Monday, January 27, 2020

January 23, 2020 Gallup Poll Results On Economic Confidence – Notable Excerpts

On January 23, 2020 Gallup released the poll results titled “U.S. Economic Confidence at Highest Point Since 2000.”
Notable excerpts include:
Americans’ confidence in the U.S. economy is higher than at any point in about two decades. The latest figure from Gallup’s Economic Confidence Index is +40, the highest reading recorded since +44 in October 2000.
also:
Gallup’s Economic Confidence Index is the average of two components: Americans’ ratings of current economic conditions and their views on whether the economy is getting better or getting worse. The index has a theoretical maximum of +100, achieved if all Americans believe the economy is excellent or good and getting better. The theoretical minimum is -100, if all Americans say the economy is poor and getting worse.
The current conditions component score of +54 is the result of 62% of Americans saying the economy is “excellent” or “good” and 8% describing it as “poor.” Meanwhile, the economic outlook component score of +26 is the result of 59% saying the economy is “getting better” and 33% saying it is “getting worse.”
Also of note is other commentary, including a section titled “Mentions of Economic Issues as Greatest U.S. Problem at a Record Low.”
Here is an accompanying chart of the Gallup Economic Confidence Index from 1992-2020:
Gallup's Economic Confidence Index 1992-2020
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The Special Note summarizes my overall thoughts about our economic situation
SPX at 3251.63 as this post is written

Thursday, January 23, 2020

Money Supply Charts Through December 2019

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 January 16, 2020 depicting data through December 2019, with a value of $17,067.8 Billion:
MZMSL chart
Here is the “MZM Money Stock” chart on a “Percent Change From Year Ago” basis, with a current value of 8.7%:
MZMSL Percent Change From Year Ago chart
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed January 23, 2020;
https://research.stlouisfed.org/fred2/series/MZMSL
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 January 16, 2020, depicting data through December 2019, with a value of $15,401.8 Billion:
M2SL chart
Here is the “M2 Money Stock” chart on a “Percent Change From Year Ago” basis, with a current value of 7.2%:
M2SL Percent Change From Year Ago chart
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed January 23, 2020;
https://research.stlouisfed.org/fred2/series/M2SL
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The Special Note summarizes my overall thoughts about our economic situation
SPX at 3306.26 as this post is written

The U.S. Economic Situation – January 23, 2020 Update

Perhaps the main reason that I write of our economic situation is that I continue to believe, based upon various analyses, that our economic situation is in many ways misunderstood.  While no one likes to contemplate a future rife with economic adversity, current and future economic problems must be properly recognized and rectified if high-quality, sustainable long-term economic vitality is to be realized.
There are an array of indications and other “warning signs” – many readily apparent – that current economic activity and financial market performance is accompanied by exceedingly perilous dynamics.
I have written extensively about this peril, including in the following:
Building Financial Danger” (ongoing updates)
My analyses continues to indicate that the growing level of financial danger will lead to the next stock market crash that will also involve (as seen in 2008) various other markets as well.  Key attributes of this next crash is its outsized magnitude (when viewed from an ultra-long term historical perspective) and the resulting economic impact.  This next financial crash is of tremendous concern, as my analyses indicate it will lead to a Super Depression – i.e. an economy characterized by deeply embedded, highly complex, and difficult-to-solve problems.
For long-term reference purposes, here is a chart of the Dow Jones Industrial Average since 1900, depicted on a monthly basis using a LOG scale (updated through January 22, 2020, with a last value of 29186.27):
(click on chart to enlarge image)(chart courtesy of StockCharts.com)
DJIA since 1900 chart
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The Special Note summarizes my overall thoughts about our economic situation
SPX at 3321.75 as this post is written

