Thursday, August 3, 2017

This Week's Message: From our July Trends File...

Here's a chronological look at our titles (which include our summary assessments) of the various data points that found their way into our July 2017 "Current Trends" file. I'll add long-term implication color-coding (where clearly applicable).

The key takeaway being, on balance, the global economy looks pretty good.

Just shoot me an email if you'd like to see the graph/commentary under a heading:
  • Entering historically worst season of the year; July, August, September.
  • Historically-speaking, the Nasdaq 100 breaking below its 50 dma (while not a reliable long-term indicator) doesn't bode well for the next 3 months.
  • Despite last week's selloff, tech leads sectors year-to-date
  • Japan surveys suggest a solid economy presently
  • Northeast Asia PMIs basically mixed, but not at all concerning
  • While most Euro-area PMIs missed expectations, all in all, the region's economy looks solid
  • U.S. Markit Manuf PMI lackluster
  • ISM Manuf Index very strong!
  • GM's June numbers missed expectations
  • Ford's June sales beat estimates
  • While the Eurozone economy picks up, inflation pressures simply don't yet exist, leaving the ECB free to stay easy
  • Australia trade numbers very strong! Explained largely by commodity price bounce, as well as global demand
  • Global developed market PMIs are showing expansion across the board. Emerging Mkts is where there's some weakness.
  • Fed minutes confirm mixed views among voting members. Staff ups their growth projections. Roll-off likely beginning later this year
  • Factory order data points to continued broad growth at reasonable pace
  • June ISM Services Index beat expectations
  • U.S. export growth denotes improving global economy
  • Commodity prices higher
  • China foreign reserves up
  • Canada's jobs numbers best in 7 years
  • Very strong industrial production out of Eurozone
  • UK economy not looking so good
  • Brexit is clearly bad news for Britain's economy
  • Financials and Industrials took the weekly lead, last week
  • ISMs point to a solid economy going forward
  • Commentary from ISMs speak of optimism going forward
  • Mixed inflation signals
  • Late day buying suggests the smart money is comfortable with equities
  • German industrial production surges 
  • China's CDS spreads at 4-year low
  • Consumer Discretionary stocks seeing high short interest heading into earnings season
  • Credit growth slowing in Australia
  • Italy's industrial production beat expectations
  • Next few decades will see electric cars take over
  • Britain is the one country not markedly benefiting from Europe's economy
  • Canada's central bank bumps benchmark rate a quarter point
  • Canadian dollar rallies on rate hike
  • Consumer sentiment losing some steam, but not in a concerning manner at this point
  • Australian stocks looking up on soft central bank
  • Emerging Mkts rallying presumably on the Fed.. I suppose so, but I think the present setup transcends merely the Fed.
  • University of Michigan preliminary consumer sentiment off, but overall remains optimistic
  • U.S. industrial production beat expectations. Cap utilization above 76% (high for recent past, but not historically inflationary)
  • U.S. breakeven price for a barrel of oil falling
  • U.S. stock market breakout and successful retest sets up very well for extended gains
  • Monthly MACD looks very bullish here
  • New York Stock Exchange Index has successfully tested its 50 day moving average
  • While the retail sales number was off in June, the internals were actually pretty good
  • China data impressive
  • ZEW econ sentiment survey shows growing optimism in major EU countries (although Germany slipped a bit) and Japan. U.S. notably slipping however.
  • Foreign buying of treasuries stabilizing lately
  • Housing data says good things about the economy
  • Philadelphia area capex plans highest in 33 years!
  • Oil looks technically and fundamentally better. Energy stocks look technically good.
  • Regional surveys, on balance, suggest capex will grow going forward
  • The Bank of Japan looks to remain dovish going forward
  • The European Central Bank to stay dovish (there's dissent within however) in the face of a growing economy... lack of inflation inspires it.
  • Hugely strong tech sector breadth bodes well for returns going forward
  • Multinationals benefitting from weaker dollar
