Monthly Archives: December 2018

Consumer Confidence Surveys – As Of December 27, 2018

The Doug Short site had a post of December 27, 2018 (“Consumer Confidence Declined Again in December“) that displays 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)

Conference Board Consumer Confidence

University of Michigan Consumer Sentiment

There are a few aspects of the above charts that I find highly noteworthy.  Of course, until the sudden upswing in 2014, the continued subdued absolute levels of these two surveys was 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 notable, especially in light of a variety of other highly disconcerting measures highlighted throughout this site.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2426.22 as this post is written

misc. note – corrections of blog posts

In the July 2, 2010 post I explained my policy with regard to changing the content of posts after the day the posts have been published on the blog.

While I change bad links and incorrect formatting without notification, I believe that changing blog posts’ content warrants disclosure.

Over time I have made corrections to content on various blog posts.  These corrections generally have been for reasons of (factual) accuracy and – for better readability – to correct typos and/or incorrect extraneous wording.

A list of these corrections is seen below.  This list indicates the posts corrected and the reason for such corrections.  The error as seen in the original posting is seen in bold:

Corrected On 11-21-11 (factual)

Re: 11-21-11 WSJ post that says “today, November 10, 2011”

Corrected On 3-12-12 (wording)

Re: 3-7-12 post Dynamics…desc: Highlight and discusses various dynamics and risks inherent in the Federal Reserve’s asset portfolio.

Re: 7-24-09 post Why…desc: The unemployment issue current facing

Corrected On 4-8-12 (factual)

Re: 3-9-12 post U-3 and U-6…(charts updated as of 2-3-12)

Corrected on 4-29-12 (factual)

Re: 4-27-12 post on Ben Bernanke…On Wednesday, January 25

Corrected on 5-25-12 (factual)

Re: 4-16-12 post on Durable Goods New Orders…This February value is 202,568 ($ Millions)

Corrected on 6-1-12

Re: Added post disclaimers on STLFSI posts of May 25, 2012 & May 18, 2012

Corrected on 6-10-12

Re: missing endquotes on 10-19-09 post: “ ”The remarkable thing about the stock market is “the absence of volume associated with it,” Hendry said.

Corrected on 6-11-12 (typo/additional word)

Re: disclaimer on June 14, 2010 & July 16, 2010 posts: …However, as those familiar with this blog are aware, I do not agree with the many of the consensus estimates and much of the commentary in these forecast surveys.

Corrected on 6-11-12 (incorrect word)

Re: on June 18, 2010; December 13, 2010; June 19, 2011; and December 15, 2011 Livingston Survey posts: an S&P500 forecast

Corrected on 6-19-12 (typo/additional word)

Re: WSJ Econ Forecast May 2012 on May 15, 2012:  I found various the following excerpts to be notable

Corrected on 8-6-12 (typo)

RE: 3 Critical Unemployment Charts of July 7, June 2, and May 6  :  On April 24 I wrote a five-part blog posts

Corrected on 9-13-12 (various)

RE: “Real Median Family Income & Poverty Measures For 2010” on 9-14-11 : change title to “Real Median Household Income & Poverty Measures For 2010” and change “Real Median Family Income was $49,445 in 2010” to“Real Median Household Income…” as well as “As seen on the chart on page 8, Real Median Family Income…” to “As seen on the chart on page 8, Real Median Household Income…”

Corrected on 10-7-12 (various)

RE:  Milton Friedman “Free To Choose Videos” February 14, 2011:  originally “For those unaware, Milton Friedman’s entire “Free to Choose” PBS television series of 1980 is available at the following links.  These are the entire episodes, all of which (with the exception of Episode 6) are via Google Video:” ; change to “Milton Friedman’s entire “Free to Choose” PBS television series of 1980 is listed below:”

Corrected on 10-21-12 (factual)

RE: “Real Median Family Income & Poverty Measures” September 20, 2010: remove “Family” from title, first and second paragraphs; and replace with “Household”

Corrected on 10-21-12 (factual)

RE: “U.S. Real Household Income Growth Chart” September 6, 2011:  remove “Family” from first and second paragraphs and replace with “Household”

Corrected on 10-21-12 (factual)

RE: “U.S. Real Mean Household Income Growth Chart 1967-2010” September 14, 2011:  remove “family” from the first and second paragraphs and replace with “Household”

Corrected on 11-30-12 (factual)

RE:  “St. Louis Financial Stress Index – November 22, 2012 Update” November 23, 2012:  re: “This chart was last updated on November 21, incorporating data from December 31,1993 to November 16, 2012 on a weekly basis.  The November 21, 2012 value is -.184” – change November 21 to November 22

Corrected on 1-3-13 (punctuation – missing end quotation mark)

RE:  “Deloitte ‘CFO Signals’ Report 3Q 2012 – Notable Aspects” – September 27, 2012:  re: As seen in page 2 of the report, “Eighty-five CFOs responded during the two weeks ended August 24. More than 75% are from public companies, and 80% are from companies with more than $1B in annual revenue.

