headline CPI: -0.2pp @ unch ttm, -0.2% mom (meet -0.2e)
    Energy: -3.4pp @ -18.4% ttm, -4.7% mom; sequential drag continues, but yoy comps should reach lower base in September
Core CPI (ex food & energy): +0.1pp @ +1.9% ttm, +0.2% mom (beat +0.1e)
#Neutral

Sentiment

Retail investor sentiment survey (2015.10.14) | American Association of Individual Investors (AAII)
Insignificant retracement after last week’s sentiment spike, with all cohorts remaining pretty average:AAII retail investor sentiment survey- bulls/bears 2015.10.14
Bull/Bear ratio: -7bp wow @ 1.26 (below 1.30 historical average)
Bullish: -3.4pp @ 34.1% (between 30 extreme low & 39 avg); slight ebb after last week’s spike up from near postcrisis low
Bearish: -1.0pp @ 27.1% (between 25 extreme low & 30 avg); continues descent from extreme highs
Neutral: +4.5pp @ 38.8% (above 31 avg)
Measures respondents’ expectation for equity performance over next 6 months (through 4/2016).
[Previously: Retail allocations neutral, Institutional allocations neutral & Strategist sentiment is bullish]
#Neutral #Contrarian

–Romeo

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