Monthly Archives: April 2013

CEO Confidence Surveys 1Q 2013 – Notable Excerpts

On April 25, The Conference Board released its 1st Quarter CEO Confidence Survey.   The overall measure of CEO Confidence was at 54, up from 46 in the fourth quarter. [note:  a reading of more than 50 points reflects more positive than negative responses]

Notable excerpts from this April 25 Press Release include:

CEOs’ assessment of current economic conditions has grown more positive, with 36 percent claiming conditions are better compared to six months ago, up from 15 percent last quarter. About 29 percent of business leaders say conditions in their own industries have improved, compared with approximately 13 percent in the fourth quarter of 2012.

CEOs’ short-term outlook is also more optimistic. Currently, 32 percent of business leaders expect economic conditions to improve over the next six months, up from 23 percent last quarter. Expectations for their own industries are also more upbeat, with 33 percent of CEOs anticipating an improvement in conditions in the months ahead, up from 19 percent in the fourth quarter.

The Business Roundtable also released its CEO Economic Outlook Survey for the 1st Quarter of 2013 last month.   Notable excerpts from the March 12 release, titled “CEOs Expect Increased Sales and Capital Spending During Next Six Months” include the following:

CEO economic expectations increased for the first time in four quarters. BRT CEOs also expect 2.1 percent growth for 2013, a slight increase from last quarter’s estimate of 2.0 percent.

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 – increased significantly in the first quarter of 2013 to 81.0 from 65.6 in the fourth quarter of last year. The Index signals expected continued economic expansion and is at its highest level since the second quarter of 2012. The current Index is at about its long-term average level of 79.2.

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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.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1582.24 as this post is written

Consumer Confidence Surveys – As Of April 26, 2013

Doug Short had a blog post of April 26 (“Michigan Consumer Sentiment:  Better Than Expected, But Worse Than Last Month“) in which he presents the latest Conference Board Consumer Confidence and Thomson/Reuters University of Michigan Consumer Sentiment Index charts.  They are presented below:

(click on charts to enlarge images)

Dshort 4-26-13 - Conference-Board-consumer-confidence-index

Dshort 4-26-13 - Michigan-consumer-sentiment-index

There are a few aspects of the above charts that I find highly noteworthy.  Of course, the continuing subdued absolute levels of these two surveys is disconcerting.

Also, I find the “behavior” of these readings to be quite disparate as compared to the other post-recession periods, as shown in the charts between the gray shaded areas (the gray areas denote recessions as defined by the NBER.)

While I don’t believe that confidence surveys should be overemphasized, I find these readings to be very problematical, especially in light of a variety of other highly disconcerting measures highlighted throughout this blog.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1582.24 as this post is written

Velocity Of Money – Charts Updated Through April 26, 2013

Here are three charts from the St. Louis Fed depicting the velocity of money in terms of the MZM, M1 and M2 money supply measures.

All charts reflect quarterly data through the first quarter of 2013, and were last updated as of April 26, 2013.  As one can see, two of the three measures are at all-time lows for the periods depicted:

Velocity of MZM Money Stock, current value = 1.382 :

MZMV_4-26-13 1.382

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed April 27, 2013:

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

Velocity of M1 Money Stock, current value = 6.50 :

M1V_4-26-13 6.50

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed April 27, 2013:

http://research.stlouisfed.org/fred2/series/M1V

Velocity of M2 Money Stock, current value = 1.535 :

M2V_4-26-13 1.535

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed April 27, 2013:

http://research.stlouisfed.org/fred2/series/M2V

 

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1582.24 as this post is written

Long-Term Charts Of The ECRI WLI & ECRI WLI, Gr. – April 26, 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 four sources :

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 April 26 titled “Recession Watch:  ECRI’s Weekly Leading Indicator Rises Again.”  These charts are on a weekly basis through the April 26 release, indicating data through April 19, 2013.

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

(click on charts to enlarge images)

Dshort 4-26-13 ECRI-WLI 130.6

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

Dshort 4-26-13 ECRI-WLI-YoY 4.0 percent

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

Dshort 4-26-13 ECRI-WLI-growth-since-1965 6.8

 

 

_________

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 1585.40 as this post is written

St. Louis Financial Stress Index – April 25, 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 April 25, incorporating data from December 31,1993 to April 19, 2013 on a weekly basis.  The April 19, 2013 value is -.622 :

(click on chart to enlarge image)

STLFSI_4-25-13 -.622

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

STLFSI_4-25-13 -.622 1-year

 

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed April 26, 2013:

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

_________

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 1585.16 as this post is written

Durable Goods New Orders – Long-Term Charts Through March 2013

Many people place emphasis on Durable Goods New Orders as a prominent economic indicator and/or leading economic indicator.

