Diary of a Financier

Top Newsstuffs (September 19-25)

In Bookshelf on Sun 25 Sep 2016 at 06:45

Top reads from across this week…

Macro

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

Somewhat disappointing report missed expectations, although not as bad as meets the eye, due to slight upward revisions to prior months; the ytd trend remains strong in this economic growth leader…housing-starts-2016-08
Monthly housing starts:  -4.7pp @ +0.9% yoy, -5.8% mom @ 1.142M saar (miss 1.190e); prior months revised up
Growth rate:  -0.6pp @ +6.1% ytd
[Previously: The future is still so bright; See also: BAML says housing starts will accelerate & return to historical average in 2016/17 & Expect home sales to soften in 2016 due to low inventories]
#Neutral $XHB $ITB

Fundamentals

S&P 500 valuation update: Progressing into easy comps (2016.09.17) | Fundamentalis
As the calendar turns toward 2016q4 & 2017q1, SPX enters a couple seasons of easy yoy comps due to China’s collapse & the energy crash (respectively)…
EPS (ntm): -0.31 wow @ $125.85
PE ratio (fw): +0.1 wow @ 17.0x
PEG ratio: -0.5 wow @ 8.0x; compressing as forward growth rate accelerates
Earnings yield: -4bps wow @ 5.87%
EPS growth rate (ntm): +2.08%
; highest since 1/2016
#Neutral #Valuations $SPX $SPY

Technicals

Commitment of Traders (COT): S&P 500 net speculative positioning (2016.09.16) | Commodity Futures Trading Commission (CFTC)
In coordination with last week’s volatility, the excessive net long positioning is pared, returning to its normal range; combine with the bullish signals from institutional & retail sentiment, this eliminates one of the most bearish headwinds for the market (now only seasonality remains through month-end)…SPX futures- net speculative positions (non-commercial longs less shorts) 2016.09.12
Net speculative positioning: -90.1k wow @ +93.5k contracts long (between -150k & +100k extremes)
Measures difference between non-commercial longs & shorts in SPX futures (# contracts) as of Tuesday’s trade date.
[Previously: Net speculative futures positionings send bearish signals]
#Neutral $ES_F $SP_F

Sentiment

Retail investor sentiment survey (2016.09.22)
by The American Association of Individual Investors (AAII)

Sentiment keeps sliding, strengthening an already extreme bullish signal; there’s no better manifestation of investors’ postcrisis PTSD; data collected before the Fed’s decision to defer rate hikes this week…
Bull/Bear ratio: -13bp wow @ 0.65 (below both 1.30 historical average & 1.00 – 1.80 extremes)retail-sentiment-bulls-vs-bears-2016-09-22
Bullish: -3.1pp @ 24.8% (below 39 avg & 30 – 45 extremes); down to lowest level since Brexit
Bearish: +2.4pp @ 38.3% (above 30 avg & between 25 – 40 extremes); highest since the correction 2/2016
Neutral: +0.7pp @ 36.9% (above 31 avg)
Measures respondents’ expectation for equity performance over next 6 months (through 3/2017).
[Previously: Institutional allocations remain a bullish signal & Retail allocations remain neutral]
#Bullish! #Contrarian

–Romeo

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