  • Japanese investors are extremely bullish on India's stocks
  • Speculators are very bearish on the dollar
  • A much stronger Euro becomes problematic for Euro company earnings
  • Euro Stoxx 50 lags global peers as Euro strengthens
  • While remaining in expansion mode, flash manuf PMIs among developed nations (with the exception of France), show waning optimism
  • There's optimism within Emerging Mkts earnings outlook
  • Muni bonds look expensive
  • Halliburton says U.S. may slow rig count growth as price stays below $50
  • While Eurozone optimism, per the PMIs, may be peaking, growth momentum is very much intact
  • Fed model shows a tightening bias for now
  • Caterpillar seeing very good numbers!
  • 3m disappoints on estimates
  • Bank of Japan's newest members have no interest in walking back easing
  • Shale producers are cutting back, this could a spark for a second half rebound (energy)
  • Business sentiment remains strong in Europe
  • China's growth outlook improving, allowing policymakers a window to curb excessive and speculative borrowing
  • Swelling Emerging Mkt debt could exacerbate market moves should there be a shock
  • Lack of EM distressed debt adds to the potential fallout story
  • Treasury VIX action says traders are very sanguine
  • Hedge funds are extremely short the dollar
  • Key takeaways from today's oil inventory report are, on balance, bullish for the price
  • Russia sees fastest economic growth in 5 years
  • The Richmond Fed Manuf Survey was, on balance, quite good
  • Conference Board's Consumer Confidence came in much better than expected
  • European oil companies are seeing their best performance since the plunge in prices 3 years ago
  • Rising commodity prices measurably helping China
  • German consumer confidence at an all-time high, Spain data looks very impressive, Sweden just okay, Eurozone credit growth falls.
  • The world is warming up to China, per the Yuan's pickup in global payments
  • Homeownership rising thanks to what was record high rents and low vacancies
  • Copper looking very strong technically. It, and iron ore dynamics appear healthier
  • French consumer sentiment fell markedly, while Italian economic sentiment hits its strongest since the crisis
  • Fund manager U.S. equity positioning -- lack thereof -- favors U.S. equities going forward
  • Fund managers' lack of U.S. exposure relative to foreign equities counterintuitively favors U.S. equities going forward
  • Heavy European equity positioning among funds, relative to U.S., hurts European equity prospects (counterintuitively) going forward. However, I'm not yet in that camp
  • Fund managers heavy EM exposure speaks (counterintuitively) negative about their prospects. Too soon to get bearish, however, in my view
  • Fund managers are underweight global bonds. While that would be a contrarian buy signal, I think they're right this time
  • Fund managers high cash levels bullish for stocks going forward
  • Gold stuck in long-term triangle... looking to break out... I'd take the short side of that trade
  • India central bank likely to cut a quarter point next week
  • South Korea industrial production missed badly, despite positive PMI. Japan unemployment at cycle lows. Japan's household spending strongest since 2014.
  • Europe overall, save for Britain, looks good economically
  • One analyst sees this stubbornly low volatility as a ticking timebomb. However, there's lots of data to dispute his opinion...
  • Traders are shorting Emerging Mkt bonds big time. Fits my view of a rising dollar and higher U.S. rates going forward
  • Bank of Russia likely on pause for now due to low inflation and weak Ruble.. However, economists see more easing in second half
  • The potential fallout when the ECB cuts QE should be negated by reinvestment, as it was with the Fed
  • Durable goods surged, but it was all about Boeing. Ex-aircraft the report was very mixed.\
  • The Eurozone's credit impulse suggest the ECB won't go near raising rates until 2019
  • The Euro looks overbought here
  • Earnings guidance spread looks very strong at this point in earnings season
  • Housing data has missed of late, but not dramatically. Positive setup remains
  • Jobless claims continue to point to a very healthy labor market
  • Consume confidence spiked higher in July
  • Q2 GDP's first estimate looks sold enough, prospects good for second half



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