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Economic News
- Thread starter Spaf
- Start date
Oldcoin
Member
Next week we start off with a bang. On Monday a single economic release will capture the attention of traders. The ISM index will be released at 10 am et. I’ve been using the Chicago PMI as an indicator for the ISM Index, sometimes it has led me astray. Here are how the numbers compare:
Nov Dec Jan Feb Mar
Chicago PMI 51.2 51.6 48.8 47.9 61.7
ISM Index 49.9 51.4 49.3 52.3 52.5 expected
You can see that it was expected that the ISM would decrease last month…but it didn’t. With the large increase in Chicago PMI this month you should expect an increase in the ISM (although not as large). Well at least that’s the theory.
We have some minor releases on Tuesday and Wednesday; Auto and Truck sales and Factory Orders. Thursday Initial Claims before the market opens and then Friday. The employment report comes out on Friday prior to the market open. The report rates an A for importance and with little or no earnings report due the traders will definitely be watching. Links to the calendars.
http://biz.yahoo.com/c/ec/200714.html
http://www.nasdaq.com/asp/econodayframe.asp?page=http://www.nasdaq.com/econoday/index.html
Speaking this week is St. Louis Fed Pres Poole on Monday and Dallas Fed Pres Fisher on Wednesday.
Not much in the way of earnings reports, although we’ve finished the first quarter….where has the year gone? Merix, Best Buy and Circuit City are the notable releases. Circuit City just said they were going to lay off a bunch of people and rehire cheaper. That can’t be good!
Finally Bull and Bear Wise has the meter set at 58.21 up from the 56.72 of last week.
http://www.bullandbearwise.com/
Nov Dec Jan Feb Mar
Chicago PMI 51.2 51.6 48.8 47.9 61.7
ISM Index 49.9 51.4 49.3 52.3 52.5 expected
You can see that it was expected that the ISM would decrease last month…but it didn’t. With the large increase in Chicago PMI this month you should expect an increase in the ISM (although not as large). Well at least that’s the theory.
We have some minor releases on Tuesday and Wednesday; Auto and Truck sales and Factory Orders. Thursday Initial Claims before the market opens and then Friday. The employment report comes out on Friday prior to the market open. The report rates an A for importance and with little or no earnings report due the traders will definitely be watching. Links to the calendars.
http://biz.yahoo.com/c/ec/200714.html
http://www.nasdaq.com/asp/econodayframe.asp?page=http://www.nasdaq.com/econoday/index.html
Speaking this week is St. Louis Fed Pres Poole on Monday and Dallas Fed Pres Fisher on Wednesday.
Not much in the way of earnings reports, although we’ve finished the first quarter….where has the year gone? Merix, Best Buy and Circuit City are the notable releases. Circuit City just said they were going to lay off a bunch of people and rehire cheaper. That can’t be good!
Finally Bull and Bear Wise has the meter set at 58.21 up from the 56.72 of last week.
http://www.bullandbearwise.com/
Oldcoin
Member
Well, so much for that theory 
The numbers came in lower than last months but still over 50 which indicated that manufacturing is expanding. Generally, we have to look at three months data to determine a trend. The data today is somewhat disconcerting on a couple of levels. From Marketwatch:
“Ten of 19 industries were expanding in March, led by apparel, wood products and transportation equipment.
Most of the major subindexes fell in March. The new orders index dropped to 51.6% from 54.9%. The production index fell to 53% from 54.1%. The employment index fell to 48.7% from 51.1%
The prices paid index rose to 65.5% from 59.0%, indicating increased pricing pressures on companies. Firms mentioned higher prices for energy, metals and food.
The inventories index rose to 47.5% from 44.6%, an indication that firms are still cutting their inventories. Customers' inventories were judged as too low for the first time in five months, "which is a possible indication that manufacturers' inventories are nearing satisfactory levels," said Norbert Ore, head of the ISM's survey committee, in a statement.”
So while the overall number is still positive some of the supporting numbers are showing weakness.
