Weekly Indicators for April 30, 2010

- by New Deal democratWith the exception of this morning's Q1 GDP report of +3.2% annualized, with consumption excellently providing a +3.6% boost, this was a very slow week for monthly economic data. The Chicago PMI (thought to be a preview of the ISM indexes next week) blew out to the upside at 63.8 (over 50 means expansion). The backlog of orders - a leading indicator - also blew out to the upside at 61.4. The Chicago Fed’s National Activity Index (CFNAI) also ticked upward. The employment cost index was up 0.6%, but the wage component...

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GDP Growth and the Unemployment Rate

Note the real percentage change in YOY real GDP growth hits bottom before the unemployment rate starts to drop. In other words, the unemployment rate is a lagging indicat...

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GDP and Establishment Job Growth

Consider the following chart:The YOY percentage change in real GDP rate bottoms before the percentage change in the total establishment jobs. But job growth soon follo...

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GDP Up 3.2%

From the BEAReal gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.2 percent in the first quarter of 2010, (that is, from the fourth quarter to the first quarter), according to the "advance" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased 5.6 percent. The Bureau emphasized that the first-quarter advance estimate released today is based on source data that are incomplete or subject to further...

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Yesterday's Market

Let's start with a look at yesterday's IWMs:Prices gapped higher at the open (a) and then used the EMAs for technical support throughout the day (b), ending with a big buy trend at the end of trading on high volume (c).This is important because the IWMs represent risk-based capital. Yesterday's move indicated traders are comfortable with the idea...

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The Big Picture -- Better Late Than Never .....

Barry at the Big Picture makes the following call:1. The Economy is recovering; The recession is over: Of that, we have no doubt, as the data is clear. The free fall of 2008-09 is over, and a gradual improvement is seen across the board. Industrial manufacturing, exports, autos, retail sales, durable goods, travel all confirm the economy is “healing.” 2. But, the recovery is “Lumpy”: — Part of the reason some people doubt the recovery story is how unevenly distributed the improvements are. Geographically, much of the country is still soft....

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Treasury Market Update

Take a look at the following charts of the IEI (3-7 year Treasuries), IEFs (7-10 year Treasuries) and the TLTs (20+ year Treasuries). Notice that each of these sections of the curve is in an upward sloping channel. Also note that all three are at important areas of technical resistance in the form of a downward sloping trend line.Fundamentally, US...

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Jobless Claims Drop

From Bloomberg:Initial jobless claims fell in the April 24 week to 448,000 vs. 459,000 in the prior week, which is revised 3,000 higher. The four-week average is up 1,500 to 462,500 and compares negatively with 448,000 at the end of March.Here is the accompanying chart:While I am pleased the number dropped, the main issue going forward is getting this...

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Yesterday's Market

There were several important story lines yesterday. First, we saw a stabilization of the equity markets.Both the SPYs and the QQQQs gapped a bit higher at the open, but then essentially moved sideways for the remainder of the day. This is a good development, especially in relation to the previous days trading where the markets dove lower on news from...

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Greek Contagion Spreads

The eurozone crisis worsened yesterday, when Standard & Poor cut Spain's credit rating after downgrading both Greece and Portugal.Meanwhile the estimate as to how much Greece needs from the IMF/EU has risen to Euro 120BN.The only way out of this mess now is for Greece to leave the Euro AS...

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GE Sees Economy Stabilizing

From the AP:General Electric Co. said Wednesday that the broader economy and its own industrial and lending businesses are improving, signs the "clouds are breaking" after one of the worst years ever for the company. Some key economic indicators have stabilized, including the high unemployment rate and the decline in housing prices, GE told investors at its annual meeting in Houston. Bank losses have stopped growing and capital markets have improved, a positive sign for GE's troubled GE Capital lending unit that has been...

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A Closer Look at Case Shiller Data

First, the good news:The year over year number is leveling off. HOWEVER:Only one city saw a month to money increase in prices in February. That tells us prices have not found an equilibrium lev...

