It's that time of the week. The markets are almost closed. It's time to think about anything except the economy or the markets. To that end...
Friday, May 29, 2009
GDP Decreases Less Than Forecast
From the BEA:Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 5.7 percent in the first quarter of 2009, (that is, from the fourth quarter to the first quarter), according to preliminary estimates released by the Bureau of Economic Analysis....
Are Durable Goods Orders Bottoming?
From the Census Bureau:New orders for manufactured durable goods in April increased $3.0 billion or 1.9 percent to $161.5 billion, the U.S. Census Bureau announced today. This was the second increase in the last three months and followed a 2.1 percent March decrease. Excluding transportation, new orders increased ...
House Prices Rise
House prices rose by 1.2% in May.However, before you crack open the champers, I would draw your attention to the following:1 The figure is provided by Nationwide, an organisation with an interest in talking up the market.2 One swallow does not make a summer, prices are 11.3% lower than they were a year ago.3 Rising house prices will not necessarily get people back to wo...
Forex Fridays
Click on all images for a larger imageOn the weekly chart, notice the dollar formed a double top. But also notice the second double top has weaker underlying technicals -- the RSI and MACD both trended lower. After prices fell from the second top, they formed a bear market flag pattern. But prices have now fallen from that level as well. This move...
Thursday, May 28, 2009
Today's Markets
Click on all images for a larger imageThe markets continue to consolidate in their respective patter...
Quarterly Banking Profile, Pt II
Let's look at some charts from the profile.Click on all images for a larger imageNotice how real estate construction and development loans are spiking; there is no end in sight at this point.Both the non-current and quarterly charge off rates are at the highest level in 15 years.For smaller banks, non-current construction and industrial loans are at...
Quarterly Banking Profile, Pt I
Over the last few days the FDIC has released the quarterly banking profile. I'm going to tackle this in two parts. In the first I'll look at the report. In the second we'll look at the graphs:Sharply higher trading revenues at large banks helped FDIC-insured institutions post an aggregate net profit of $7.6 billion in the first quarter of 2009. Realized gains on securities and other assets at a few large institutions also contributed to the quarter’s profits. First quarter earnings were $11.7 billion (60.8 percent) lower than in the first quarter...
A Statistical Look At Europe
Click on all images for a larger image.The following charts and graphs are from Eurostat:The percentage change from previous quarters and the same quarter a year ago are all decreasing. Decreasing GDP meansIncreasing unemployment, which leads toDecreasing retail sales, which leads toDeclining industrial production.And -- this scenario is leading to...
Thursday Oil Market Round-Up
Click for a larger imageThe weekly chart continues to show strong, bullish tendencies. The MACD and RSI are still rising. Prices continue to advance. In addition, prices are above the SMAs, the 10 week SMA is above the 20 week SMA and both are advancing.The oil market has been advancing since mid February. Notice how prices have continually moved...
Doomsday Scenario
The FSA is currently stress testing banks under the doomsday scenario whereby unemployment reaches 3.7M, house prices halve and the recession lasts another 1.5 years. Needless to say, the FSA will not be publishing the results of its stress test; lest it becomes a self fulfilling prophecy.The question is, what will the FSA do if it finds that banks are likely to fail under such conditions?The FSA claims that its use of stress tests is "embedded in our regular supervisory processes". That being the case, why did it not identify in the past banks,...
Wednesday, May 27, 2009
Today's Markets
Click on all images for a larger image.Bottom line: we're still consolidating across all the averag...
We're Nowhere Near a Bottom in Housing
Click on all images for a larger imageHere are the two relevant charts/graphs:Prices are nowhere near bottoming out.Only 5 cities had a year over year price decline less than 10%.Only three cities had a month to month increa...
Is 2% The New Growth Rate?
From Bloomberg:Americans may have to get used to unemployment greater than 8 percent for the first time since 1983 and an economy that won’t grow much beyond 2 percent as a consequence of the lost confidence in consumer credit that shattered financial markets.By this time next year, “the market will realize that potential growth for the U.S. is no longer 3 percent, but is 2 percent or under,” Mohamed El-Erian, chief executive officer of Pacific Investment Management Co., said in an interview with Bloomberg Radio.“We are transitioning to what we...
Consumer Confidence Up
From the Conference Board:The Conference Board Consumer Confidence Index™, which had improved considerably in April, posted another large gain in May. The Index now stands at 54.9 (1985=100), up from 40.8 in April. The Present Situation Index increased to 28.9 from 25.5 last month. The Expectations Index rose to 72.3 from 51.0 in April.The Consumer...
Wednesday Commodities Round-Up
Click on all images for a larger imageToday I'm going to look at the gold market, largely because of an article I wrote with a friend. Here is a link. The data does not indicate inflation is an issue and so far won't be for the near future. However, that does not mean investors are not concerned about inflation prospects. As a result, keeping an...
Famous Names Scrapped
Abbey, Alliance & Leicester (A&L) and Bradford & Bingley are to be scrapped; or at least their names are to be consigned to the dustbin of history.Santander, the Spanish banking group that owns all three brands, has announced that it will re brand them under the "flame-logo" and Santander name by the end of 2010.Given that the above names currently exist and function side by side in many highstreets, it is fair to assume that once the re branding has occurred the next step will be staff cuts and office closur...
Tuesday, May 26, 2009
Today's Markets
Click for a larger imageNotice the SPYs have formed a flag/pennant pattern at the top of the rally that started at the beginning of March. This means the markets are taking a breather as it were to get a better idea for what the background is and where they want to take the market next. Notice how the other averages are also trading in a pattern...
A Tale of Two Economic Views, Pt. II
Click on all images for a larger imageFrom the Confidence Board:The Conference Board LEI for the U.S. rose sharply in April, the first increase in seven months, and the strengths among its components exceeded the weaknesses for the first time in one and a half years. Stock prices, the interest rate spread, consumer expectations, initial unemployment...
A Tale of Two Economic Views
Click on all images for a larger imageLast week the Federal Reserve issued the latest FOMC minutes. Let's take a look at what they see regarding the current economic conditions.Labor market conditions deteriorated further in March. Private nonfarm payroll employment registered its fifth consecutive large monthly decrease, with losses widespread across...