Corrected on 1-7-13 (extra words)

RE:  “Average Hourly Earnings Trends” of December 10, 2012 and November 5, 2012:  Re:  “This next chart depicts the same measure on a on a “Percentage Change From A Year Ago” basis.”

Corrected on 1-31-13 (incorrect date)

RE: “Velocity Of Money – Charts Updated Through October 26, 2012” of October 29, 2012:  RE: “All charts reflect quarterly data through the second quarter of 2012, and were last updated as of October 26, 2012.”

Corrected on 2-11-13 (extra word)

RE: “Recession Probability Models” of January 22, 2013:  RE: “For instance, as seen in the the January 14 post…”

Corrected on 3-8-13 (wrong date)

RE: “Long-Term Charts Of The ECRI WLI & ECRI WLI,Gr. – March 1, 2013 Update” of March 1, 2013:  RE: “These charts are on a weekly basis through the March 1 release, indicating data through March 1, 2013.”

Corrected on 3-15-13 (missing end parenthesis)

RE: “Long-Term Charts Of The ECRI WLI & ECRI WLI,Gr. – March 8, 2013 Update” of March 8, 2013:  RE:  “ECRI, March 5, Recession in the Yo-Yo Years (provides a link to a 17-page ECRI report dated March 2013 titled “The U.S. Business Cycle in the Context of the Yo-Yo Years)

Corrected on 4-11-13 (extra words)

RE: “Corporate Bond Yields And OASs” of March 14, 2013:  RE: extra words in “A chart of the The BofA Merrill Lynch US Corporate Master Index Option-Adjusted Spread (OAS), with a value of 1.45%:” as well as “A chart of the The BofA Merrill Lynch US High Yield Master II Index, with an effective yield of 5.92%:”

Corrected on 4-24-13 (incorrect spelling of name)

RE: “S&P500 Earnings Estimates For 2013 & 2014” of March 26, 2013 & February 25, 2013:  RE:  “As many are aware, Thomsen Reuters…”

Corrected on 8-9-13 (incorrect date)

RE: “Recession Probability Models” of July 5, 2013:  RE:  “Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis: Marcelle Chauvet and Jeremy Piger; U.S. Recession Probabilities [RECPROUSM156N]; accessed June 4, 2013:

Corrected on 8-12-13 (double negative)

RE: “Zillow Q2 2013 Home Price Expectations Survey – Summary & Comments” of May 9, 2013:  RE: “The most “bearish” of these forecasts is that of Gary Shilling’s prediction of a –5.05% cumulative price decrease through 2017.”

Corrected on 8-29-13 (improper plural)

RE: “Corporate Profits As A Percentage Of GDP” of May 31, 2013; March 28, 2013; and January 30, 2013:  RE: “While there are many reasons as to why this is so, from a going-forward standpoint I think it is important to recognize both that such a notable conditions exists…”

Corrected on 10-22-13 (lack of hyphens)

RE: “VIX Monthly And Weekly Charts Since 2000” of October 21, 2013; RE: “Here is the VIX Monthly chart, depicted on a LOG scale, with price labels as well as the 13– and 34–month moving averages, seen in the cyan and red lines, respectively:” and “Here is the VIX Weekly chart, depicted on a LOG scale, with price labels as well as the 13 and 34 week moving average, seen in the cyan and red lines, respectively:”

Corrected on 11-14-13 (wrong date)

RE: “The November 2013 Wall Street Journal Economic Forecast Survey” of November 12, 2013; RE:  “The October Wall Street Journal Economic Forecast Survey was published on November 7, 2013.”

Corrected on 11-18-13 (misspelled name)

RE: “Janet Yellin’s Nomination” of October 14, 2013; RE: “The nomination of Janet Yellin to lead the Federal Reserve has generated much recent commentary.” Also: “While I may comment at length upon her nomination at a later time, for now I would like to highlight, for reference purposes, a few excerpts in the October 10, 2013 New York Times article titled “Yellin’s Path From Liberal Theorist to Fed Voice for Jobs.”

Corrected on 12-17-13 (misspelled name)

RE: “Janet Yellin’s Speech of June 2, 2011 – Notable Excerpts” of June 9, 2011; RE:  “On June 2, Janet Yellin…”

Corrected on 12-17-13 (misspelled name)

RE: “Finance Reform Bill – A Few Comments” of July 19, 2010; RE:  “I included the quote from Janet Yellin…”

Corrected on 12-17-13 (misspelled name)

RE: “President Obama’s Remarks on Ben Bernanke” of August 28, 2009; RE:  “With regard to this ‘out of the box thinking’ and and ‘bold, persistent experimentation’ I would like to refer to a speech Janet Yellin…”

Corrected on 1-9-14 (incorrect date)

RE: “The January 2, 2014 value is -.927:”

Corrected on 4-1-14 (incorrect date)

RE: “Durable Goods New Orders – Long-Term Charts Through January 2014” of February 27, 2014; RE: First, from the St. Louis Fed site (FRED), a chart through December, last updated on February 27, 2014.  This value is 224,975 ($ Millions) :

Corrected on 7-27-14 (omission of information)