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Zero Hedge ---> Zero Credibility on tax withholding

- by New Deal democratThere has been a blog war going on in the last month between Matt Trivisonno and Zero Hedge concerning tax withholding. Trivisonno contends that withheld taxes have been surging. Zero Hedge contends that there has been a "collapse" in tax withholding.Considering this data is public record at the US Treasury's page, there should be no debate. You are about 5 clicks and less than a minute away from double-checking either of their claims.Trivisonno has put himself under a disadvantage. Since Karl Denninger cribbed his work without...

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Consumer Confidence Remains In Range

From the Conference Board:Consumers’ appraisal of present-day conditions was more positive in April. Those claiming conditions are "good" increased to 9.1 percent from 8.5 percent, while those claiming business conditions are "bad" declined to 40.2 percent from 42.1 percent. Consumers’ appraisal of the labor market also improved. Those saying...

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Stephanopoulos and Son

S&P has cut Greece's credit rating to junk status, thus bringing to a head the ongoing the crisis that has been brewing for months.Juergen Stark, European Central Bank Executive Board member, has warned that the current trend is not sustainable:"The current trend in fiscal policies is simply not sustainable. ... The onus is now on governments to ensure that the crisis that initially affected the financial sector, and subsequently the real economy, does not lead to a full-blown sovereign debt crisis. Averting it will require very ambitious and...

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Yesterday's Market

Yesterday's action was severe. It could probably be a short-term (3-6 week) game changer. The market has been technically overbought for some time, but needed a fundamental event to to trigger some selling. Yesterday could have been such an event. Let's take a look at several markets to see what's going on.Prices gapped lower at the open (a), formed...

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Transports Confirming the Rally So far

From the AP:Shipping giant UPS is optimistic about the economic recovery it is seeing in countries where it does business around the world.The company made the comments as it formally reported Tuesday a nearly 33 percent rise in first-quarter profit to $533 million, or 53 cents a share, compared to a profit of $401 million, or 40 cents a share,...

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Preliminary April auto sales

- by New Deal democratI have been particularly interested in April's car sales number, as it will be the first since January that won't be distorted by events at Toyota. In February annualized sales were 10.3m (as Toyota's sales fell dramatically). March's 11.8m annualized sales were fueled by the resulting Toyota incentives. Additionally, Spencer at Angry Bear contends that, as gas prices go up as a share of disposable income, car sales go down. So, have rising gas prices taken a bite out of auto sales?Yesterday Edmunds.com reported (finally!)...

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Yesterday's Market

I'm going to change some things around on the site. First, you'll notice that the "big story" section of the blog is gone. The reason is simple: I am becoming more and more involved in "inter-market analysis," meaning the inter-relationship of all the financial markets. For example, as good economic news has been coming out we've seen equities rally....

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Return To The Drachma

The Greek tragedy continues apace.Angela Merkel, the German Chancellor, had to make an emergency statement yesterday "promising" aid to Greece in response to the continued pressure brought to bear by the markets.However, her politician's promise (which contained a pre condition) failed to mollify the markets who suspect that Greece will not be able to restructure its economy nor meet its debt obligations (even if Germany does finally agree to the bailout plan).The interest rate on two year Greek debt rose to almost 14% yesterday, in response to...

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Railfax's Recession Watch

From Railfax:Crushed Stone and Lumber are the two leading indicators of new construction (commercial and residential). Tracking these two economically sensitive commodities gives an up to the minute view of future construction. Recession or full-blown depression? These commodities could be key leading indicators. As with all Railshare data, these...

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More Signs of Expansion Emerge

From the NY Times: At malls from New Jersey to California, shoppers are snapping up electronics and furniture, as fears of joblessness yield to exuberance over rising stock prices. Tractor trailers and railroad cars haul swelling quantities of goods through transportation corridors, generating paychecks for truckers and repair crews. On the factory floor, production is expanding, a point underscored by government data released Friday showing a hefty increase in March for orders of long-lasting manufactured items. In apartment towers and...

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Conference Board, ECRI: growth to continue

- by New Deal democratOne the phrases both Bonddad and I have been using (I'm going to take credit for being first) is that in this global recovery, the American consumer is no longer the locomotive, but the caboose. In particular, China and Asia aren't growing because the US consumer has started to lighten up a little. On the contrary, all of...

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