Diary of a Financier

Top Newsstuffs (January 23-29)

In Bookshelf on Sun 29 Jan 2017 at 06:23

Top reads from across the past week…

Macro

Gross Domestic Product (First estimate, 2016q4)
by Bureau of Economic Analysis (BEA)

After last quarter’s significant acceleration, Q4 underwhelmed expectations; net exports weighed significantly (as expected); growth was again aided by a meaningful tailwind from the re-stocking of Inventories (as expected after a stretch of drawdowns)…
Real GDP (Q3): -1.6pp sequentially @ +1.9% qoq saar (miss +2.2e)Real GDP 2016q4i
    Inflation: Core +2.1%; Headline +1.7%
    Consumption (PCE): -0.5pp @ +2.5%
    Investment: +7.7pp @ 10.7%; Residential +10.2%; Nonresidential +2.4%
    Government spending: +0.4pp @ +1.2%; Federal -1.2%; State & local +2.6%
    Exports: -14.3pp @ -4.3%
    Imports: +6.1pp @ +8.3%
    Inventories: +1.00pp contribution to GDP growth rate
Real GDP per capita (Q4): -1.7pp @ +1.0% yoy; 10.0% below LT regression trend
Real GDP (2016FY): +1.6% yoy
Real GDP (2015FY): unch @ +2.6% yoy
Real GDP (2014FY): unch @ +2.4% yoy
Real GDP (2013FY): unch @ +1.7% yoy
#Neutral

Manufacturers’ durable & capital goods (December 2016)
by US Department of Commerce

This report continues the trend recovery, with yoy comps surging into expansion; even capex found its footing after struggling for years with the mining/energy bust; after a much-needed drawdown in inventories, there should be a slight tailwind in coming months…
Core durable goods (ex-transportation)Core durable goods & capex- new orders (% change yoy) 2016.12
    Orders: +1.7pp @ +3.5% yoy, +0.5% mom (meet +0.5e)
Core capex (capital goods, ex-defense & aircraft)
    Orders: +6.2pp @ +2.8% yoy, +0.8% mom
Core inventory (ex-transportation)
    Inventories: +0.6pp @ -0.6% ytd, +0.2% mom
#Neutral #Contraction $XLI

Sentiment

Retail investor sentiment survey (2017.01.26)
by The American Association of Individual Investors (AAII)

Sentiment continued to wane, plunging into extreme territory worthy of a bull signal…
Bull/Bear ratio: -19bps wow @ 0.94 (below 1.30 historical average & 1.00 – 1.80 extremes)
Bullish: -5.4pp @ 31.6% (below 39 avg, between 30 – 45 extremes)Retail investor sentiment- bulls & bears 2017.01.12
Bearish: +0.8pp @ 33.5% (above 30 avg, between 25 – 40 extremes)
Neutral: +4.6pp @ 34.9% (below 31 avg)
Measures respondents’ expectation for equity performance over next 6 months (through 7/2017).
[Previously: Retail allocations remain neutral & Institutional allocations remain neutral]
#Bullish #Contrarian

–Romeo

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