RE: “Standard & Poor’s S&P500 Earnings Estimates For 2014 And 2015…” of May 21, 2014; RE:

-From a “top down” perspective, operating earnings of $148.18/share

-From a “top down” perspective, “as reported” earnings of $144.60/share

Corrected on 8-11-14 (wrong date on post)

RE:  “Velocity of Money…” post of April 30, 2014:  RE: wrong date under one chart; “Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed January 30, 2014:”

Corrected on 9-2-14 (wrong date on post)

RE:  “Updates Of Economic Indicators July 2014” post of July 21, 2014:  RE: missing date; “Here is a chart of the ECRI WLI,Gr., from Doug Short’s July, 2014 post…”

Corrected on 9-4-14 (wrong date on post)

RE:  “Chicago Fed National Financial Conditions Index (NFCI)” post of August 27, 2014:  RE: wrong date; “The ANFCI chart below was last updated on August 27, incorporating data from January 5,1973 to August 22, 2014, on a weekly basis.  The August 27, 2014 value is -.48:”

Corrected on 11-27-14 (clarification)

RE:  “Long-Term Charts Of The ECRI WLI & ECRI WLI,Gr. – November 21, 2014 Update” post of November 21, 2014:  RE: “… ECRI has reiterated the view that the U.S. economy is currently in a recession…” changed to “…ECRI had reiterated (but no longer believes per the November 19, 2014 interview) that the U.S. economy was in a recession…”

Corrected on 11-27-14 (missing parenthesis)

RE: “U.S. Dollar Decline – September 2, 2014 Update” post of September 2, 2014:  RE: “…by the dashed light blue line):”

Corrected on 11-27-14 (missing parenthesis)

RE: “U.S. Dollar Decline – August 1, 2014 Update” post of August 1, 2014:  RE: “…by the dashed light blue line):”

Corrected on 11-27-14 (missing parenthesis)

RE: “U.S. Dollar Decline – July 1, 2014 Update” post of July 1, 2014:  RE: “…by the dashed light blue line):”

Corrected on 11-27-14 (phrase corrections)

RE: “Money Supply Charts Through September 2014” post of October 29, 2014: RE:” The second shows M2…” changed to “The two charts below show M2…”

Corrected on 11-27-14 (phrase corrections)

RE: “Money Supply Charts Through August 2014” post of September 29, 2014: RE:” The second shows M2…” changed to “The two charts below show M2…”

Corrected on 11-27-14 (phrase corrections)

RE: “Money Supply Charts Through May 2014” post of June 17, 2014: RE:” The second shows M2…” changed to “The two charts below show M2…”

Corrected on 2-11-15 (date correction)

RE: “Velocity Of Money – Charts Updated Through July 30, 2014” post of July 30, 2014: RE: “Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed January 30, 2014:” changed to “Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed July 30, 2014:”

Corrected on 3-25-15 (date correction)

RE: “Durable Goods New Orders – Long-Term Charts Through January 2015” post of February 26, 2015: RE: “First, from the St. Louis Fed site (FRED), a chart through December, updated on February 26, 2015.  This value is 236,147 ($ Millions):”

Corrected on 3-27-15 (date correction)

Re: “Corporate Profits As A Percentage Of GDP” post of November 25, 2014:  RE: “As one can see from the long-term chart below (updated through the first quarter)…”

Corrected on 3-27-15 (date correction)

Re: “Corporate Profits As A Percentage Of GDP” post of August 28, 2014:  RE: “As one can see from the long-term chart below (updated through the first quarter)…”

Corrected on 6-12-15 (date correction)

Re: “Total Household Net Worth As A Percent Of GDP 4Q 2014” post of March 12, 2015:  RE: “The following chart is from the CalculatedRisk blog post of March 12, 2014…”

Corrected on 8-18-15 (incorrect link and accompanying comments)

Re:  “The August 2015 Wall Street Journal Economic Forecast Survey” post of August 13, 2015:  RE: “The headline is “WSJ Survey:  Economists Expect Fed Rate Liftoff in September.” Link and excerpted comments changed.

Corrected on 8-31-15 (wrong date)

Re:  “Corporate Profits As A Percentage Of GDP” post of May 29, 2015:  RE: “As one can see from the long-term chart below (updated through the fourth quarter)…”

Corrected on 8-31-15 (missing parenthesis)

RE: “The U.S. Economic Situation – April 23, 2015 Update” post of April 23, 2015:  RE: “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 April 17, 2015, with a last value of 17826.30):”

Corrected on 8-31-15 (missing parenthesis)

RE: “The U.S. Economic Situation – May 22, 2015 Update” post of May 22, 2015:  RE:  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 May 15, 2015, with a last value of 18272.56):”

Corrected on 8-31-15 (missing parenthesis)

RE: “The U.S. Economic Situation – June 22, 2015 Update” post of June 22, 2015:  RE: “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 June 19, 2015, with a last value of 18014.28):”

Corrected on 8-31-15 (missing parenthesis)

RE: “The U.S. Economic Situation – July 23, 2015 Update” post of July 23, 2015:  RE: “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 July 17, 2015, with a last value of 18086.45):”

Corrected on 12-11-15 (incorporate previously unavailable updated chart)

RE: “December 2015 Duke/CFO Global Business Outlook Survey” post of December 10, 2015:  RE: put in December chart that was unavailable on 12/10/15

Corrected on 12-14-15 (wrong year referenced)

RE: “2015 Estimates For S&P500 Earnings & Price Levels” post of December 15, 2014:  RE: “The article also mentions that among the investment strategists, average 2014 GDP growth is 3.0%.”

