Thursday, January 19, 2017

Chicago Fed National Financial Conditions Index (NFCI)

The St. Louis Fed’s Financial Stress Index (STLFSI) is one index that is supposed to measure stress in the financial system.  Its reading as of the January 19, 2017 update (reflecting data through January 13, 2017) is -1.210.
Of course, there are a variety of other measures and indices that are supposed to measure financial stress and other related issues, both from the Federal Reserve as well as from private sources.
Two other indices that I regularly monitor include the Chicago Fed National Financial Conditions Index (NFCI) as well as the Chicago Fed Adjusted National Financial Conditions Index (ANFCI).
Here are summary descriptions of each, as seen in FRED:
The National Financial Conditions Index (NFCI) measures risk, liquidity and leverage in money markets and debt and equity markets as well as in the traditional and “shadow” banking systems. Positive values of the NFCI indicate financial conditions that are tighter than average, while negative values indicate financial conditions that are looser than average.
The adjusted NFCI (ANFCI). This index isolates a component of financial conditions uncorrelated with economic conditions to provide an update on how financial conditions compare with current economic conditions.
For further information, please visit the Federal Reserve Bank of Chicago’s web site:
Below are the most recently updated charts of the NFCI and ANFCI, respectively.
The NFCI chart below was last updated on January 19, 2017 incorporating data from January 5,1973 through January 13, 2017, on a weekly basis.  The January 13, 2017 value is -.78:
NFCI
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed January 19, 2017:
The ANFCI chart below was last updated on January 19, 2017 incorporating data from January 5,1973 through January 13, 2017, on a weekly basis.  The January 13 value is -.18:
ANFCI
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed January 19, 2017:
_________
I post various indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with what they depict or imply.
_____
The Special Note summarizes my overall thoughts about our economic situation
SPX at 2266.88 as this post is written

Wednesday, January 18, 2017

Trends Of S&P500 Earnings Forecasts

S&P500 earnings trends and estimates are a notably important topic, for a variety of reasons, at this point in time.
FactSet publishes a report titled “Earnings Insight” that contains a variety of information including the trends and expectations of S&P500 earnings.
For reference purposes, here are two charts as seen in the “Earnings Insight” (pdf) report of January 13, 2017:
from page 20:
(click on charts to enlarge images)
2016 and 2017 S&P500 earnings trends
from page 21:
S&P500 Annual Earnings
_____
I post various economic forecasts because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not agree with many of the consensus estimates and much of the commentary in these forecast surveys.
_____
The Special Note summarizes my overall thoughts about our economic situation
SPX at 2271.89 as this post is written

S&P500 EPS Annual Estimates For Years 2016 Through 2018

As many are aware, Thomson Reuters publishes earnings estimates for the S&P500.  (My other posts concerning S&P earnings estimates can be found under the S&P500 Earnings label)
The following estimates are from Exhibit 20 of the “S&P500 Earnings Scorecard” (pdf) of January 17, 2017, and represent an aggregation of individual S&P500 component “bottom up” analyst forecasts.  For reference, the Year 2014 value is $118.78/share and the Year 2015 value is $117.46:
Year 2016 estimate:
$118.02/share
Year 2017 estimate:
$132.66/share
Year 2018 estimate:
$148.60/share
_____
I post various economic forecasts because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not agree with many of the consensus estimates and much of the commentary in these forecast surveys.
_____
The Special Note summarizes my overall thoughts about our economic situation
SPX at 2267.89 as this post is written

Standard & Poor’s S&P500 Earnings Estimates For 2016 & 2017 – As Of January 12, 2017

As many are aware, Standard & Poor’s publishes earnings estimates for the S&P500.  (My posts concerning their estimates can be found under the S&P500 Earnings label)
For reference purposes, the most current estimates are reflected below, and are as of January 12, 2017:
Year 2016 estimates add to the following:
-From a “bottom up” perspective, operating earnings of $108.82/share
-From a “top down” perspective, operating earnings of N/A
-From a “bottom up” perspective, “as reported” earnings of $99.26/share
Year 2017 estimates add to the following:
-From a “bottom up” perspective, operating earnings of $130.78/share
-From a “top down” perspective, operating earnings of N/A
-From a “bottom up” perspective, “as reported” earnings of $122.13/share
Year 2018 estimates add to the following:
-From a “bottom up” perspective, operating earnings of $147.27/share
-From a “top down” perspective, operating earnings of N/A
-From a “bottom up” perspective, “as reported” earnings of N/A
_____
I post various economic forecasts because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not agree with many of the consensus estimates and much of the commentary in these forecast surveys.
_____
The Special Note summarizes my overall thoughts about our economic situation
SPX at 2267.89 as this post is written