The numbers came in lower than last months but still over 50 which indicated that manufacturing is expanding. Generally, we have to look at three months data to determine a trend. The data today is somewhat disconcerting on a couple of levels. From Marketwatch:“Ten of 19 industries were expanding in March, led by apparel, wood products and transportation equipment.
Most of the major subindexes fell in March. The new orders index dropped to 51.6% from 54.9%. The production index fell to 53% from 54.1%. The employment index fell to 48.7% from 51.1%
The prices paid index rose to 65.5% from 59.0%, indicating increased pricing pressures on companies. Firms mentioned higher prices for energy, metals and food.
The inventories index rose to 47.5% from 44.6%, an indication that firms are still cutting their inventories. Customers' inventories were judged as too low for the first time in five months, "which is a possible indication that manufacturers' inventories are nearing satisfactory levels," said Norbert Ore, head of the ISM's survey committee, in a statement.”
So while the overall number is still positive some of the supporting numbers are showing weakness.
350zCommTech
Well-known member
Gee, where have I heard that before? If this trend keeps up, we'll be in a stagflation/recession? Is that even possible?
The word is that unemployment is too low for this to be considered stagflation. Maybe they'll make up a new term. Recflation?
Oldcoin
Member
Gee, did I say that?
Actually, with the economy slowing we should be expecting numbers like this. There is the fear that we will slide into recession; I think there is about 30% chance now (maybe higher). I have read some articles where they think we already started one. I have to agree with Tom, the employment picture is too good right now for Stagflation, although I have heard some rumblings along this line.
Oldcoin
Member
Since we’re throwing the terms around, here is some definitions:
Recession
A significant decline in activity spread across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income and wholesale-retail trade. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country's gross domestic product (GDP).
Recession is a normal (albeit unpleasant) part of the business cycle. A recession generally lasts from six to 18 months.
Interest rates usually fall in recessionary times to stimulate the economy by offering cheap rates at which to borrow money.
Stagflation
A condition of slow economic growth and relatively high unemployment - a time of stagnation - accompanied by a rise in prices, or inflation.
Stagflation occurs when the economy isn't growing but prices are, which is not a good situation for a country to be in. This happened to a great extent during the 1970s, when world oil prices rose dramatically, fueling sharp inflation in developed countries. For these countries, including the U.S., stagnation increased the inflationary effects.
Depression
A severe and prolonged recession characterized by inefficient economic productivity, high unemployment and falling price levels.
In times of depression, consumers' confidence and investments decrease, causing the economy to shut down. The classic example of this occurred in the 1930s, when the Great Depression shook the global economy.
Sorry Tom I couldn't find one for Recflation
, but I like it!
Oldcoin
Member
Weekly chain store sales up 4.9% from year ago: survey
http://tinyurl.com/35e3gb
NEW YORK (MarketWatch) - Chain store sales for the week ended March 31 rose 4.9% from the year-ago period, according to a survey by the International Council of Shopping Centers and UBS Securities released Tuesday. On a week-over-week basis, sales rose 0.3%. "March certainly came in like a lamb but is going out like a lion," said Michael Niemira, ICSC's chief economist. "With Easter fast approaching and the continuation of warmer weather consumers have had the motivation to spend." For March, ICSC expects reported sales to grow by 4% to 5% as the earlier Easter holiday boosts March performance at the expense of April.
http://tinyurl.com/35e3gb
NEW YORK (MarketWatch) - Chain store sales for the week ended March 31 rose 4.9% from the year-ago period, according to a survey by the International Council of Shopping Centers and UBS Securities released Tuesday. On a week-over-week basis, sales rose 0.3%. "March certainly came in like a lamb but is going out like a lion," said Michael Niemira, ICSC's chief economist. "With Easter fast approaching and the continuation of warmer weather consumers have had the motivation to spend." For March, ICSC expects reported sales to grow by 4% to 5% as the earlier Easter holiday boosts March performance at the expense of April.
Oldcoin
Member
Pending Sales of Existing Homes in U.S. Rise 0.7% in February
By Shobhana Chandra
April 3 (Bloomberg) -- More Americans signed contracts to buy previously owned homes in February, easing concern the real- estate market will worsen.
