Monthly Archives: January 2013

St. Louis Financial Stress Index – January 17, 2013 Update

On March 28, 2011 I wrote a post (“The STLFSI“) about the  St. Louis Fed’s Financial Stress Index (STLFSI) which is supposed to measure stress in the financial system.  For reference purposes, the most recent chart is seen below.  This chart was last updated on January 17, incorporating data from December 31,1993 to January 11, 2013 on a weekly basis.  The January 11, 2013 value is -.462 :

(click on chart to enlarge image)

STLFSI_1-17-13 -.462

Here is the STLFSI chart from a 1-year perspective:

STLFSI_1-17-13 -.462 1-year

_________

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 1480.94 as this post is written

Food Stamps As Of January 17, 2013

This post is an update to previous posts concerning food stamps.  The program is officially called “Supplemental Nutrition Assistance Program,” or SNAP.  As stated on the SNAP website, “As of Oct. 1, 2008, Supplemental Nutrition Assistance Program (SNAP) is the new name for the federal Food Stamp Program.”

The data was last updated January 4, 2013, reflecting October 2012 levels.

Here is a table showing various monthly statistics with regard to national participation and costs going back to FY2011.  As seen in this table, the number of people participating as of October 2012 is 47,525,329 up 2.78% from year-ago (October 2011) levels.  As a reference point, the figure as of June 2009 (the official end of the recession as defined by the NBER) was 34,882,031.  Longer-term annual data is also available.

As I wrote in the April 12, 2010 post, “Of course, what is particularly disconcerting is not only the extent of participation in these programs, but the fact that this is yet another notable statistic that is getting worse well after the purported end of the recession.”

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1476.09 as this post is written

The S&P500 Vs. The Shanghai Stock Exchange Composite Index – January 15, 2013

Starting on May 3, 2010 I have written posts concerning the notable divergence that has occurred between the S&P500 and Chinese (Shanghai Composite) stock markets.

The chart below illustrates this divergence; it shows the S&P500 vs. the Shanghai Composite on a daily basis, since 2006:

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

EconomicGreenfield 1-15-13 SPX v SSEC

It is notable that the Shanghai Composite led the SPX (S&P500) significantly in late ’08 – early ’09, yet it has been (generally) declining since that time.

I continue to find this divergence between the S&P500 and  Shanghai Composite to be notable and disconcerting, on an “all things considered” basis.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1464.91 as this post is written

The January 2013 Wall Street Journal Economic Forecast Survey

The January Wall Street Journal Economic Forecast Survey was published on January 10, 2013.  The headline is “‘Cliff’ Deal Seen Hitting Growth.”

Although I don’t agree with various aspects of the survey’s contents, I found numerous items to be notable, both within the article and in the Q&A found in the spreadsheet.

An excerpt from the article:

The economists expect the economy to expand at a tepid 2.3% pace in 2013, barely above the 2% rate they estimate for growth last year. That isn’t fast enough to bring down the unemployment rate quickly. On average, the economists still expect a 7.4% unemployment rate at year-end, compared with the current 7.8%. They don’t see unemployment falling below 7% until sometime in 2015.

Though the economists were largely unimpressed with the deal to avert the fiscal cliff, only 15 respondents said the agreement is actively bad for the economy. Indeed the average odds of a recession in the next 12 months tumbled to 19% from 24% last month, the first time they have been below 20% since last June.

The current average forecasts among economists polled include the following:

GDP:

full-year 2012:  2.0%

full-year 2013:  2.3%

full-year 2014:  2.9%

full-year 2015:  3.0%

Unemployment Rate:

December 2013: 7.4%

December 2014: 7.0%

December 2015: 6.4%

10-Year Treasury Yield:

December 2013: 2.34%

December 2014: 2.97%

December 2015: 3.59%

CPI:

December 2013:  2.0%

December 2014:  2.3%

December 2015:  2.5%

Crude Oil  ($ per bbl):

for 12/31/2013: $94.54

(note: I highlight this WSJ Economic Forecast survey each month; commentary on past surveys can be found under the “Economic Forecasts” category)

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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 1469.54 as this post is written

Long-Term Charts Of The ECRI WLI & ECRI WLI, Gr. – January 11, 2013 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.

