Diary of a Financier

Top Newsstuffs (December 21-27)

In Bookshelf on Sun 27 Dec 2015 at 06:15

Top reads from the week that was…

Macro

Manufacturers’ durable & capital goods (November 2015) | US Department of Commerce
The underwhelming reports resume, with growth missing expectations across-the-board, even despite downward revisions to prior month data and easy yoy comps; only positive is continued inventory drawdowns.
Indicative of the broad manufacturing slowdown we’re seeing, in stark contrast to services expansion:
Core durable goods (ex-transportation)Core durable goods & capex (% change yoy, 2015.10)
    Orders: +0.1pp @ -2.6% ytd, -0.1% mom (miss +0.1e)
    Shipments: +0.1pp @ -0.9% ytd, -0.1% mom
Core capex (capital goods, ex-defense & aircraft)
    Orders: +0.2pp @ -3.6% ytd, -0.4% mom (miss -0.2e)
    Shipments: unch @ +0.1% ytd, -0.5% mom
Core inventory (ex-transportation)
    Inventories: -0.3pp @ -1.2% ytd, -0.1% mom
#Bearish #Deceleration

Gross Domestic Product: Third estimate (2015q3) | Bureau of Economic Analysis (BEA)
After the initial release had growth decelerating, this upward revision meets expectations, with growth maintaining its ~2% postcrisis trend velocity; above-trend Consumption is finally starting to net-out the energy crash’s drag (albeit still difficult to resolve w weak Retail Sales & Durable Goods data):
Real GDP (Q3): -0.1pp @ +2.1% qoq saar (meets +2.0e)Real GDP components 2015q3iii
    Inflation: Core +0.1pp @ +1.4%; Headline unch @ 1.3%
    Consumption (PCE): unch @ +3.0%
    Investment: -0.4pp @ -0.7%; Residential +0.9pp @ 8.2%; Intellectual property unch @ -0.8%
    Government spending: +0.1pp @ +1.8%; Federal +0.1pp @ +0.2%; State & local +0.2pp @ +2.8%
    Exports: -0.1 @ +0.7%
    Imports: +0.2 @ +2.3%
    Inventories: -12 @ -71bps detraction fm GDP growth rate
Real GDP per capita (Q3): +1.2%; 9.8% below LT regression trend
Real GDP (Q2): unrevised @ +3.9% qoq saar
Real GDP (FY14): unch @ +2.4% yoy
Real GDP (FY13): unch @ +1.5% yoy
Real GDP (FY12): unch @ +2.2% yoy
#Bullish

Credit

NYSE margin debt & balances (November 2015) | Doug Short (dshort.com)
All measures maintain elevated levels; expect deleveraging to continue with Fed rate hikes…NYSE margin debt vs SPX (real gross & net, 2015.11)
Nominal margin debt: +0.2% mom, +3.4% yoy @ $473B
Real margin debt: +0.2% mom; 7.1% off record high (4/2015), but still above prior highs from 3/2000 & 7/2007′s before those bear markets
Net margin balances (“buying power”): +1.2% mom @ -$191B debit; resumes recovery from record lows, but still doubles prior records from 2000, 2007 & 2011
[See also: Margin debt/NYSE ratio constant since 2007 & Margin debt/SPX ratio constant since 2007]
#Bearish #Leverage #Latent indicator

–Romeo

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