Diary of a Financier

Top Newsstuffs (May 9-15)

In Bookshelf on Sun 15 May 2016 at 06:54

Top reads from the week that was…

Macro

Retail sales (April 2016) | US Government Census
Awesome report beats expectations, redoubled by upward revisions to prior month data; affirms the long-awaited green shoots from US consumers; starting to lap energy prices’ dead-weight too…Retail sales (%change yoy & $gross, 2016.04)
Core (ex-autos): +1.2pp @ +3.0% yoy, +0.8% mom (beat +0.5e); prior months revised higher
    Gas: -6.2pp @ -9.4% yoy, +2.2% mom
Core core (ex-gas & autos): +0.7pp @ +4.1% yoy, +1.2% mom
Headline: +1.3pp @ +3.0% yoy, +1.3% mom (beat +0.9e); prior months revised higher
Retail sales account for ~31% of US GDP (~45% of the Consumption component).
[Previously: Consumption boom or depression babies?]
#Bullish $XLY

Credit

Loans & leases in bank credit, all commercial banks (2016.05.04) | St. Louis Federal Reserve (FRED)
Lending growth remains at a health velocity, allaying concerns that credit cycle may be turning lower…Loans & leases in bank credit, all commercial banks (weekly, %yoy) 2016.04.06
Weekly loan growth: unch @ +7.9% yoy (beat 7.3% historical average)
This is a key indicator, as I’d expect continued expansion due to household & corporate balance sheets being most deleveraged as any point since the 1970s, signalling whether or not the private sector is suffering from post-traumatic stress — a hangover from the crisis (i.e. “Depression Babies”).
[Previously: Consumer indebtedness remains neutral & Loan officer survey sends bearish signal]
#Bullish #Releveraging $XLF $KBE $KRE

Sentiment

Retail investor sentiment survey (2016.05.12) | American Association of Individual Investors (AAII)
Sentiment falls deeper into an extreme buy signal, with both the bull & neutral cohorts near records…
Bull/Bear ratio: -9bp wow @ 0.65 (below 1.30 historical average & 1.00 – 1.80 extremes)
Bullish: -1.9pp @ 20.4% (below 39 avg & 30 – 45 extremes)Retail investor sentiment survey- bulls, bears & neutrals 2016.05.12
Bearish: +1.0pp @ 31.3% (above 30 avg & 25 extreme low)
Neutral: +1.0pp @ 48.3% (above 31 avg)
Measures respondents’ expectation for equity performance over next 6 months (through 11/2016).
[Previously: Retail asset allocations remain neutral, Institutional allocations are neutral & Strategist sentiment still a buy signal]
#Bullish! #Contrarian #Wall of worry

–Romeo

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