Diary of a Financier

Top Newsstuffs (November 9-15)

In Bookshelf on Sun 15 Nov 2015 at 07:52

Top reads from the week that was…

Macro

Retail sales (October 2015) | US Government Census
Another weak report as sales decelerate, missing consensus even with prior months’ downward revisions; below-trend growth remains disappointing, especially given the tailwind of “consumer stimulus” from lower energy prices, which should’ve been lapped this month:Retail sales (%change yoy & $gross, 2015.10)
Headline: -0.7pp @ +1.7% yoy, +0.1% mom (miss +0.3e); prior month revised down (-0.1pp @ unch mom)
    Autos: -2.6pp @ +6.2% yoy, -0.5% mom
Core (ex-autos): -0.3pp @ +0.5% yoy, +0.2% mom (miss +0.4e); prior month revised down (-0.1pp @ -0.4% mom)
    Gas: -0.4pp @ -20.1% yoy, -0.9% mom
#Neutral

Sentiment

Retail investor sentiment survey (2015.11.11) | American Association of Individual Investors (AAII)
Sentiment slides from the upper-bounds of exuberance all the way back to near normal levels, although Neutral cohort remains large in a healthy sign of uncertainty:
Bull/Bear ratio: -61bp wow @ 1.49 (above 1.30 historical average)AAII retail investor sentiment survey- bullsbears 2015.11.12
Bullish: -4.7pp @ 34.3% (below 39 avg)
Bearish: +4.4pp @ 23.0% (below 25 extreme low & 30 avg)
Neutral: +0.3pp @ 42.7% (above 31 avg)
Measures respondents’ expectation for equity performance over next 6 months (through 5/2016).
[Previously: Retail allocations neutral, Institutional allocations neutral & Strategist sentiment extremely bearish]
#Neutral #Contrarian

Interests

Allocation of S&P 500 companies’ corporate cash (by category, % & $B, 1999-2016e) | Goldman Sachs
Capital investment has declined since 2000 in favor of higher shareholder value initiatives, but today’s data are comparable to all non-crisis years (2004-14), challenging the notion of what “normal” really means…SPX corporate cash uses 1999-2016e
1/ Investment: 56% (Capex + R&D + M&A)
2/ Shareholder return: 44% (Dividends + Buybacks)
Charts the use of $SPX components’ cash.
[Previously: Waning capex is structural]
#Unconventional wisdom

–Romeo

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