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dshort – Advisor Perspectives

S&P 500 Snapshot: A Modest Gain Before the Storm

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January 26th, 2015

The big news today is Winter Storm Juno now beginning to hammer northeast. The S&P 500 spent the day in the second narrowest intraday range of 2015 (Friday being the narrowest) from its -0.53% early morning low to its 0.28% intraday high shortly before the 0.26% final tally.

The yield on the 10-year Note, which closed at 1.83%, up two bps from Friday's close.

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Weekly Gasoline Price Update: Down Another Two Cents

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January 26th, 2015

It's time again for my weekly gasoline update based on data from the Energy Information Administration (EIA). Rounded to the penny, Regular dropped two cents and Premium three. Regular is at its lowest price since April 2009.

According to GasBuddy.com, Hawaii has the highest average price at $3.23. The highest continental average price is in California at $2.45. Missouri has the cheapest Regular at $1.78.

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Real Median Household Income: A Significant December Increase

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January 26th, 2015

Summary: The Sentier Research monthly median household income data series is now available for December. The nominal median household income was up $537 month-over-month and $2,072 year-over-year. That's a 1.0% MoM gain and a 4.0% YoY gain. Adjusted for inflation, the numbers were up $738 MoM and $1725 YoY. The real numbers equate to a 1.4% MoM increase and a 3.3% YoY increase.

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The Four Totally Bad Bear Recoveries: Where Are We Now?

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January 26th, 2015

Note from dshort: At the request of The Advisory Group in San Francisco, here’s updated comparison of four major cyclical bear markets. The numbers are through Friday’s close.

The chart series features an overlay of the Four Bad Bears in U.S. history since the market peak in 1929. They are: 1) the Crash of 1929, 2) the Oil Embargo of 1973, 2) The 2000 Tech bust and 4) the post-2007 Financial Crisis. The series includes nominal, real, total-return and real total-return comparisons.

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World Markets Update: The Surge Accelerates

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January 24th, 2015

Seven of eight indexes on my world market watch list posted weekly gains, with the three European indexes topping the list, thanks to the ECB's QE. France's CAC 40 was up 5.96%, Germany's DAX rose 4.74% and the UK's FTSE 100 gained 4.31%. But the list of big winners extended beyond Europe. The three Asia-Pacific Indexes posted gains ranging from 3.10% to 4.11%. The S&P 500 was the poorest performer of the weekly winners, but its 1.60% gain snapped a three-week losing streak. China's Shanghai Composite posted the only weekly loss, down a modest -0.73%.

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Conference Board Leading Economic Index: About Those Benchmark Revisions

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January 23rd, 2015

Today's release of the December Conference Board's Leading Economic Index included benchmark revisions in addition to the routine monthly revisions. Also the base year for the index was changed from 2004=100 to 2010=100. Today's press release included the following comment:

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Understanding the CFNAI Components

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January 23rd, 2015

The Chicago Fed’s National Activity Index, which I reported on earlier today, is based on 85 economic indicators drawn from four broad categories of data:

  • Production & Income
  • Employment, Unemployment & Hours
  • Personal Consumption & Housing
  • Sales, Orders, & Inventories

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Conference Board Leading Economic Index: Fourth Consecutive Monthly Increase

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January 23rd, 2015

The Latest Conference Board Leading Economic Index (LEI) for December is now available. The index rose 0.5 percent but November was revised to downward from 0.6 percent to 0.4 percent. The latest number came in above the 0.4 percent forecast by Investing.com. The latest release incorporates annual benchmark revisions and the base year was changed to 2010=100 (previously 2004=100).

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ECRI Recession Watch: Weekly Update

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January 23rd, 2015

Today's new release of the publicly available data from the Economic Cycle Research Institute (ECRI) puts its Weekly Leading Index (WLI) at 135.5, down fractionally from 130.9 the previous week. The WLI annualized growth indicator (WLIg) is at -5.0, unchanged to one decimal place from the previous week. The growth metric is hovering at its lowest level since January 2012.

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Chicago Fed: Economic Growth Moderated in December

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January 23rd, 2015

"Index shows economic growth moderated in December": This is the headline for today's release of the Chicago Fed's National Activity Index, and here are the opening paragraphs from the report:

"Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) fell to –0.05 in December from +0.92 in November. None of the four broad categories of indicators that make up the index increased from November, and two of the four categories made negative contributions to the index in December."

