Diary of a Financier

Top Newsstuffs (April 25 – May 1)

In Bookshelf on Sun 1 May 2016 at 05:51

Top reads from the week that was…

Macro

Consumer confidence survey (April 2016) | Conference Board
Sentiment slips lower again…Consumer confidence vs GDP 2016.04
Consumer confidence index: -2.0 mom @ 94.2 (misses 95.8e); 48th percentile of historical data
[Previously: Retail sales neutral & A new generation of Depression Babies?]
#Neutral $XLY

Personal income & outlays (March 2016) | Bureau of Labor Statistics (BLS)
While the headline report was mixed relative to expectations, income growth is gaining traction, although it’s still not translating into spending…
Disposable personal income (Real DPI): +0.5pp @ +3.1% yoy, +0.3% mom
Personal consumption expenditures (Real PCE): -0.3pp @ +2.6% yoy, unch mom
Personal savings rate: +0.3pp @ +5.4%
[Previously: Retail sales neutral & A new generation of Depression Babies?]
#Neutral $XLY #Wages

Manufacturers’ durable & capital goods (March 2016) | US Department of Commerce
More big misses with both a sequential contraction and the continued slide in ytd data showing renewed struggles for manufacturing; the bad report was compounded by (mostly) downward revisions to prior month data…
Core durable goods (ex-transportation)Core durable goods & capex (% change yoy, 2016.03)
    Orders: +0.1pp @ +0.1 ytd, -0.2% mom (miss +0.5e)
    Shipments: unch @ -1.1% ytd, +0.2% mom
Core capex (capital goods, ex-defense & aircraft)
    Orders: -0.2pp @ -1.1% ytd, unch mom
    Shipments: -0.8pp @ -2.4% ytd, +0.3% mom
Core inventory (ex-transportation)
    Inventories: +0.1pp @ -3.0% ytd, +0.1% mom
#Bearish #Contraction

Gross Domestic Product: Advanced estimate (2016q1) | Bureau of Economic Analysis (BEA)
Another deceleration continues the multiyear trend of seasonally weak Q1s; consumption continues to buoy growth, as internals (like inventory drawdowns) are decent for Q2…
Real GDP (Q1): +0.5% qoq saar (miss +0.7e)Real GDP components 2016q1.i
    Inflation: Core +1.4%; Headline +0.3%
    Consumption (PCE): +1.9%
    Investment: -3.5%; Residential +14.8%; Nonresidential -5.9%, attributable to energy crash
    Government spending: +1.2%; Federal -1.6%; State & local +2.9
    Exports: -2.6%
    Imports: +0.2%
    Inventories: -0.33pp detraction fm GDP growth rate
Real GDP per capita (Q1): +1.13% yoy, -0.30% qoq; -10.3% below LT regression trend
Real GDP (FY15): unch @ +2.4% yoy
Real GDP (FY14): unch @ +2.4% yoy
Real GDP (FY13): unch @ +1.5% yoy
#Neutral $XLE

Sentiment

Retail investor sentiment survey (2016.04.28) | American Association of Individual Investors (AAII)
Sentiment not only deteriorates back into a buy signal, but also the swelling neutral cohort is indicative of healthy uncertainty…
Bull/Bear ratio: -16bp wow @ 0.96 (below 1.30 historical average & 1.00 – 1.80 extremes)
Bullish: -6.0pp @ 27.4% (below 39 avg & 30 – 45 extremes)
Bearish: +4.7pp @ 28.6% (below 30 avg, above 25 extreme low)
Neutral: +1.4pp @ 44.0% (above 31 avg)
Measures respondents’ expectation for equity performance over next 6 months (through 10/2016).
[Previously: Institutional allocations send bullish signal & Strategist sentiment still a buy signal]
#Bullish #Contrarian #Wall of worry

–Romeo

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