The index of signed purchase agreements, or pending home resales, rose 0.7 percent to 109.3, after a revised 4.2 percent drop in January, the National Association of Realtors said today in Washington. The index was down 8.5 percent from February 2006.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aQ6nlIWaRVlE&refer=home
By Shobhana Chandra
April 3 (Bloomberg) -- More Americans signed contracts to buy previously owned homes in February, easing concern the real- estate market will worsen.
The index of signed purchase agreements, or pending home resales, rose 0.7 percent to 109.3, after a revised 4.2 percent drop in January, the National Association of Realtors said today in Washington. The index was down 8.5 percent from February 2006.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aQ6nlIWaRVlE&refer=home
Oldcoin
Member
Mortgage woes seen holding U.S. growth "below trend"
By Jim Christie Mon Apr 2, 6:10 AM ET
SAN FRANCISCO (Reuters) - A credit crunch stemming from turmoil in the subprime mortgage market will trigger further weakness in housing and keep U.S. economic growth "below trend" most of this year, a UCLA Anderson Forecast unit said in a report on Monday.
The sluggish growth will help clear the way for the Federal Reserve to ease monetary policy at the end of the second quarter despite a historically low 4.5 percent unemployment rate, the economic forecasting unit said in its report.
http://news.yahoo.com/s/nm/20070402/bs_nm/economy_usa_forecast_dc;_ylt=AmDwsEanDdjdPpJn_fa7rL_v5rEF
I don’t know about their forecast for the Fed to cut rates. It’s going to have to get much worse before that happens. The economy has slowed, but employment reports have been strong and inflation is still higher (albeit fairly benign by many standards) and the ISM still showing some growth. The Feds primary concern is inflation, just look at what Poole had to say yesterday;
St. Louis Federal Reserve Bank President William Poole said yesterday he would have a ``high hurdle'' for favoring interest- rate cuts should inflation stay near the current pace.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a21aGglxe9NA
But as the guy who fell out of a sky scraper was heard to say as he pasted each floor on the way down; “So far, So good.”
By Jim Christie Mon Apr 2, 6:10 AM ET
SAN FRANCISCO (Reuters) - A credit crunch stemming from turmoil in the subprime mortgage market will trigger further weakness in housing and keep U.S. economic growth "below trend" most of this year, a UCLA Anderson Forecast unit said in a report on Monday.
The sluggish growth will help clear the way for the Federal Reserve to ease monetary policy at the end of the second quarter despite a historically low 4.5 percent unemployment rate, the economic forecasting unit said in its report.
http://news.yahoo.com/s/nm/20070402/bs_nm/economy_usa_forecast_dc;_ylt=AmDwsEanDdjdPpJn_fa7rL_v5rEF
I don’t know about their forecast for the Fed to cut rates. It’s going to have to get much worse before that happens. The economy has slowed, but employment reports have been strong and inflation is still higher (albeit fairly benign by many standards) and the ISM still showing some growth. The Feds primary concern is inflation, just look at what Poole had to say yesterday;
St. Louis Federal Reserve Bank President William Poole said yesterday he would have a ``high hurdle'' for favoring interest- rate cuts should inflation stay near the current pace.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a21aGglxe9NA
But as the guy who fell out of a sky scraper was heard to say as he pasted each floor on the way down; “So far, So good.”
Show-me
Well-known member
Oldcoin
Member
No no don't tell me......I know....it was the triple play combo for the old 1933 Chicago Leland Giants? Grounder to Milk at short underhand to OJ at second and over to Gas at First. Well it sounded good. Sorry, its spring
Amazing what the last 10 years has done to prices. When you inject an increase into the economy like whats happened with gasoline all prices adjust to reflect the additional cost and we pay.
Oldcoin
Member
U.S. MBA's Mortgage Applications Index Fell 3.2% Last Week
By Shobhana Chandra
April 4 (Bloomberg) -- Mortgage applications in the U.S. fell for the third consecutive week as purchases cooled and fewer homeowners refinanced, an industry report showed today.