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The Philly Fed ADS Business Conditions Index

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January 22nd, 2015

Note from dshort: I’ve updated my periodic look at the Philly Fed ADS Index through today's release, which includes the latest Initial Jobless Claims (for the week ending January 17th).

The Philly Fed’s Aruoba-Diebold-Scotti Business Conditions Index (hereafter the ADS index) is a fascinating but relatively little known real-time indicator of business conditions for the U.S. economy, not just the Third Federal Reserve District.

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WSJ Economists' Forecasts for 10-Year Yields and the Fed Funds Rate

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January 22nd, 2015

The big economic news today is the ECB's announcement of a quantitative-easing program of 60 billion euros per month starting in March and lasting until September 2016. That's a total commitment of over 1 Trillion euros. This announcement comes nearly three months after the US Fed ended its last round of QE.

With the focus now on the European Central Bank, let's take a quick look at a couple of items in the January Wall Street Journal survey of economists, starting with where the Federal Reserve is headed with the Fed Funds Rate, which is currently at 0.12 percent.

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New Jobless Claims at 307K, A Bit Higher Than Expected

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January 22nd, 2015

Today's seasonally adjusted 307K came in above the Investing.com forecast of 300K. The four-week moving average at 306,500 is now 27,500 above its 14-year interim low set eleven weeks ago.

Here is a close look at the data over the past few years (with a callout for the past year), which gives a clearer sense of the overall trend in relation to the last recession and the volatility in recent months.

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Vehicle Miles Traveled: A Structural Change in Our Behavior

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January 21st, 2015

The Department of Transportation's Federal Highway Commission has released the latest report on Traffic Volume Trends, data through November.

"Travel on all roads and streets changed by 1.1% (2.5 billion vehicle miles) for November 2014 as compared with November 2013." The less volatile 12-month moving average is up 0.08% month-over-month and 1.35% year-over-year. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) is essentially unchanged, up 0.01% month-over-month and up only 0.42% year-over-year.

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Two Measures of Inflation and Fed Policy

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January 20th, 2015

Note from dshort: I've updated the accompanying charts with the latest Consumer Price Index data from the Bureau of Labor Statistics. The annualized rate of change is calculated to two decimal places for more precision in the side-by-side comparison with the PCE Price Index.

The BLS's Consumer Price Index for December shows core inflation at 1.61%. The Core PCE price index at the end of the November (the most recent data), is lower at 1.41%. The Fed is on record as preferring the less familiar Core PCE as its inflation gauge.

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Industrial Production and Real Retail Sales

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January 20th, 2015

The overall picture of the US economy had been one of slow recovery from the Great Recession with a clearly documented contraction during the winter, as reflected in Q1 GDP. Data for Q2 and Q3 supported the consensus view that severe winter weather was responsible for the Q1 contraction -- that it was not the beginnings of a business cycle decline. However, the Big Four average in recent months suggests that, despite the rebound in GDP in Q2 and Q3, the economy remains near stall speed.

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Treasury Snapshot: Where Are Yields Headed?

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January 19th, 2015

With Quantitative Easing behind us and the first FOMC meeting of 2015 still a week away, let's take a quick look at US Treasuries. The yields on the 10-, 20- and 30 year Treasuries have trended downward rather dramatically since the end of 2013. They hit their recent lows on Thursday of last week (January 15th). The 30-year yield hit an all-time closing low of 2.40% and the 20-year yield was 2.12%, one bp off its historic low. The yield on the 10-year Note closed at 1.77%, substantially off its 3.04% close at the end of 2013 but above its 1.43% historic low in July of 2012.

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Population-Adjusted Real Retail Sales: Another Perspective on the Economy

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January 16th, 2015

In real, population-adjusted terms, Retail Sales are at the level we first reached in December 2004.

Earlier this week, the Advance Retail Sales Report showed that sales in December declined 0.9% month-over-month, as I reported in my real-time update.

With the subsequent release of the Consumer Price Index, we can now dig a bit deeper into the "real" data, adjusted for inflation and against the backdrop of our growing population.