Corrected on 12-23-15 (wrong date referenced)

RE: “Chicago Fed National Financial Conditions Index” post of December 16, 2015:  RE: “The NFCI chart below was last updated on December 16, 2015 incorporating data from January 5,1973 to December 11, 2015, on a weekly basis.  The December 16, 2015 value is -.60:

Corrected on 2-11-16 (wrong date referenced)

RE: “The January 2016 Wall Street Journal Economic Forecast Survey” post of January 14, 2016:  RE: full-year 2017:  2.3%

Corrected on 2-18-16 (missing word)

RE: “10-Year Treasury Yield – Long-Term Chart As Of January 7, 2015” of January 7, 2015:  RE: “As a reference, here is a long-term chart of the 10-Year Treasury yield since 1980, depicted on a monthly basis, LOG scale, with price labels:”

Corrected on 5-17-16 (extra letter)

RE: “Monthly Changes In Total Nonfarm Payrolls” of February 9, 2016:  RE: “The third charts shows a long-term chart…”

Corrected on 5-26-16 (wrong title of report)

RE: “S&P500 2015, 2016, 2017 & 2018 EPS Estimates” of April 19, 2016:  RE: “The following estimates are from Exhibit 9C of ‘The Director’s Report’…”

Corrected on 5-26-16 (wrong date referenced)

RE: “Chicago Fed National Financial Conditions Index (NFCI)” of May 18, 2016: RE: 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 May 12, 2016 update (reflecting data through May 5) is -.919.

Corrected on 5-31-16 (wrong date referenced)

RE: “Corporate Profits As A Percentage Of GDP” of March 28, 2016:  RE: “As one can see from the long-term chart below (updated through the third quarter)…

Corrected on 8-22-16 (wrong date and quarter referenced)

RE: “Walmart’s Q1 2017 Results – Comments” of May 19, 2016:  RE:  “I found various notable items in Walmart’s Q1 2017 management call transcript (pdf) dated February 18, 2016.  (as well, there is Walmart’s press release of the Q4 results (pdf) and related presentation materials)”

Corrected on 10-18-16 (wrong date referenced)

RE:  “Disturbing Charts (Update 24)” of October 13, 2016:  RE: “The Chicago Fed National Activity Index (CFNAI) 3-month moving average (CFNAI-MA3)(last updated 10-7-16):

Corrected on 11-16-16 (wrong date referenced)

RE:  “Monthly Changes In Total Nonfarm Payrolls – August 8, 2016 Update” of August 8, 2016:  RE: “The second chart shows a long-term chart of the same month-over-month change in total nonfarm payrolls (reports of January 1940 through the present report of July 2016):

Also:

RE: “Lastly, the fifth chart shows the total nonfarm payrolls number on a “percent change from year ago” basis from January 1940 – July 2016:”

Corrected on 11-16-16 (wrong date referenced)

RE:  “Monthly Changes In Total Nonfarm Payrolls – May 9, 2016 Update” of May 9, 2016:  RE: “The second chart shows a long-term chart of the same month-over-month change in total nonfarm payrolls (reports of January 1939 to the present report of April 2016):

Also:

RE:  “Lastly, the fifth chart shows the total nonfarm payrolls number on a “percent change from year ago” basis from January 1939– July 2016:”

Corrected on 12-14-16 (wrong date referenced)

RE: “Chicago Fed National Financial Conditions Index (NFCI)” of December 7, 2016:  RE:  Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed December 2, 2016:

Corrected on 2-6-17 (wrong number referenced)

RE: “Monthly Changes In Total Nonfarm Payrolls – November 7, 2016 Update” of November 7, 2016:  RE: The third chart shows the aggregate number of total nonfarm payrolls, from January 1939 – October 2016 (October 2016 value of 161.000 million):

Corrected on 3-29-17 (wrong number referenced)

RE: “The Yield Curve – December 22, 2016” of December 22, 2016:  RE: As an indication of the yield curve, below is a weekly chart from January 1, 1990 through December 21, 2016.  The top two plots show the 10-Year Treasury and 2-Year Treasury yields.  The third plot shows the (yield) spread between the 10-Year Treasury and 2-Year Treasury, with the October 20, 2016 closing value of 1.34%.  The bottom plot shows the S&P500:

Corrected on 4-4-17 (wrong number referenced)

RE: “Recession Probability Models – March 2017” of March 6, 2017:  RE:  The two models featured above can be compared against measures seen in recent blog posts.  For instance, as seen in the February 9 post titled “The February 2017 Wall Street Journal Economic Forecast Survey“ economists surveyed averaged a 16.49% probability of a U.S. recession within the next 12 months.