For reference, below are charts depicting this measure.

First, from the St. Louis Fed site (FRED), a chart through March, last updated on April 24.  This value is 216,276 ($ Millions) :

(click on charts to enlarge images)

DGORDER_4-24-13 216276

Here is the chart depicting this measure on a “Percentage Change from a Year Ago” basis:

DGORDER_4-24-13 Percent Change From Year Ago

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Manufacturers’ New Orders:  Durable Goods [DGORDER] ; U.S. Department of Commerce: Census Bureau ; http://research.stlouisfed.org/fred2/series/DGORDER ; accessed April 25, 2013

 

_________

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 1578.79 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” (pdf) report of April 19, 2013:

from page 17:

(click on charts to enlarge images)

CY Bottom-Up EPS vs. Top-Down Mean EPS (Trailing 26-Weeks) 

EconomicGreenfield 4-24-13 FactSet EPS

from page 18:

Calendar Year Bottom-Up EPS Actuals & Estimates

EconomicGreenfield 4-24-13 FactSet EPS Trends

 

_____

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 1578.96 as this post is written

S&P500 Earnings Estimates For Years 2013, 2014, And 2015

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 tag)

The following estimates are from Exhibit 12 of “The Director’s Report” of April 23, 2013, and represent an aggregation of individual S&P500 component “bottom up” analyst forecasts:

Year 2013 estimate:

$112.38/share

Year 2014 estimate:

$125.02/share

Year 2015 estimate:

$136.31/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 1580.57 as this post is written

Broad-Based Indicators Of Economic Activity

The Chicago Fed National Activity Index (CFNAI) and the Aruoba-Diebold-Scotti Business Conditions Index (ADS Index) are two broad-based economic indicators that I regularly feature in this site.

The current levels of each are notable, as they are vacillating from a short-term perspective and their long-term trends continue to sink.

Doug Short, in his most recent update of “The Philly Fed Business Conditions Index” displays both the CFNAI MA-3 (3-month Moving Average) and ADS Index (91-Day Moving Average) from a couple of perspectives.

Of particular note, two of the charts, shown below, denote where the current levels of each reading is relative to the beginning of past recessionary periods, as depicted by the red dots.

The CFNAI MA-3:

(click on charts to enlarge images)

Dshort 4-22-13 Chicago-Fed-CFNAI-recession-indicator

The ADS Index, 91-Day MA:

Dshort 4-22-13 update - ADS-index-91-day-MA

Also shown in the Doug Short’s aforementioned post is a chart of each with a long-term trendline (linear regression) as well as a chart depicting GDP for comparison purposes.

_________

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 1571.98 as this post is written

Updates Of Economic Indicators April 2013

Here is an update on various indicators that are supposed to predict and/or depict economic activity.  These indicators have been discussed in previous blog posts:

The April Chicago Fed National Activity Index (CFNAI)(pdf) updated as of April 22, 2013:

cfnai_monthly_MA3 4-22-13

The ECRI WLI (Weekly Leading Index):

As of 4/19/13 (incorporating data through 4/12/13) the WLI was at 130.6 and the WLI, Gr. was at 6.6%.

A chart of the WLI, Gr. since 2000, from Doug Short’s blog of April 19 titled “Recession Watch: ECRI’s Weekly Leading Index Rises” :

Dshort 4-19-13 ECRI-WLI-growth-since-2000 6.6

The Aruoba-Diebold-Scotti Business Conditions (ADS) Index:

Here is the latest chart, depicting 4-13-11 to 4-13-13:

ads_4-13-11-4-13-13

The Conference Board Leading (LEI) and Coincident (CEI) Economic Indexes:

As per the April 18 press release, the LEI was at 94.7 and the CEI was at 105.2 in March.

An excerpt from the April 18 release:

Says Ataman Ozyildirim, economist at The Conference Board: “After three consecutive gains, the U.S. LEI dipped slightly in March, with equally balanced strengths and weaknesses among its components. The leading indicator still points to a continuing but slow growth environment. Weakness in consumer expectations and housing permits was offset by the positive interest rate spread and other financial components. Meanwhile, the coincident economic index, a measure of current conditions, is down since December due to a large decline in personal income.”

Here is a chart of the LEI from Doug Short’s blog post of April 18 titled “Conference Board Leading Economic Index:  ‘Declined Slightly in March’” :

 

Dshort 4-18-13 CB-LEI

 

_________

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 1552.69 as this post is written