The Mortgage Bankers Association's index of applications to buy a home or refinance a loan dropped 3.2 percent last week to 649.5 from the prior week. Home-purchase applications and refinancing both declined to the lowest levels in five weeks.
http://www.bloomberg.com/apps/news?pid=20601170&sid=aBU4bG709pZs&refer=home
Okay, Mortgage application index down, but pending home sales rose 7%. Must be that the refi market is way off. You would think that with the subprime mess there would be a stampede to get out from under those notes.
This is where the squeeze comes in, with declining home values and tightening loan standards many are unable to get out from under the note.
Now you have a foreclosure.
350zCommTech
Well-known member
Oldcoin
Member
That's .7% and not 7%.
Thanks 350z. I could make a remark about my glasses...but I'll take the hit on this one.
Oldcoin
Member
U.S. ISM Services Index Falls in March as Costs Rise (Update2)
By Shobhana Chandra
April 4 (Bloomberg) -- Service industries in the U.S. expanded at a slower rate last month as costs increased, raising concern the housing slump is spilling over into other parts of the economy.
The Institute for Supply Management's index of non- manufacturing businesses including banks, builders and retailers slid to 52.4, the lowest in almost four years, from February's 54.3, Tempe, Arizona-based ISM said today. Readings above 50 point to growth in services.
The slowdown in services, which make up almost 90 percent of the economy, raises doubt about the economy's ability to keep expanding at the ``moderate'' pace forecast by the Federal Reserve. Consumer demand is softening as rising defaults on subprime mortgages deepen the housing slump. Manufacturing growth also slowed last month.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a1TLUMznkg78&refer=home
By Shobhana Chandra
April 4 (Bloomberg) -- Service industries in the U.S. expanded at a slower rate last month as costs increased, raising concern the housing slump is spilling over into other parts of the economy.
The Institute for Supply Management's index of non- manufacturing businesses including banks, builders and retailers slid to 52.4, the lowest in almost four years, from February's 54.3, Tempe, Arizona-based ISM said today. Readings above 50 point to growth in services.
The slowdown in services, which make up almost 90 percent of the economy, raises doubt about the economy's ability to keep expanding at the ``moderate'' pace forecast by the Federal Reserve. Consumer demand is softening as rising defaults on subprime mortgages deepen the housing slump. Manufacturing growth also slowed last month.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a1TLUMznkg78&refer=home
Oldcoin
Member
Service sector data depicts slowing U.S. economy
NEW YORK (Reuters) - Growth in the dominant U.S. service sector fell to a four-year low last month while the job market showed only modest improvement, according to reports on Wednesday that reinforced views of a weakening economy.
http://news.yahoo.com/s/nm/20070404/bs_nm/usa_economy_dc_1
NEW YORK (Reuters) - Growth in the dominant U.S. service sector fell to a four-year low last month while the job market showed only modest improvement, according to reports on Wednesday that reinforced views of a weakening economy.
http://news.yahoo.com/s/nm/20070404/bs_nm/usa_economy_dc_1
Oldcoin
Member
Feb factory orders up less-than-expected 1 pct
WASHINGTON (Reuters) - New orders at U.S. factories rose a weaker-than-expected 1.0 percent in February as orders for machinery and metals fell, a Commerce Department report showed on Wednesday.
http://news.yahoo.com/s/nm/20070404/bs_nm/usa_economy_factories_dc;_ylt=AuEZ9wYdv1Xsnj5kfIfN8kTv5rEF
WASHINGTON (Reuters) - New orders at U.S. factories rose a weaker-than-expected 1.0 percent in February as orders for machinery and metals fell, a Commerce Department report showed on Wednesday.
http://news.yahoo.com/s/nm/20070404/bs_nm/usa_economy_factories_dc;_ylt=AuEZ9wYdv1Xsnj5kfIfN8kTv5rEF
Oldcoin
Member
Contrarian Chronicles4/2/2007 12:01 AM ET
Dead-fish analysts are still hooked
Almost all the news is bad -- look at the latest reading of the leading economic indicators -- but these pundits keep swimming in the ebbing tide of blind optimism and denial.