Corrected on 4-28-17 (wrong date referenced)

RE: “Velocity Of Money – Charts Updated As Through January 27, 2017” of January 27, 2017:  RE:  All charts reflect quarterly data through the 4th quarter of 2017, and were last updated as of January 27, 2017.  As one can see, one of the three measures is at an all-time low for the periods depicted:

Corrected on 5-9-17 (wrong date referenced)

RE: “Markets During Periods Of Federal Reserve Intervention – March 27, 2017 Update” of March 27, 2017:  RE:  For reference purposes, here is an updated chart (through March 27, 2017) from Doug Short’s blog post of January 20

Corrected on 9-25-17 (title of referenced post wrong)

RE: “Total Household Net Worth As A Percent Of GDP 1Q 2017” of June 8, 2017:  RE:  The following chart is from the CalculatedRisk post of June 8, 2017 titled “Fed’s Flow of Funds:  Household Net Worth increased in Q4.”

Corrected on 10-18-17 (date wrong)

RE: “Standard & Poor’s S&P500 Earnings Estimates For 2017 And 2018 – As Of September 13, 2017” of September 18, 2017:  RE:  “For reference purposes, the most current estimates are reflected below, and are as of August 10, 2017:

Corrected on 10-23-17 (wrong chart displayed)

RE: “Chicago Fed National Financial Conditions Index (NFCI)” of October 18, 2017:  RE:  ANFCI chart was from 10-12-17

Corrected on 12-14-17 (wrong date)

RE: “2017 Estimates For S&P500 Earnings & Price Levels” of December 19, 2016:  RE:  The article also mentions that among the investment strategists, average expected 2016 GDP growth is 2.4%.

Corrected on 2-5-18 (wrong date)

RE: “Recession Probability Models – January 2018” of January 4, 2018:  RE: For comparison purposes, it showed a 10.9539% probability through December

Corrected on 2-15-18 (misspelled word)

RE: ““Taylor Rule” Chart – August 11, 2017 Update” of August 18, 2017:  RE:  As discussed in that post – and for other reasons – the level of the Fed Funds rate – and whether its level is appropriate – has vast importantance…

Corrected on 4-16-18 (missing word – “not”)

RE: “Charts Indicating Economic Weakness – September 2017” of September 6, 2017:  RE:  As I have stated in past commentaries, my analyses indicate that surveys or “market-based” measures concerning deflation will provide adequate “advance warning” of this deflation.

Corrected on 6-1-18 (incorrect number)

RE: “U-3 And U-6 Unemployment Rate Long-Term Reference Charts As Of May 4, 2018” of May 4, 2018:  RE:  Here is the U-3 chart, currently showing a 3.8% unemployment rate:

Corrected on 6-18-18 (typo)

RE: “Charts Indicating Economic Weakness – May 2018” of May 14, 2018:  RE:  One recent development that appears to be problematical aspects in consumer spending is the performance of the consumer staples stocks. 

Corrected on 6-18-18 (typo)

RE: “Charts Indicating Economic Weakness – March 2018” of March 15, 2018:  RE:  As seen in many measures, including that seen below, the problem chronic (i.e long-term) in nature. 

Corrected on 7-10-18 (typo)

RE: “Charts Indicating Economic Weakness – May 2018” of May 14, 2018:  RE:  source:  U.S. Bureau of Economic Analysis, Light Weight Vehicle Sales: Autos and Light Trucks [ALTSALES], retrieved from FRED, Federal Reserve Bank of St. Louis; accessed April 10, 2017:

Corrected on 8-28-18 (missing label)

RE: “Standard & Poor’s S&P500 EPS Estimates 2018 2019 – June 15, 2018″ of June 21, 2018:  RE: -From a “bottom up” perspective, “as reported” earnings of $164.77

Corrected on 9-20-18 (missing transition phrase)

RE: “Deloitte “CFO Signals” Report Q2 2018 – Notable Aspects” of June 21, 2018 RE:  All respondents are CFOs from the US, Canada, and Mexico, and the vast majority are from companies with more than $1 billion in annual revenue. For a summary of this quarter’s response demographics, please see the sidebars and charts on this page. For other information about participation and methodology, please contact [email protected]

from page 3:

Corrected on 9-24-18 (wrong figure)

RE: “Updates Of Economic Indicators August 2018” of August 27, 2018:  RE:  As per the August 17, 2018 press release, titled “The Conference Board Leading Economic Index (LEI) for the U.S. Increased in July” (pdf) the LEI was at 1110.7, the CEI was at 104.2, and the LAG was 105.2 in July.

Corrected on 9-24-18 (typo)

RE: “Chicago Fed National Financial Conditions Index (NFCI)” of September 6, 2018:  RE:  The ANFCI chart below was last updated on Semtember 6, 2018 incorporating data from January 8,1971 through August 31, 2018, on a weekly basis.  The August 31 value is -.69:

Corrected on 9-27-18 (wrong date)

RE: “Chicago Fed National Financial Conditions Index (NFCI)” of September 19, 2018:  RE:  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 September 13, 2018 update (reflecting data through August 7, 2018) is -1.267.

