Wednesday, March 22, 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 March 16, 2017 update (reflecting data through March 10, 2017) is -1.360.
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 March 22, 2017 incorporating data from January 5,1973 through March 17, 2017, on a weekly basis.  The March 17, 2017 value is -.78:
NFCI_3-22-17 -.78
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed March 22, 2017:
The ANFCI chart below was last updated on March 22, 2017 incorporating data from January 5,1973 through March 17, 2017, on a weekly basis.  The March 17 value is -.01:
ANFCI
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed March 22, 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 2340.21 as this post is written

Tuesday, March 21, 2017

Money Supply Charts Through February 2017

For reference purposes, below are two sets of charts depicting growth in the money supply.
The first shows the MZM (Money Zero Maturity), defined in FRED as the following:
M2 less small-denomination time deposits plus institutional money funds.
Money Zero Maturity is calculated by the Federal Reserve Bank of St. Louis.
Here is the “MZM Money Stock” (seasonally adjusted) chart, updated on March 17, 2017 depicting data through February 2017, with a value of $14,671.4 Billion:
MZMSL
Here is the “MZM Money Stock” chart on a “Percent Change From Year Ago” basis, with a current value of 5.8%:
MZMSL percent change from year ago
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed March 21, 2017:
The second set shows M2, defined in FRED as the following:
M2 includes a broader set of financial assets held principally by households. M2 consists of M1 plus: (1) savings deposits (which include money market deposit accounts, or MMDAs); (2) small-denomination time deposits (time deposits in amounts of less than $100,000); and (3) balances in retail money market mutual funds (MMMFs). Seasonally adjusted M2 is computed by summing savings deposits, small-denomination time deposits, and retail MMMFs, each seasonally adjusted separately, and adding this result to seasonally adjusted M1.
Here is the “M2 Money Stock” (seasonally adjusted) chart, updated on March 16, 2017, depicting data through February 2017, with a value of $13,313.1 Billion:
M2SL
Here is the “M2 Money Stock” chart on a “Percent Change From Year Ago” basis, with a current value of 6.4%:
M2SL percent change from year ago
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed March 21, 2017:
_____
The Special Note summarizes my overall thoughts about our economic situation
SPX at 2373.47 as this post is written

Monday, March 20, 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 March 17, 2017:
from page 14:
(click on charts to enlarge images)
S&P500 EPS forecast 2017
from page 15:
S&P500 EPS 2007-2018
_____
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 2373.47 as this post is written

S&P500 EPS Estimates 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 March 20, 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:
$118.26/share
Year 2017 estimate:
$130.89/share
Year 2018 estimate:
$146.84/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 2373.46 as this post is written

Standard & Poor’s S&P500 Earnings Estimates For 2016, 2017 And 2018 – As Of March 16, 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 March 16, 2017:
Year 2016 estimates add to the following:
-From a “bottom up” perspective, operating earnings of $106.25/share
-From a “top down” perspective, operating earnings of N/A
-From a “bottom up” perspective, “as reported” earnings of $94.54/share
Year 2017 estimates add to the following:
-From a “bottom up” perspective, operating earnings of $130.21/share
-From a “top down” perspective, operating earnings of N/A
-From a “bottom up” perspective, “as reported” earnings of $118.83/share
Year 2018 estimates add to the following:
-From a “bottom up” perspective, operating earnings of $147.14/share
-From a “top down” perspective, operating earnings of N/A
-From a “bottom up” perspective, “as reported” earnings of $130.03/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 2375.71 as this post is written