Wednesday, January 22, 2020

Updates Of Economic Indicators January 2020

The following 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 January 2020 Chicago Fed National Activity Index (CFNAI) updated as of January 22, 2020:
The CFNAI, with current reading of -.35:
CFNAI
source:  Federal Reserve Bank of Chicago, Chicago Fed National Activity Index [CFNAI], retrieved from FRED, Federal Reserve Bank of St. Louis, January 22, 2020;
https://fred.stlouisfed.org/series/CFNAI
The CFNAI-MA3, with current reading of -.23:
CFNAIMA3
source:  Federal Reserve Bank of Chicago, Chicago Fed National Activity Index: Three Month Moving Average [CFNAIMA3], retrieved from FRED, Federal Reserve Bank of St. Louis, January 22, 2020;
https://fred.stlouisfed.org/series/CFNAIMA3
As of January 17, 2020 (incorporating data through January 10, 2020) the WLI was at 150.6 and the WLI, Gr. was at 4.4%.
A chart of the WLI,Gr., from the Doug Short site’s ECRI update post of January 17, 2020:
ECRI WLI,Gr.
Below is the latest chart, depicting the ADS Index from December 31, 2007 through January 11, 2020:
ADS Index
The Conference Board Leading (LEI), Coincident (CEI) Economic Indexes, and Lagging Economic Indicator (LAG):
As per the December 19, 2019 Conference Board press release, titled “The Conference Board Leading Economic Index (LEI) for the U.S. was Unchanged in November” the LEI was at 111.6, the CEI was at 106.8, and the LAG was 108.7 in November.
An excerpt from the release:
The US LEI was unchanged in November after three consecutive monthly declines. Strength in residential construction, financial markets, and consumers’ outlook offset weakness in manufacturing and labor markets,” said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board. “While the six-month growth rate of the LEI remains slightly negative, the Index suggests that economic growth is likely to stabilize around 2 percent in 2020.”
Here is a chart of the LEI from the Doug Short site Conference Board Leading Economic Index update of December 19, 2019:
Conference Board LEI
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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.
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The Special Note summarizes my overall thoughts about our economic situation
SPX at 3328.81 as this post is written

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” report of January 17, 2020:
from page 24:
(click on charts to enlarge images)
S&P500 EPS forecasts
from page 25:
S&P500 EPS 2010-2021
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I post various economic forecasts because I believe they should be carefully monitored.  However, as those familiar with this site are aware, I do not agree with many of the consensus estimates and much of the commentary in these forecast surveys.
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The Special Note summarizes my overall thoughts about our economic situation
SPX at 3320.79 as this post is written

Tuesday, January 21, 2020

S&P500 EPS Forecasts 2019 Through 2021 And Recent EPS

As many are aware, Refinitiv 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 24 of the “S&P500 Earnings Scorecard” (pdf) of January 21, 2020, and represent an aggregation of individual S&P500 component “bottom up” analyst forecasts.  For reference, the Year 2014 value is $118.78/share; the Year 2015 value is $117.46; the Year 2016 value is $118.10/share; the Year 2017 value is $132.00/share; and the Year 2018 value is $161.93:
Year 2019 estimate:
$161.51/share
Year 2020 estimate:
$177.06/share
Year 2021 estimate:
$196.42/share
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I post various economic forecasts because I believe they should be carefully monitored.  However, as those familiar with this site are aware, I do not agree with many of the consensus estimates and much of the commentary in these forecast surveys.
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The Special Note summarizes my overall thoughts about our economic situation
SPX at 3320.79 as this post is written

Standard & Poor’s S&P500 EPS Estimates 2019, 2020, & 2021 – January 16, 2020

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 16, 2020:
Year 2019 estimates add to the following:
-From a “bottom up” perspective, operating earnings of $158.03/share
-From a “top down” perspective, operating earnings of N/A
-From a “bottom up” perspective, “as reported” earnings of $140.24/share
Year 2020 estimates add to the following:
-From a “bottom up” perspective, operating earnings of $175.16/share
-From a “top down” perspective, operating earnings of N/A
-From a “bottom up” perspective, “as reported” earnings of $160.92/share
Year 2021 estimates add to the following:
-From a “bottom up” perspective, operating earnings of $191.22/share
-From a “top down” perspective, operating earnings of N/A
-From a “bottom up” perspective, “as reported” earnings of $171.23/share
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I post various economic forecasts because I believe they should be carefully monitored.  However, as those familiar with this site 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 3329.62 as this post is written

Friday, January 17, 2020

Long-Term Charts Of The ECRI WLI & ECRI WLI, Gr. – January 17, 2020 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 the Doug Short site’s ECRI update post of January 17, 2020 titled “ECRI Weekly Leading Index Update.”  These charts are on a weekly basis through the January 17, 2020 release, indicating data through January 10, 2020.
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:

ECRI WLI Year-over-Year of the Four-Week Moving Average

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 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 3329.62 as this post is written