Corrected on 10-17-18 (wrong chart)

RE: “Disturbing Charts (Update 32)” of October 16, RE:  chart for TOTLL was actually chart for TOTBKCR

Corrected on 10-17-18 (wrong chart)

RE: “Updates Of Economic Indicators October 2018” of October 22, RE: As per the October 18, 2018 press release, titled “The Conference Board Leading Economic Index (LEI) for the U.S. Increased in August” (pdf) the LEI was at 111.8, the CEI was at 104.4, and the LAG was 105.3 in September.

Corrected on 12-21-18 (wrong date)

RE: “The Wall Street Journal Economic Forecasting Survey” of November 15, RE:  The November 2018 Wall Street Journal Economic Forecast Survey was published on October 11, 2018.

Corrected on 12-24-18 (missing word)

RE: “Standard & Poor’s S&P500 EPS Estimates 2018 2019 – November 15, 2018” of November 19, RE: “For reference purposes, the most current estimates are reflected below, and are as November 15, 2018:”

Corrected on 12-24-18 (wrong date)

RE: “2018 Estimates For S&P500 Earnings & Price Levels” of December 11, 2017:  RE:  “Included in the story, 10 investment strategists give various forecasts for 2017 including S&P500 profits, S&P500 year-end price targets, GDP growth, and 10-Year Treasury Note Yields.”

Some of the above corrections have been made after I received reader comments alerting me of the issues.  I appreciate such notifications, and ask that if one spots factual inaccuracies, typos and/or bad links, please notify me of such via email message to [email protected]

Updates Of Economic Indicators December 2018

Here 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 December 2018 Chicago Fed National Activity Index (CFNAI) updated as of December 24, 2018:

The CFNAI, with current reading of .22:

CFNAI

source:  Federal Reserve Bank of Chicago, Chicago Fed National Activity Index [CFNAI], retrieved from FRED, Federal Reserve Bank of St. Louis, December 24, 2018;
https://fred.stlouisfed.org/series/CFNAI

The CFNAI-MA3, with current reading of .12:

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, December 24, 2018;
https://fred.stlouisfed.org/series/CFNAIMA3

The ECRI WLI (Weekly Leading Index):

As of December 21, 2018 (incorporating data through December 14, 2018) the WLI was at 144.7 and the WLI, Gr. was at -3.9%.

A chart of the WLI,Gr., from the Doug Short’s site ECRI update post of December 21, 2018:

ECRL WLI,Gr.

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

Here is the latest chart, depicting the ADS Index from December 31, 2007 through December 15, 2018:

ADS Index

The Conference Board Leading (LEI), Coincident (CEI) Economic Indexes, and Lagging Economic Indicator (LAG):

As per the December 20, 2018 press release, titled “The Conference Board Leading Economic Index (LEI) for the U.S. Increased Slightly in November” (pdf) the LEI was at 111.8, the CEI was at 104.9, and the LAG was 106.0 in November.

An excerpt from the release:

“The LEI increased slightly in November, but its overall pace of improvement has slowed in the last two months,” said Ataman Ozyildirim, Director of Economic Research at The Conference Board. “Despite the recent volatility in stock prices, the strengths among the leading indicators have been widespread. Solid GDP growth at about 2.8 percent should continue in early 2019, but the LEI suggests the economy is likely to moderate further in the second half of 2019.”

Here is a chart of the LEI from the Doug Short’s site Conference Board Leading Economic Index update of December 20, 2018:

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.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2351.10 as this post is written

S&P500 Price Projections – Livingston Survey December 2018

The December 2018 Livingston Survey (pdf) published on December 21, 2018 contains, among its various forecasts, a S&P500 forecast.  It shows the following price forecast for the dates shown:

Dec. 31, 2018  2754.4

Jun. 28, 2019   2829.9

Dec. 31, 2019  2900.0

Dec. 31, 2020 3000.0

These figures represent the median value across the forecasters on the survey’s panel.

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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 2476.57 as this post is written

Money Supply Charts Through November 2018

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 December 21, 2018 depicting data through November 2018, with a value of $15,631.3 Billion:

MZM money supply chart

Here is the “MZM Money Stock” chart on a “Percent Change From Year Ago” basis, with a current value of 3.0%:

MZM money stock Percent Change From Year Ago

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed December 21, 2018;
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 December 20, 2018, depicting data through November 2018, with a value of $14,318.1 Billion:

M2 Money Stock chart

Here is the “M2 Money Stock” chart on a “Percent Change From Year Ago” basis, with a current value of 3.9%:

M2 Money Stock Percent Change From A Year Ago chart

Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed December 21, 2018;
https://research.stlouisfed.org/fred2/series/M2SL

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 2488.81 as this post is written

Durable Goods New Orders – Long-Term Charts Through November 2018

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

For reference, below are two charts depicting this measure.

