St. Louis Financial Stress Index – April 19, 2012 Update

April 20th, 2012

On March 28, 2011 I wrote a post (“The STLFSI“) about the  STLFSI (St. Louis Fed’s Financial Stress Index) 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 April 19, incorporating data from 12-31-93 to 4-13-12 on a weekly basis.  The 4-13-12 value is .277 :

(click on chart to enlarge image)

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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 1376.92 as this post is written

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Building Financial Danger – April 19, 2012 Update

April 19th, 2012

On October 17, 2011 I wrote a post titled “Danger Signs In The Stock Market, Financial System And Economy.”  This post is a brief tenth update to that post.

My overall analysis indicates a continuing elevated and growing level of danger which contains  many worldwide and U.S.-specific “stresses” of a very complex nature.

I have written numerous posts of some of what I consider both ongoing and recent “negative developments.”  These developments, as well as other highly problematic conditions, have presented a highly perilous economic environment that endangers the overall financial system.

My analysis continues to indicate that there are many reasons for tremendous concern, as seen in almost innumerable fundamental economic, financial-market, and proprietary measures.   Many prominent parties seem to be fixated on the European financial problems.  While I believe that the European debt problems are gravely serious and have broader implications (as explained in the November 17, 2011 post “Europe And Contagion – Broader Implications“), an array of U.S. economic problems also exist.

Predicting the timing and extent of a stock market crash is always difficult, and the immense complexity of today’s economic situation makes such a prediction even more challenging. With that being said, my analyses indicate that the danger inherent in the financial system has reached a level at which a stock market crash – that would also involve (as seen in 2008) various other markets as well – has reached a level at which a near-term crash is a substantial concern.

(note: the “next crash” has outsized significance and implications, as discussed in the post of January 6, “The Next Crash And Its Significance“)

As reference, below is a one-year daily chart of the S&P500, indicating both the 50dma and 200dma as well as price labels.  The current price is 1378.42:

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

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1378.42 as this post is written

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Financial Stocks – April 18, 2012 Update Concerning Poor “Price Action”

April 18th, 2012

On June 29, 2011 I wrote a blog post titled “Financial Stocks – Notable Price Action.”

Although financial stocks have increased in price in 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 June 29 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)

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1385.85 as this post is written

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Financial Stocks – Relative Price To Overall Stock Market – April 18, 2012 Update

April 18th, 2012

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)

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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 1390.78 as this post is written

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CEO Confidence Surveys 1Q 2012 – Notable Excerpts

April 17th, 2012

On April 5, The Conference Board released its 1st Quarter CEO Confidence Survey.   The overall measure of CEO Confidence was at 63, up from 49 in the fourth quarter.

Notable excerpts from this April 5 Press Release include:

Says Lynn Franco, Director of The Conference Board Consumer Research Center: “CEOs’ confidence has rebounded from rather dismal readings in the latter half of 2011. Looking ahead, chief executives are optimistic about growth prospects, with about the same percentage as last year expecting to hire new workers.”

also:

CEOs’ appraisal of current economic conditions has grown very positive. Now, 67 percent say conditions have improved compared to six months ago, up from just 17 percent last quarter. A similar improvement is reflected in the assessment of their own industries. Forty-two percent of business leaders claim conditions have improved, compared with only 16 percent in the fourth quarter of 2011.

The Business Roundtable also recently released their CEO Economic Outlook Survey for the 1st Quarter of 2012.   Notable excerpts from the March 28 release, titled “America’s CEOs See Increased Momentum for U.S. Economy” include the following:

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 – increased notably to 96.9 in the first quarter of 2012, from 77.9 in the fourth quarter of 2011.

also:

The results of Business Roundtable’s (BRT) first quarter CEO Economic Outlook Survey for 2012 show an upturn in expectations for sales, capital spending and hiring for the next six months.

also:

In terms of the overall U.S. economy, Business Roundtable members estimate real GDP will grow by 2.3 percent in 2012, up from last quarter’s estimate of 2.0.

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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 1369.57 as this post is written

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The April 2012 Wall Street Journal Economic Forecast Survey

April 16th, 2012

The April Wall Street Journal Economic Forecast Survey was published on April 12, 2012.  The headline is “Economists Don’t See Fed Action This Year.”

