This Week's Message: A Walk Through the Data

We just finished our weekly scoring of the PWA Macro Index and would like to show clients what we're seeing; which in the aggregate illustrates why, for the time being, we remain cautious.

Click each insert to enlarge....

First, here's the graph of our index itself since inception:



And here's a look at back-tests (scores plotted along the S&P 500 Index) at key points from 1997 to current. Red shaded areas denote past recessions:



The following includes charts for the lion's share of the data we formally track each week (believe it or not there's a ton more that we track "less formally"). 

RETAIL SALES


AUTO SALES


CONSUMER SPENDING


PERSONAL INCOME


HOUSEHOLD NET WORTH


CONSUMER DEBT


CONSUMER DEBT SERVICE RATIO


WEEKLY MORTGAGE APPS


HOUSING STARTS


HOUSING PERMITS


CONSUMER CONFIDENCE


HOMEBUILDER CONFIDENCE


WEEKLY JOBLESS CLAIMS


MONTHLY JOBS DATA


INSTITUTE FOR SUPPLY MANAGEMENT SURVEYS
SERVICES, MANUFACTURING


SMALL BUSINESS OPTIMISM


SMALL BUSINESS HIRING PLANS


SMALL BUSINESS CAPITAL EXPENDITURES PLANS


INDUSTRIAL PRODUCTION


DURABLE GOODS ORDERS/DURABLE GOODS ORDERS EX-TRANSPORTATION


CAPITAL INVESTMENT


CORPORATE FINANCING GAP


COMMERCIAL AND INDUSTRIAL LOANS


COMMERCIAL PAPER ISSUANCE/COMMERCIAL PAPER RATES


TRUCK TONNAGE


RAIL TRAFFIC


CASS FREIGHT SHIPMENTS AND EXPENDITURES


CHEMICAL ACTIVITY INDEX


CATERPILLAR GLOBAL SALES


GLOBAL PURCHASING MANAGERS INDEX


ATLANTA FED GDP NOW


LEADING INDICATORS/COINCIDENT INDICATORS RATIO


CHICAGO FED NAT'L ACTIVITY INDEX


ECONOMIC SURPRISE INDEX: U.S., EZ, JAPAN, CHINA, EM


GENERAL INFLATION DATA


NY FED UNDERLYING INFLATION INDEX


CAPACITY UTILIZATION (INFLATION IMPLICATIONS)


INFLATION BREAK EVENS


BLOOMBERG COMMODITY INDEX


INDUSTRIAL MATERIALS PRICES


COPPER PRICE


BALTIC DRY INDEX


2-YR TREASURY/FED FUNDS SPREAD


TED SPREAD


TREASURY YIELD CURVES


SWAP SPREAD


HIGH YIELD CREDIT SPREAD


CHICAGO FED FINANCIAL CONDITIONS INDEX


ST. LOUIS FED FINANCIAL STRESS INDEX


KC FED FINANCIAL STRESS INDEX


ML GLOBAL FINANCIAL STRESS INDEX


GLOBAL CDS SPREADS


AAII INDIVIDUAL INVESTOR SENTIMENT (CONTRARIAN INDICATOR)


ADVISER SENTIMENT NOW (CONTRARIAN INDICATOR)


INSTITUTIONAL ANALYSTS' GLOBAL SENTIMENT


SHORT INTEREST (COMPLACENT)


STOCKS/BONDS COMMITMENT OF TRADERS REPORTS (STOCKS COMPLACENT)


SKEW INDEX (COMPLACENT)


VIX CURVE (WIDENING 1-2/3 MONTH SPREAD)


PUT/CALL RATIO


SECTOR/SPX RATIOS


SPX/BONDS RATIO


STAPLES/DISCRETIONARY RATIO


MONEY FUND ASSETS


INTEREST RATE SENSITIVITY


VALUATION US/FOREIGN


S&P 500/S&P 500 EQUAL WEIGHT COMPARISON


S&P 500 ADVANCE/DECLINE LINE


% OF STOCKS TRADING ABOVE 50-DAY MOVING AVERAGE


% OF STOCKS TRADING ABOVE 200-DAY MOVING AVERAGE


Bottom Line: The consumer's hanging in there, business data are suspect, inflation is tame, commodities look scary, financial stress in the system is on balance rising, and financial markets are sending very mixed signals. I.e., conditions may not yet be stormy, but clouds are definitely forming...

Have a great weekend!
Marty