The movement of the ECRI WLI and WLI, Gr. is particularly notable at this time, as ECRI publicly announced on September 30, 2011 that the U.S. was “tipping into recession,” and ECRI has reiterated the view that the U.S. economy is currently in a recession, seen most recently in these two media sources of December 7, 2012:

“Reviewing the indicators used to officially decide U.S. recession dates, it looks like the recession began around July 2012.”

Other past notable 2012 reaffirmations of the September 30, 2011 recession call by ECRI were seen (in chronological order)  on March 15 (“Why Our Recession Call Stands”) as well as various interviews and statements the week of May 6, including:

Also, subsequent to May 2012:

Below are three long-term charts, from Doug Short’s blog post of January 11 titled “ECRI’s Imaginary Recession:  Now in its Seventh Month.”  These charts are on a weekly basis through the January 11 release, indicating data through January 4, 2013.

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

Dshort 1-11-13 ECRI-WLI 128.3

This next chart depicts, on a long-term basis, the Year-over-Year change in the 4-week moving average of the WLI:

Dshort 1-11-13 ECRI-WLI-YoY 5.5 percent

This last chart depicts, on a long-term basis, the WLI, Gr.:

Dshort 1-11-13 ECRI-WLI-growth-since-1965 5.1

_________

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 1469.31 as this post is written

St. Louis Financial Stress Index – January 10, 2013 Update

On March 28, 2011 I wrote a post (“The STLFSI“) about the  St. Louis Fed’s Financial Stress Index (STLFSI) which is supposed to measure stress in the financial system.  For reference purposes, the most recent chart is seen below.  This chart was last updated on January 10, incorporating data from December 31,1993 to January 4, 2013 on a weekly basis.  The January 10, 2013 value is -.38 :

(click on chart to enlarge image)

STLFSI_1-10-13 -.38

Here is the STLFSI chart from a 1-year perspective:

STLFSI_1-10-13 -.38 1-year

_________

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 1472.12 as this post is written

Charts Of Equities’ Performance Since March 9, 2009 And January 1, 1980 – January 10, 2013 Update

In the March 9, 2012 post (“Charts of Equities’ Performance Since March 9, 2009 And January 1, 1980“) I highlighted two charts for reference purposes.

Below are those two charts, updated through the last current price.

The first is a daily chart of the S&P500 (shown in green), as well as five prominent (AAPL, IBM, WFM, SBUX, CAT) individual stocks, since 2005.  There is a blue vertical line that is very close to the March 6, 2009 low.  As one can see, both the S&P500 performance, as well as many stocks including the five shown, have performed strongly since the March 6, 2009 low:

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

EconomicGreenfield 1-10-13 SPX vs AAPL IBM WFM SBUX CAT

This next chart shows, on a monthly LOG basis, the S&P500 since 1980.  I find this chart notable as it provides an interesting long-term perspective on the S&P500′s performance.  The 20, 50, and 200-month moving averages are shown in blue, red, and green lines, respectively:

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

EconomicGreenfield 1-10-13 SPX Monthly LOG since 1980

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1468.01 as this post is written

CEO Confidence Surveys 4Q 2012 – Notable Excerpts

On January 7, The Conference Board released its 4th Quarter CEO Confidence Survey.   The overall measure of CEO Confidence was at 46, up from 42 in the third quarter. [note:  a reading of more than 50 points reflects more positive than negative responses]

Notable excerpts from this January 7 Press Release include:

CEOs’ assessment of current economic conditions has grown slightly more favorable, with 15 percent claiming conditions have improved compared to six months ago, up from 9 percent last quarter. About 13 percent of business leaders say conditions in their own industries have improved, compared with 14  percent in the third quarter of 2012.