By Bill Fleckenstein
"It's Soooooo Obvious." That's how I headlined my daily column on my Web site last Tuesday. I was referring to the data points that have been signaling the onset of recession, but which continue to elude stock -- and especially tech stock -- bulls.
Ringing the recession bell
Among the mounds of data they have willingly ignored was the most recent negative reading on the leading economic indicators (LEI). Here is how Paul Kasriel of Northern Trust discussed the implications in a report last week:
"If we don't see revisions to the January and February numbers, then in order for the first quarter to be positive, it (March) would have to increase 1.7%. We have not seen an increase anywhere near that magnitude in the last couple of years. (That matters) because a year-over-year contraction in the quarterly average LEI has heralded every recession since that of 1960, yielding only one false signal."
Kasriel also said that "after the first quarterly year-over-year change in the LEI is negative, successive quarters are also negative." In other words, the LEI has not given any head fakes after it first signals recession. As regular readers will note, his observations dovetail exactly with mine, which are based on what the cracking of the housing ATM means.
http://articles.moneycentral.msn.co...hronicles/DeadFishAnalystsAreStillHooked.aspx
Dead-fish analysts are still hooked
Almost all the news is bad -- look at the latest reading of the leading economic indicators -- but these pundits keep swimming in the ebbing tide of blind optimism and denial.
By Bill Fleckenstein
"It's Soooooo Obvious." That's how I headlined my daily column on my Web site last Tuesday. I was referring to the data points that have been signaling the onset of recession, but which continue to elude stock -- and especially tech stock -- bulls.
Ringing the recession bell
Among the mounds of data they have willingly ignored was the most recent negative reading on the leading economic indicators (LEI). Here is how Paul Kasriel of Northern Trust discussed the implications in a report last week:
"If we don't see revisions to the January and February numbers, then in order for the first quarter to be positive, it (March) would have to increase 1.7%. We have not seen an increase anywhere near that magnitude in the last couple of years. (That matters) because a year-over-year contraction in the quarterly average LEI has heralded every recession since that of 1960, yielding only one false signal."
Kasriel also said that "after the first quarterly year-over-year change in the LEI is negative, successive quarters are also negative." In other words, the LEI has not given any head fakes after it first signals recession. As regular readers will note, his observations dovetail exactly with mine, which are based on what the cracking of the housing ATM means.
http://articles.moneycentral.msn.co...hronicles/DeadFishAnalystsAreStillHooked.aspx
Show-me
Well-known member
AP
Consumer Confidence Falls for 2nd Month
Friday April 6, 4:17 am ET
By Jeannine Aversa, AP Economics Writer High Gas Prices, Housing Slump and Stock Market Turbulence Undermine Consumer Confidence
WASHINGTON (AP) -- Consumer confidence sank to a six-month low as higher gasoline prices, a housing slump and stock market turbulence made people fret more about the economy. The RBC Cash index showed confidence dropping to 85.4 in April. That was down from 92.3 in March. The new reading was the lowest since 83.1 in October. The index is based on the results of the international polling firm Ipsos.
http://biz.yahoo.com/ap/070406/ipsos_consumer_confidence.html?.v=5
Consumer Confidence Falls for 2nd Month
Friday April 6, 4:17 am ET
By Jeannine Aversa, AP Economics Writer High Gas Prices, Housing Slump and Stock Market Turbulence Undermine Consumer Confidence
WASHINGTON (AP) -- Consumer confidence sank to a six-month low as higher gasoline prices, a housing slump and stock market turbulence made people fret more about the economy. The RBC Cash index showed confidence dropping to 85.4 in April. That was down from 92.3 in March. The new reading was the lowest since 83.1 in October. The index is based on the results of the international polling firm Ipsos.
http://biz.yahoo.com/ap/070406/ipsos_consumer_confidence.html?.v=5
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