Diary of a Financier

Top Newsstuffs (July 18-24)

In Bookshelf on Sun 24 Jul 2016 at 06:59

Top reads from this week…

Macro

Housing permits, starts & completions (June 2016)
by US Government Census

Underwhelming report exceeds expectations due to massive downward revisions to prior months, but nevertheless maintains a strong trend in this prevailing bastion of pent-up demand…Housing starts 2016.06
Monthly housing starts:  -11.5pp @ -2.0% yoy, +4.8% mom @ 1.189M saar (beat 1.164e); prior months revised significantly lower
Growth rate:  -3.1 @ +7.1% ytd
[Previously: The future is still so bright; See also: BAML says housing starts will accelerate & return to historical average in 2016/17, but Expect home sales to soften in 2016 due to low inventories]
#Bullish $XHB $ITB

Sentiment

Retail investor sentiment survey (2016.07.21)
by American Association of Individual Investors (AAII)

Sentiment continues its recovery from Brexit’s extreme lows, but remains a neutral signal…Retail investor sentiment survey- bulls & bears 2016.07.21
Bull/Bear ratio: -29bp wow @ 1.33 (above 1.30 historical average, between 1.00 – 1.80 extremes)
Bullish: -1.4pp @ 35.4% (below 39 avg, between 30 – 45 extremes); continues recovery fm 11-year low
Bearish: +2.3pp @ 26.7% (below 30 avg, between 25 – 40 extremes)
Neutral: -0.9pp @ 37.9% (above 31 avg)
Measures respondents’ expectation for equity performance over next 6 months (through 12/2016).
[Previously: Retail allocations remain neutral & Strategist sentiment still a buy signal]
#Neutral #Contrarian #TINA

Global fund manager allocation survey (July 2016)
by Bank of America Merrill Lynch (BAML)

Risk allocations fall to even more extreme lows, maintaining a risk-on buy signal akin to 2011/12’s…
Equity: -2pp @ -1% UW (below +15 & +50 extremes)
Bonds: -1pp @ -35% UW (between -60 & -20 extremes)BAML fund manager allocation survey- equity, fixed income, cash & sectors 2016.07; a 3.5-year high
Cash: +0.1pp @ +5.8% OW (beyond +5.0 extreme high); another new 15-year high
Commodities: +8pp @ -4% UW (between -20 & +12 extremes); a 3.5-year high
Regions:
    US: +24pp @ +9% UW
    Europe: -30pp @ -4% UW
    Japan: +3pp @ +10% OW
    Emerging Markets: +4pp @ +2% UW; a 22-month high
Surveys a sample of 200+ PMs with $700B+ in AUM, asking for portfolio positioning (overweight/underweight) relative to 60/30/10 benchmark.
#Bullish! #Contrarian
#Bearish: #Cash $VNQ $XLK
#Bullish: $GBP $EQU $ACWI

–Romeo

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