Standard & Poor’s S&P500 Earnings Estimates For 2016 & 2017 – As Of April 13, 2016

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 April 13, 2016:

Year 2016 estimates add to the following:

-From a “bottom up” perspective, operating earnings of $117.47/share

-From a “top down” perspective, operating earnings of N/A

-From a “bottom up” perspective, “as reported” earnings of $109.30/share

Year 2017 estimates add to the following:

-From a “bottom up” perspective, operating earnings of $135.60/share

-From a “top down” perspective, operating earnings of N/A

-From a “bottom up” perspective, “as reported” earnings of $125.30/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 2080.73 as this post is written

Persistent U.S. Federal Budget Deficits

In various posts as well as seen in the "America's Trojan Horse" discussion, I have discussed various aspects of both the federal deficit and federal debt.  Both of these issues remain highly problematical in many ways.  At the same time, many aspects of the problems and their future implications lack recognition, either partially or fully.

One notable chart that I recently came across depicts, on a long-term basis, the level of the federal deficit as a percentage of GDP.  This chart is from the Peter G. Peterson Foundation, and is dated March 10, 2016:

(click on chart to enlarge image)

I find the depiction above to be notable in many ways.  As one can see, prior to 1950 (substantial levels of) deficits corresponded with wartime periods, and many other periods showed budget surpluses.  Beginning at around 1950, deficits became not only commonplace but also increasingly larger as a percentage of GDP.

Also notable is that over (roughly) the last 15 years, the U.S. has been unwilling and/or unable to produce a federal budget surplus.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2082.78 as this post is written

Disturbing Charts (Update 22)

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 – 82 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 3-16-16):

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/, April 13, 2016.

–

The Federal Deficit (last updated 3-14-16):

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/, April 13, 2016.

–

Federal Net Outlays (last updated 3-14-16):

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/, April 13, 2016.

–

State & Local Personal Income Tax Receipts  (% Change from Year Ago)(last updated 3-25-16):

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/, April 13, 2016.

–

Total Loans and Leases of Commercial Banks (% Change from Year Ago)(last updated 4-8-16):

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/, April 13, 2016.

–

Bank Credit – All Commercial Banks (% Change from Year Ago)(last updated 4-8-16):

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/, April 13, 2016.

–

M1 Money Multiplier (last updated 4-7-16):

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/, April 13, 2016.

–

Median Duration of Unemployment (last updated 4-1-16):

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/, April 13, 2016.

–

Labor Force Participation Rate (last updated 4-1-16):

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/, April 13, 2016.

–

The Chicago Fed National Activity Index (CFNAI) 3-month moving average (CFNAI-MA3)(last updated 3-21-16):

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/, April 13, 2016.

–

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 2082.42 as this post is written

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 April 7, 2016 update (reflecting data through April 1) is -.808.

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:

http://www.chicagofed.org/webpages/publications/nfci/index.cfm

Below are the most recently updated charts of the NFCI and ANFCI, respectively.

The NFCI chart below was last updated on April 13, 2016 incorporating data from January 5,1973 to April 8, 2016, on a weekly basis.  The April 8, 2016 value is -.65:

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed April 13, 2016:

http://research.stlouisfed.org/fred2/series/NFCI

–

The ANFCI chart below was last updated on April 13, 2016 incorporating data from January 5,1973 to April 8, 2016, on a weekly basis.  The April 8 value is .28:

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed April 13, 2016:

http://research.stlouisfed.org/fred2/series/ANFCI

_________

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 2074.73 as this post is written

April 2016 IMF Report – Probabilities Of Recession And Deflation

The International Monetary Fund (IMF) recently published the April 2016 “World Economic Outlook.” (pdf)  The subtitle is “World Economic Outlook:  Too Slow for Too Long.”

One area of the report is Figure 1.18 on page 28.  While I do not agree with the current readings of the two measures presented – Probability of Recession and the Probability of Deflation – I do find them to be notable, especially as one can compare these estimates across various global economies.

As one can see, the U.S. is estimated to have a roughly 22% probability of recession and roughly a 10% probability of deflation for the periods indicated.

_________

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 2061.72 this post is written

Long-Term Credit Spread Chart – April 12, 2016

In the October 6, 2015 post (“Comparisons Of Economic And Financial Aspects – 2008 And 2015“) I discussed credit spreads and featured a chart of the spread between Moody’s Seasoned Baa Corporate Bond and the 10-Year Treasury Constant Maturity.

For reference, here is an updated long-term chart of that measure, with a current reading (updated as of April 11, with a value from April 8, 2016) of 3.07%:

Federal Reserve Bank of St. Louis, Moody’s Seasoned Baa Corporate Bond Yield Relative to Yield on 10-Year Treasury Constant Maturity [BAA10Y], retrieved from FRED, Federal Reserve Bank of St. Louis on April 12, 2016:

https://research.stlouisfed.org/fred2/series/BAA10Y/

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2041.99 as this post is written

The S&P500 Vs. The Shanghai Stock Exchange Composite Index – April 12, 2016

For reference purposes, the chart below shows the S&P500 vs. the Shanghai Stock Exchange Composite Index on a daily basis, since 2006, with price labels:

(click on chart to enlarge image)(chart courtesy of StockCharts.com; chart creation and annotation by the author)

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2041.99 as this post is written

Long-Term Charts Of The ECRI WLI & ECRI WLI, Gr. – April 8, 2016 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 blog post of April 8, 2016 titled “ECRI Weekly Leading Index:  WLI Up .20 From Last Week, Still Positive.”  These charts are on a weekly basis through the April 8, 2016 release, indicating data through April 1, 2016.

Here is the ECRI WLI (defined at ECRI’s glossary):

–

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.:

_________

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 2052.28 as this post is written