Tuesday, January 17, 2017

Disturbing Charts (Update 25)

I find the following charts to be disturbing.   These charts would be disturbing at any point in the economic cycle; that they (on average) depict such a tenuous situation now – 91 months after the official (as per the September 20, 2010 NBER BCDC announcement) June 2009 end of the recession – is especially notable.
These charts raise a lot of questions.  As well, they highlight the “atypical” nature of our economic situation from a long-term historical perspective.
All of these charts are from the Federal Reserve, and represent the most recently updated data.
(click on charts to enlarge images)
Housing starts (last updated 12-16-16):
Housing Starts
US. Bureau of the Census, Housing Starts: Total: New Privately Owned Housing Units Started [HOUST], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/HOUST/, January 16, 2017.
The Federal Deficit (last updated 1-9-17):
The Federal Deficit
US. Office of Management and Budget, Federal Surplus or Deficit [-] [FYFSD], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/FYFSD/, January 16, 2017.
Federal Net Outlays (last updated 1-9-17):
Federal Outlays
US. Office of Management and Budget, Federal Net Outlays [FYONET], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/FYONET/, January 16, 2017.
State & Local Personal Income Tax Receipts  (% Change from Year Ago)(last updated 7-29-16):
US. Bureau of Economic Analysis, State and local government current tax receipts: Personal current taxes: Income taxes [ASLPITAX], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/ASLPITAX/, January 16, 2017.
Total Loans and Leases of Commercial Banks (% Change from Year Ago)(last updated 1-13-17):
total loans and leases
Board of Governors of the Federal Reserve System (US), Loans and Leases in Bank Credit, All Commercial Banks [TOTLL], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/TOTLL/, January 16, 2017.
Bank Credit – All Commercial Banks (% Change from Year Ago)(last updated 1-13-17):
Total Bank Credit percent change from year ago
Board of Governors of the Federal Reserve System (US), Bank Credit of All Commercial Banks [TOTBKCR], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/TOTBKCR/, January 16, 2017.
M1 Money Multiplier (last updated 1-12-17):
M1 Money Multiplier
Federal Reserve Bank of St. Louis, M1 Money Multiplier [MULT], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/MULT/, January 16, 2017.
Median Duration of Unemployment (last updated 1-6-17):
Median Duration Of Unemployment
US. Bureau of Labor Statistics, Median Duration of Unemployment [UEMPMED], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/UEMPMED/, January 16, 2017.
Labor Force Participation Rate (last updated 1-6-17):
Civilian Labor Force Participation Rate
US. Bureau of Labor Statistics, Civilian Labor Force Participation Rate [CIVPART], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/CIVPART/, January 16, 2017.
The Chicago Fed National Activity Index (CFNAI) 3-month moving average (CFNAI-MA3)(last updated 12-22-16):
CFNAI-MA3
Federal Reserve Bank of Chicago, Chicago Fed National Activity Index: Three Month Moving Average [CFNAIMA3], retrieved from FRED, Federal Reserve Bank of St. Louis https://research.stlouisfed.org/fred2/series/CFNAIMA3/, January 16, 2017.
I will continue to update these charts on an intermittent basis as they deserve close monitoring…
_____
The Special Note summarizes my overall thoughts about our economic situation
SPX at 2274.64 as this post is written

Friday, January 13, 2017

Long-Term Charts Of The ECRI WLI & ECRI WLI, Gr. – January 13, 2017 Update

As I stated in my July 12, 2010 post (“ECRI WLI Growth History“):
For a variety of reasons, I am not as enamored with ECRI’s WLI and WLI Growth measures as many are.
However, I do think the measures are important and deserve close monitoring and scrutiny.
Below are three long-term charts, from Doug Short’s ECRI update post of January 13, 2017 titled “ECRI Weekly Leading Index: '2016 Shapes 2017 Cyclical Outlook.'”  These charts are on a weekly basis through the January 13, 2017 release, indicating data through January 6, 2017.
Here is the ECRI WLI (defined at ECRI’s glossary):
ECRI WLI
This next chart depicts, on a long-term basis, the Year-over-Year change in the 4-week moving average of the WLI:
This last chart depicts, on a long-term basis, the WLI, Gr.:
ECRI WLI,Gr.
_________
I post various economic indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with what they depict or imply.
_____
The Special Note summarizes my overall thoughts about our economic situation
SPX at 2273.58 as this post is written

