Diary of a Financier

Top Newsstuffs (September 25 – October 1)

In Bookshelf on Sun 1 Oct 2017 at 05:25

Top reads from across the past week…


Personal income & outlays (August 2017)
by The Bureau of Labor Statistics (BLS)

Having bucked cascading decelerations last month, spending and income maintain their underwhelming velocities; headline data missed expectations; expect their growth rates to recouple in coming months, as yoy comps get progressively easier for DPI and harder for PCE through year end…Real DPI and PCE 2017.08
Disposable personal income (Real DPI): unch @ +1.2% yoy, -0.1% mom; prior months revised slightly lower
Personal consumption expenditures (Real PCE): -0.1pp @ +2.5% yoy, -0.1% mom; prior months revised slightly lower
Personal savings rate: unch @ +3.6%; prior month revised slightly higher
Consumer spending accounts for ~70% of US GDP, as this report is a broader measure than the Retail Sales reported earlier this month.
[Previously: Retail sales remain bullish]
#Neutral $XLY #Wages

Consumer confidence survey (September 2017)
by Conference Board

Sentiment moderates a bit, but remains hot, near 16-year highs, although last month’s postcrisis high was revised down significantly; respondents from Texas and Florida weighed heavily on the data (due to Hurricanes Harvey and Irma)…
Consumer confidence index: -0.6 mom @ 119.8 (miss 120.2e); 90th percentile of historical data
[Previously: Retail sales remain bullish]
#Bullish! $XLY

Manufacturers’ durable & capital goods (August 2017)
by US Department of Commerce

Growth gets faster as orders meet expectations with everything accelerating nicely; still expect decelerations down from these above-trend velocities, considering the tapering of easy yoy comps into year-end…
– Core durable goods, new orders (ex-transportation): +0.5pp @ +6.1% yoy, +0.2% mom (meet +0.2e)
– Core capex, new orders (capital goods, ex-defense & aircraft): +0.1pp @ +3.6% yoy, +0.9% mom
– Core inventory (ex-transportation): +0.3pp @ +4.5% ytd, +0.5% mom
#Bullish! $XLI

Gross Domestic Product (Third estimate, 2017q2)
by Bureau of Economic Analysis (BEA)

Good report meets expectations right near trend growth; consumption and net exports outperformed higher-frequency data, likely aided by weak dollar at quarter-end, although yoy comps get harder though Q4; prior quarter was revised down slightly, but the bigger news is nice upward revisions to prior years…
Real GDP (Q2): revised +0.1pp @ +3.1% qoq saar (meet +3.1e)
    Inflation: Core +1.7%; Headline +1.7%
    Consumption (PCE): unch @ +3.3%
    Investment: +0.3pp @ +3.9%; Residential -7.3%; Nonresidential +6.7%
    Government spending: +0.8pp @ -0.2%; Federal +1.9%; State & local -1.5%
    Exports: -0.2pp @ +3.5%
    Imports: -0.1pp @ +1.5%
    Inventories: +0.12pp contribution to GDP growth rate
Real GDP per capita (Q2): +0.11pp @ 2.41% yoy; 9.5% below LT regression trend
Real GDP (2016FY): +1.5% yoy
Real GDP (2015FY): +2.9% yoy
Real GDP (2014FY): +2.6% yoy
Real GDP (2013FY): +1.7% yoy


Credit (BEARISH)


Fundamentals (BULLISH)


Valuations (NEUTRAL)


Sentiment (BULLISH)

Retail investor sentiment survey (2017.09.28)
by The American Association of Individual Investors (AAII)

After a couple volatile whipsaws, sentiment remains a neutral signal, dropping below its historical average, albeit within a normal range…
Bull/Bear ratio: -31bps wow @ 1.16 (below 1.30 historical average, within 1.00 – 1.80 extremes)
Bullish: -6.8pp @ 33.3% (below 39 avg, within 30 – 45 extremes)
Bearish: +1.5pp @ 28.7% (below 30 avg, within 25 – 40 extremes)
Neutral: +5.3pp @ 37.9% (above 31 avg, below 40 extreme)
Measures respondents’ expectation for equity performance over next 6 months (through 3/2018).
[Previously: Retail allocations remain neutral, Institutional allocations maintain bullish signal for US riskStrategists’ consensus remains a neutral signal & Quantifying the “wall of worry”]
#Neutral #Contrarian


Technicals (NEUTRAL)





Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s