First, from the St. Louis Fed site (FRED), a chart through November 2018, updated on December 21, 2018. This value is $250,827 ($ Millions):

(click on charts to enlarge images)

Durable Goods New Orders chart

Second, here is the chart depicting this measure on a “Percentage Change from a Year Ago” basis, with a last value of 5.3%:

Durable Goods New Orders 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; accessed December 21, 2018;
http://research.stlouisfed.org/fred2/series/DGORDER

_________

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.

_____

The Special Note summarizes my overall thoughts about our economic situation

SPX at 2477.27 as this post is written

The U.S. Economic Situation – December 21, 2018 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)

A Special Note On Our Economic Situation

Forewarning Pronounced Economic Weakness

Thoughts Concerning The Next Financial Crisis

Was A Depression Successfully Avoided?

Has the Financial System Strengthened Since the Financial Crisis?

The Next Crash And Its Significance

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 December 14, 2018, with a last value of 24100.51):

(click on chart to enlarge image)(chart courtesy of StockCharts.com)

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 2467.42 as this post is written

Deflation Probabilities – December 20, 2018 Update

While I do not agree with the current readings of the measure – I think the measure dramatically understates the probability of deflation, as measured by the CPI – the Federal Reserve Bank of Atlanta maintains an interesting data series titled “Deflation Probabilities.”

As stated on the site:

Using estimates derived from Treasury Inflation-Protected Securities (TIPS) markets, described in a technical appendix, this weekly report provides two measures of the probability of consumer price index (CPI) deflation through 2022.

A chart shows the trends of the probabilities.  As one can see in the chart, the readings are volatile.

As for the current weekly reading, the December 20, 2018 update states the following:

Both the 2017–22 deflation probability and the 2018–23 deflation probability were 7 percent on December 19, unchanged from December 12. These deflation probabilities, measuring the likelihoods of net declines in the consumer price index over the five-year periods starting in early 2017 and early 2018, are estimated from prices of the five-year Treasury Inflation-Protected Securities (TIPS) issued in April 2017 and April 2018 and the 10-year TIPS issued in July 2012 and July 2013. The next deflation probabilities update is scheduled for January 3, 2019.

_________

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 2478.77 as this post is written

Jerome Powell’s December 19, 2018 Press Conference – Notable Aspects

On Wednesday, December 19, 2018 Jerome Powell gave his scheduled December 2018 FOMC Press Conference. (link of video and related materials)

Below are Jerome Powell’s comments I found most notable – although I don’t necessarily agree with them – in the order they appear in the transcript.  These comments are excerpted from the “Transcript of Chairman Powell’s Press Conference“ (preliminary)(pdf) of December 19, 2018, with the accompanying “FOMC Statement” and “Economic Projections of Federal Reserve Board Members and Federal Reserve Bank Presidents, December 2018“ (pdf).

From Chairman Powell’s opening comments:

Over the past year, the economy has been growing at a strong pace, the unemployment rate has been near record lows, and inflation has been low and stable. All of those things remain true today. Since the September meeting of the FOMC, however, some crosscurrents have emerged. I’ll explain how my colleagues and I are incorporating those crosscurrents into our judgments about the outlook and the appropriate course of policy. 

Since September, the U.S. economy has continued to perform well, roughly in line with our expectations. The economy has been adding jobs at a pace that will continue bringing the unemployment rate down over time. Wages have moved up for workers across a wide range of occupations, a welcome development. Inflation has remained low and stable, and is ending the year a bit more subdued than most had expected. Although some American families and communities continue to struggle and some longer-term economic problems remain, the strong economy is benefiting many Americans. 

Despite this robust economic backdrop and our expectation for healthy growth, we have seen developments that may signal some softening relative to what we were expecting a few months ago. Growth in other economies around the world has moderated somewhat over the course of 2018, albeit to still-solid levels. At the same time, financial market volatility has increased over the past couple of months, and overall financial conditions have tightened–that is, they have become less supportive of growth. 

In our view, these developments have not fundamentally altered the outlook. Most FOMC participants have, instead, modestly lowered their growth and inflation forecasts for next year. The projections of Committee participants released today show growth continuing at healthy levels, the unemployment rate falling a bit further next year, and inflation remaining near 2 percent. The projections also show a modestly lower path for the federal funds rate, which should support the economy and keep us near our goals. As the economy struggled to recover from the financial crisis and the subsequent recession, the Committee held our policy rate near zero for seven years to give the economy the best chance to recover. And the economy did recover steadily, if slowly at times. Three years ago the Committee came to the view that the best way to achieve our mandate was to gradually move interest rates back to levels that are more normal in a healthy economy. Today, we raised our target range for short-term interest rates by another quarter of a percentage point. As I’ve mentioned, most of my colleagues expect the economy to continue to perform well in the coming year. Many FOMC participants had expected that economic conditions would likely call for about three more rate increases in 2019. We have brought that down a bit and now think it is more likely that the economy will grow in a way that will call for two interest rate increases over the course of next year.