Thursday, January 12, 2017

The January 2017 Wall Street Journal Economic Forecast Survey

The January 2017 Wall Street Journal Economic Forecast Survey was published on January 12, 2017.  The headline is “Forecasters See Upside Risks to Their Economic Outlooks at Highest in More Than Two Years.”
I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the “Economist Q&A” section.
Two excerpts:
In the most recent survey, 64% of respondents said the risk was to the upside, the highest in over two years, and a reversal from the mood of recent years, which was focused on potential risks from a global economic slowdown.
also:
In anticipation of Mr. Trump’s presidency, economic forecasts have already risen. The average forecast is for GDP growth of 2.4% in 2017 and 2.5% in 2018. That is a 0.2 percentage point increase for 2017 and 0.5 percentage point for 2018.
As stated in the article, the survey’s respondents were 67 academic, financial and business economists.  Not every economist answered every question.  The survey occurred on January 6, 2017 to January 10, 2017.
As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 16.49%. The individual estimates, of those who responded, ranged from 0% to 75%.  For reference, the average response in December’s survey was 16.79%.
The current average forecasts among economists polled include the following:
GDP:
full-year 2016:  2.0%
full-year 2017:  2.4%
full-year 2018:  2.5%
full-year 2019:  2.2%
Unemployment Rate:
December 2017: 4.5%
December 2018: 4.4%
December 2019: 4.5%
10-Year Treasury Yield:
December 2017: 2.89%
December 2018: 3.36%
CPI:
December 2017:  2.3%
December 2018:  2.4%
Crude Oil  ($ per bbl):
for 12/31/2017: $56.31
for 12/31/2018: $59.28
(note: I highlight this WSJ Economic Forecast survey each month; commentary on past surveys can be found under the “Economic Forecasts” label)
_____
I post various economic forecasts because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with many of the consensus estimates and much of the commentary in these forecast surveys.
_____
The Special Note summarizes my overall thoughts about our economic situation
SPX at 2270.44 as post is written

Wednesday, January 11, 2017

Chicago Fed National Financial Conditions Index (NFCI)

The St. Louis Fed’s Financial Stress Index (STLFSI) is one index that is supposed to measure stress in the financial system.  Its reading as of the January 5, 2017 update (reflecting data through December 30, 2016) is -1.148.
Of course, there are a variety of other measures and indices that are supposed to measure financial stress and other related issues, both from the Federal Reserve as well as from private sources.
Two other indices that I regularly monitor include the Chicago Fed National Financial Conditions Index (NFCI) as well as the Chicago Fed Adjusted National Financial Conditions Index (ANFCI).
Here are summary descriptions of each, as seen in FRED:
The National Financial Conditions Index (NFCI) measures risk, liquidity and leverage in money markets and debt and equity markets as well as in the traditional and “shadow” banking systems. Positive values of the NFCI indicate financial conditions that are tighter than average, while negative values indicate financial conditions that are looser than average.
The adjusted NFCI (ANFCI). This index isolates a component of financial conditions uncorrelated with economic conditions to provide an update on how financial conditions compare with current economic conditions.
For further information, please visit the Federal Reserve Bank of Chicago’s web site:
Below are the most recently updated charts of the NFCI and ANFCI, respectively.
The NFCI chart below was last updated on January 11, 2017 incorporating data from January 5,1973 through January 6, 2017, on a weekly basis.  The January 6, 2017 value is -.77:
NFCI
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed January 11, 2017:
The ANFCI chart below was last updated on January 11, 2017 incorporating data from January 5,1973 through January 6, 2017, on a weekly basis.  The January 6 value is -.17:
ANFCI
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed January 11, 2017:
_________
I post various indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this blog are aware, I do not necessarily agree with what they depict or imply.
_____
The Special Note summarizes my overall thoughts about our economic situation
SPX at 2271.63 as this post is written