The commentary largely focuses on the possibilities and related issues with regard to whether the Federal Reserve will enact “another round of large-scale bond buying in 2012.”

Per the article:

Thirty-six of the 51 economists surveyed, not all of whom answer every question, say the central bank will refrain from another round of large-scale bond buying in 2012. The number who expect no action is up from 30 in the January survey.

Another notable excerpt, concerning unemployment:

Meanwhile, a disappointing March employment report didn’t alter expectations of gradual improvement in the job market as the year goes on. Economists see the unemployment rate falling to 7.9% by December from the current 8.2%, as the economy adds an average of 190,000 jobs a month over the next year. The jobless rate hasn’t been below 8% since January 2009.

Also, as seen in the Q&A section (in the spreadsheet), the economists put the probability of a U.S. recession in the next 12 months at 16%.

–

The current average forecasts among economists polled include the following:

GDP:

full-year 2012:  2.5%

full-year 2013:  2.6%

full-year 2014:  3.0%

Unemployment Rate:

December 2012: 7.9%

December 2013: 7.4%

December 2014:  6.8%

10-Year Treasury Yield:

December 2012: 2.55%

December 2013: 3.19%

December 2014:  3.81%

CPI:

December 2012:  2.4%

December 2013:  2.4%

December 2014:  2.6%

Crude Oil  ($ per bbl):

for 12/31/2012: $104.06

(note: I comment upon 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 1370.26 as this post is written

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Long-Term Charts Of The ECRI WLI & ECRI WLI, Gr. – April 13, 2012 Update

April 14th, 2012

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 reaffirmed that view since, with the most recent statement on March 15 (“Why Our Recession Call Stands.”)

Below is a long-term chart, on a weekly basis through the April 13 release (data through April 6 with current value of 125.7), of the ECRI WLI (defined at ECRI’s glossary) from Doug Short’s blog post of April 13 titled “ECRI Weekly Leading Indicator:  The Growth Index Continues To Improve“ :

(click on charts to enlarge images)

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This next chart depicts, on a long-term basis, the Year-over-Year change in the 4-week moving average of the WLI through the April 13 release (data through April 6):

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This last chart depicts, on a long-term basis, the WLI, Gr. through the April 13 release (data through April 6):

_________

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 1370.26 as this post is written

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St. Louis Financial Stress Index – April 12, 2012 Update

April 13th, 2012

On March 28, 2011 I wrote a post (“The STLFSI“) about the  STLFSI (St. Louis Fed’s Financial Stress Index) 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 April 12, incorporating data from 12-31-93 to 4-6-12 on a weekly basis.  The 4-6-12 value is .209 :

(click on chart to enlarge image)

_________

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 1376.45 as this post is written

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Standard & Poors S&P500 Earnings Estimates For 2012 & 2013 – As Of April 4, 2012

April 12th, 2012

As many are aware, Standard & Poors publishes earnings estimates for the S&P500.  (My posts concerning their estimates can be found under the S&P500 Earnings tag)

Currently (the latest estimates are as of  April 4), their estimates for 2012 add to the following:

-From a “bottoms up” perspective, operating earnings of $104.89/share

-From a “top down” perspective, operating earnings of $103.66/share

-From a “top down” perspective, “as reported” earnings of $100.74/share

Currently, their estimates for 2013 add to the following:

-From a “bottoms up” perspective, operating earnings of $118.85/share

-From a “top down” perspective, operating earnings of $109.77/share

-From a “top down” perspective, “as reported” earnings of $107.11/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 1368.71 as this post is written

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Markets During Periods Of Federal Reserve Intervention – April 10, 2012 Update

April 11th, 2012

In the August 9, 2011 post (“QE3 – Various Thoughts“) I posted a chart that depicted the movements of the S&P500, 10-Year Treasury Yield and the Fed Funds rate spanning the periods of various Federal Reserve interventions since 2007.

For reference purposes, here is an updated chart from Doug Short’s blog post of April 10 (“Fed Intervention and the Market:  New Update“) :

(click on chart to enlarge image)

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 1373.13 as this post is written

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