Updates Of Economic Indicators March 2017

Here is an update of various indicators that are supposed to predict and/or depict economic activity. These indicators have been discussed in previous blog posts:
The March 2017 Chicago Fed National Activity Index (CFNAI) updated as of March 20, 2017:
The CFNAI, with current reading of .34:
CFNAI
Federal Reserve Bank of Chicago, Chicago Fed National Activity Index [CFNAI], retrieved from FRED, Federal Reserve Bank of St. Louis, March 20, 2017;
The CFNAI-MA3, with current reading of .25:
CFNAIMA3
Federal Reserve Bank of Chicago, Chicago Fed National Activity Index: Three Month Moving Average [CFNAIMA3], retrieved from FRED, Federal Reserve Bank of St. Louis, March 20, 2017;
As of March 17, 2017 (incorporating data through March 10, 2017) the WLI was at 145.5 and the WLI, Gr. was at 9.6%.
A chart of the WLI,Gr., from Doug Short’s ECRI update post of March17, 2017:
ECRI WLI,Gr.
Here is the latest chart, depicting the ADS Index from December 31, 2007 through March 11, 2017:
ADS Index
The Conference Board Leading (LEI), Coincident (CEI) Economic Indexes, and Lagging Economic Indicator (LAG):
As per the March 17, 2017 press release, titled “The Conference Board Leading Economic Index (LEI) for the U.S. Increased in February” (pdf) the LEI was at 126.2, the CEI was at 114.9, and the LAG was 123.5 in February.
An excerpt from the  release:
“After six consecutive monthly gains, the U.S. LEI is at its highest level in over a decade. Widespread gains across a majority of the leading indicators points to an improving economic outlook for 2017, although GDP growth is likely to remain moderate,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “Only housing permits contributed negatively to the LEI in February, reversing gains over the previous two months.”
Here is a chart of the LEI from Doug Short’s Conference Board Leading Economic Index update of March 17, 2017:
Conference Board LEI
_________
I post various indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this site 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 2376.00 as this post is written

Friday, March 17, 2017

Long-Term Charts Of The ECRI WLI & ECRI WLI, Gr. – March 17, 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 March 17, 2017 titled “ECRI Weekly Leading Index…”  These charts are on a weekly basis through the March 17, 2017 release, indicating data through March 10, 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 2380.05 as this post is written

March 2017 Duke/CFO Global Business Outlook Survey – Notable Excerpts

On March 15, 2017 the March Duke/CFO Global Business Outlook was released.  It contains a variety of statistics regarding how CFOs view business and economic conditions.
In this CFO survey, I found the following to be the most notable excerpts – although I don’t necessarily agree with them:
Results also show that CFOs are feeling the most confident about economic growth than they've been in more than a dozen years, and they strongly support several of the president's initiatives.
These findings and detailed analysis of tax and economic reforms are from the Duke University/CFO Global Business Outlook. The survey has been conducted for 84 consecutive quarters and spans the globe, making it the world's longest-running and most comprehensive research on senior finance executives. This quarter, nearly 900 CFOs responded to the survey, which ended March 10. Results are for the U.S. unless stated otherwise.
also:
The Optimism Index jumped this quarter to 69 (on a 100-point scale), the highest level in 14 years and much higher than the long-run average of 60.
"The jump in business optimism is leading to strong hiring and spending plans for 2017," Graham said. "Our analysis of past forecasts shows that the Optimism Index is an accurate predictor of GDP growth and employment over the next year."
Sixty-one percent of U.S. firms plan to increase their payrolls in 2017, with an average increase of about 3 percent (median 1 percent). Wage hikes are expected to average nearly 4 percent. Capital spending is expected to increase 6 percent on average (median 3 percent), a notable improvement from flat or negative spending plans for most of 2016.
"There's a disconnect here," said Duke finance professor Campbell R. Harvey, founding director of the CFO Survey. "Despite the optimism, the high rate of employment growth and wages, and the substantial possibility of both corporate and individual tax cuts, CFOs have very pessimistic growth forecasts, where only 16.8 percent believe we can hit 3 percent growth in 2017. That is surprising."
The CFO survey contains two Optimism Index charts, with the bottom chart showing U.S. Optimism (with regard to the economy) at 69, as seen below:
Duke CFO Optimism March 2017
It should be interesting to see how well the CFOs predict business and economic conditions going forward.   I discussed past various aspects of this, and the importance of these predictions, in the July 9, 2010 post titled “The Business Environment”.
(past posts on CEO and CFO surveys can be found under the “CFO and CEO Confidence” 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 2381.38 as this post is written