Jerome Powell’s responses as indicated to the various questions:

BINYAMIN APPLEBAUM. Binyamin Applebaum, The New York Times. You’re about to undershoot your inflation target for the seventh straight year. Your new forecasts say that you’re going to undershoot it for the eighth straight year. Should we interpret the dot plot is suggesting that some members of your Committee believe that policy should be in a restrictive range by the end of next year? And if so, can you help us to understand why people would be advocating restrictive monetary policy at a time of persistent inflation undershoots?

CHAIRMAN POWELL. Well, we, as a Committee, we do not desire inflation undershoots. And you’re right, inflation has continued to surprise to the downside, not by a lot though, I think. We’re very close to 2 percent, and you know, we do believe it’s a symmetric goal for us. Inflation is symmetric around 2 percent, and that’s how we’re going to look at it. We’re not trying to be under 2 percent. We’re trying to be symmetrically around 2 percent, and I don’t, you know, I’ve never said that I feel like we’ve achieved that goal yet. The only way to achieve inflation symmetrically around 2 percent is to have inflation symmetrically around 2 percent, and we’ve been close to that. We haven’t gotten there yet, and we have not declared victory on that. So, that remains to be accomplished.

JEANNA SMIALEK. Hi, Jeanna Smialek, Bloomberg News. Just following up on Binyamin’s question. I guess if you haven’t achieved 2 percent inflation and you don’t see an overshoot, which would be sort of implied by a symmetrical target, what’s the point in raising rates again at all? 

CHAIRMAN POWELL. So again, I go back to the health of the economy. When you look at 2018, as I mentioned, this the best year since the financial crisis. You’ve had growth well above trend. You’ve got unemployment dropping. You’ve got inflation moving up to 2 percent. And we also have a positive forecast, as I mentioned, and in that context, we think this move was appropriate for what is a very healthy economy. 

Policy at this point does not need to be accommodative. It can move to neutral. It seems appropriate that it be neutral. We’re now at the bottom end of range of estimates of neutral. So that’s the basis upon which we made the decision. I also think we took onboard, you know, the risks to that, and, you know, we’re certainly cognizant of them. 

also:

NANCY MARSHALL-GENZER. Nancy Marshall-Genzer with Marketplace. Do you still think core PCE is a good measure of whether the economy is overheating? What do you think of other measures like setting a target for economic growth and relying more on that? 

CHAIRMAN POWELL. Well, I think we look at both, but core PCE is a good indicator. It has, what’s happened over really 50 years is that inflation has become much less reactive to changes in growth. There was a time when inflation reacted really quickly to changes in growth and changes in unemployment. And that time is behind us. And that is often attributed to the success of central banks in anchoring inflation expectations so that people believe that inflation will come back to the target or around the target so it doesn’t go down as much, inflation doesn’t go down as much, and a downturn doesn’t go up as much when the, you know, when the economy is strong.  It’s really true, though, that inflation has not reacted a lot on a road from 10 percent unemployment to now 3.7 percent unemployment. Now it did move up last year. But in terms of just targeting growth, you know, I think actually think our dual mandate works very well, which is maximum employment and stable prices. Most of the time, those two things work together. When they work temporarily in different ways, we take a balanced approach. But I think that approach has served us well, and I think we can work well with it.

also:

COURTENAY BROWN. Hi Chairman, Courtenay Brown from Axios. I’m wondering if you could clear up what’s become a little bit of a debate in the financial community. You said in October in an interview with PBS that interest rates were a long way from neutral. A month later you said interest rates were just below neutral. And I think a lot of people interpreted that as a shift in tone from you. Were they right to interpret it that way? 

CHAIRMAN POWELL. You know, monetary policy is a forward-looking exercise, and I’m going to, I’m just going to stick with that. It’s, where we are right now is we’re at the lower end of the range of neutral. We’ve arrived effectively at the bottom end of that range. And, you know, there are implications of that. For that, as I mentioned, going forward, there’s real uncertainty about the path, the pace rather, and the destination for further rate increases. And we’re going to be letting incoming data inform our thinking about the appropriate path.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 2470.23 as this post is written

Four Charts Of Recent S&P500 Price Volatility – December 20, 2018

This post is an update to past posts regarding stock market volatility.

While I track many different measures of volatility, I find the following charts to be both simple and clear in depicting the recent volatility in the stock market.

Overall, my analyses indicates that there are many reasons for this volatility, and the volatility is highly significant.

First, a one-year daily depiction of the S&P500 through Wednesday’s (December 19, 2018) close, with a 50-day moving average (MA50) depicted by the blue line:

(click on chart to enlarge image)(charts courtesy of StockCharts.com)

Second, a three-month daily depiction of the S&P500 through Wednesday’s (December 19, 2018) close, with a 50-day moving average (MA50) depicted by the blue line:

S&P500 daily chart

Third, a three-month depiction of the S&P500 in 60-minute intervals through Wednesday’s (December 19, 2018) close, with a 50-hour moving average (MA50) depicted by the blue line:

S&P500 chart

Fourth, a one-month depiction of the S&P500 in 10-minute intervals through Wednesday’s (December 19, 2018) close, with a 50-period moving average (MA50) depicted by the blue line:

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 2506.96 as this post is written