CEOs’ short-term outlook is also more upbeat than last quarter. Currently, 23 percent of business leaders expect economic conditions to improve over the next six months, up from 12 percent last quarter. Expectations for their own industries are also more optimistic, with 19 percent of CEOs anticipating an improvement in conditions in the months ahead, up from 15 percent in the third quarter.

The Business Roundtable also recently released its CEO Economic Outlook Survey for the 4th Quarter of 2012.   Notable excerpts from the December 12 release, titled “CEOs See Continued Uncertainty for U.S. Economy” include the following:

The results of Business Roundtable’s (BRT) fourth quarter 2012 CEO Economic Outlook Survey show CEOs’ expectations are largely unchanged, with a slight decline in expectations for sales and capital spending and a slight rise in expectations for hiring. This follows a significant drop in expectations in the third quarter of 2012.

also:

The Business Roundtable CEO Economic Outlook Survey Index – a composite index of CEO expectations for the next six months of sales, capital spending and employment – remained essentially unchanged at 65.6 in the fourth quarter of 2012 from 66.0 in the third quarter. While the Index remains above 50.0 – signaling continuing economic expansion – it is at its lowest level since the third quarter of 2009 and is well below its long-term average level of 79.4.

also:

BRT CEOs expect 2.0 percent growth for 2013, an increase from last quarter’s estimate of 1.9 percent. CEO expectations for hiring over the next six months are roughly neutral, which represents a slight improvement from the expected decrease reported last quarter.

_____

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 1462.50 as this post is written

Financial Stocks – January 8, 2013 Update Concerning Poor “Price Action”

On June 29, 2011 I wrote a blog post titled “Financial Stocks – Notable Price Action.”  This post is the latest update of that message.

Although financial stocks have (in general) increased in price since 2012, I continue to believe that the longer-term “price action” of various financial stocks is disconcerting.  I view the poor performance of these financial and brokerage stocks to be one indicator among (very) many that serves as a “red flag” as to the financial markets and economy as a whole.

Here is an updated chart to that shown in the aforementioned June 29, 2011 post.  It shows the XLF (the financial ETF) on a daily basis since 2007.  As well, the S&P500 is plotted above it, with GS and JPM shown below it.  The blue line on each indicates the 200dma:

(click on chart image to enlarge)(chart courtesy of StockCharts.com; chart created by and annotated by author)

EconomicGreenfield 1-8-13 Financial Stocks Poor Price Action

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1459.79 as this post is written

Financial Stocks – Relative Price To Overall Stock Market – January 8, 2013 Update

In the June 29, 2011 post (“Financial Stocks – Notable Price Action”) I wrote the following:

I think that the relatively poor “price action” of various financial stocks is notable.  It is one of many current indications that overall stock market health is not as strong as a casual glance at the major indices would indicate.

I continue to believe that the lagging / “sagging” price of various financial stocks is highly notable.  Here is a chart that I created a while ago that provides another view of the poor “price action” of the financial stocks vs. that of the entire stock market, as depicted by the S&P500:

(click on chart to enlarge image)(chart courtesy of StockCharts.com; chart created by and annotated by author)

EconomicGreenfield 1-8-13 Financial Stocks Relative To The Stock Market

The above chart is depicted on a daily basis, LOG scale, since 2007.   On each of the three plots, a blue line depicts the 50dma for perspective.

As one can see, there has been an interesting progression of the relative price of the XLF (Financial SPDR) vs. the S&P500, as seen in the top of the chart.  In the middle of the chart, the same can be seen in the $XBD (Broker/Dealer Index).  Generally, since mid-2009, the price of both the XLF and $XBD have been on a slow downward trajectory relative to the price of the S&P500.  The S&P500 is plotted on the bottom of the chart.

In my experience, any time the financials lag the general stock market for a considerable period, it is generally a “red flag” that should be closely monitored.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1461.89 as this post is written