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A Long-Term Look at Inflation

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January 16th, 2015

The Consumer Price Index for Urban Consumers (CPI-U) released this morning puts the December year-over-year inflation rate at 0.76%, the lowest since the eight-month deflationary period that ended in October 2009. It is substantially below the 3.86% average since the end of the Second World War and 67 percent below its 10-year moving average.

Let’s take a step back and look at the history of inflation over the past 140 plus years.

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Inflation: A Six-Month X-Ray View

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January 16th, 2015

Here is a table showing the annualized change in Headline and Core CPI for each of the past six months. I’ve also included each of the eight components of Headline CPI and a separate entry for Energy, which is a collection of sub-indexes in Housing and Transportation.

We can make some inferences about how inflation is impacting our personal expenses depending on our relative exposure to the individual components.

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What Inflation Means to You: Inside the Consumer Price Index

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January 16th, 2015

Let’s do some analysis of the Consumer Price Index, the best known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart below illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U, which I’ll refer to hereafter as the CPI.

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Michigan Consumer Sentiment January Preliminary: An Eleven-Year High

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January 16th, 2015

The Preliminary University of Michigan Consumer Sentiment for January came in at 98.1, a strong surge from last month's final reading of 93.6. This is the highest level of sentiment in eleven years. Today's sentiment level came in substantially above the Investing.com forecast of 94.1.

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December Headline Consumer Price Index At Its Lowest Since October 2009

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January 16th, 2015

The Bureau of Labor Statistics released the November CPI data this morning. Year-over-year unadjusted Headline CPI came in at 0.76% (rounded to 0.8%), down from 1.32% (rounded to 1.3%) the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 1.61% (rounded to 1.6%), down from the previous month's 1.70%. The non-seasonally adjusted month-over-month Headline number was down -0.57% (rounded to -0.6%), and the Core number was down -0.20%.

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Philly Fed Business Outlook: Activity Slows Significantly But Remains Positive

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January 15th, 2015

The latest gauge of General Activity came in at 6.3, a substantial decline from last month's 24.3 and the lowest reading since the -2.0 contraction in February of last year. The 3-month moving average came in at 23.6, down from 27.8 last month. Since this is a diffusion index, negative readings indicate contraction, positive ones indicate expansion.

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Empire State Manufacturing: A Welcome Bounce from Last Month's Contraction

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January 15th, 2015

This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions bounced back after last month's mild contraction. The headline number rose 11 points to 10.0.

The Investing.com forecast was for a reading of 5.00.

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Producer Price Index: Inflation Remains Tame

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January 15th, 2015

Today's release of the December Producer Price Index (PPI) for Final Demand came in at -0.3% month-over-month seasonally adjusted. That's down from the previous month's -0.2% decline. Core Final Demand (less food and energy) was up 0.3% from last month.

The year-over-year change in Final Demand is up 1.1% (1.09% to two decimals), the lowest since May of 2013.

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Census Bureau Revisions to Retail Sales

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January 14th, 2015

Earlier today I posted my monthly update on Retail Sales. Those of us who routinely track this series know that the Advance Estimate will be followed by a second estimate next month and a third estimate the month after. How big are those revisions? Are they big enough to warrant skepticism about the Advance Estimate?

See for yourself. Here is a visualization of the cumulative change from the first to third estimates from January 2007 through October 2014, the most recent month for which we have all three data points.

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Light Vehicle Sales Per Capita: A Better Look at the Long-Term Trend

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January 14th, 2015

For the past few years I've been following a couple of transportation metrics: Vehicle Miles Traveled and Gasoline Volume Sales. For both series I focus on the population adjusted data. Let's now do something similar with the Light Vehicle Sales report from the Bureau of Economic Analysis. This data series stretches back to January 1976. Since that first data point, the Civilian Noninstitutional Population Age 16 and Over (i.e., driving age not in the military or an inmate) has risen 60.7%.

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December Retail Sales Took a Dramatic Plunge

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January 14th, 2015

The Advance Retail Sales Report released this morning shows that sales in December came in at -0.9% (-0.94% at two decimals) month-over-month, down from a downwardly revised 0.4% in November. Core Retail Sales (ex Autos) came in at -0.1%, down from 0.12% in November, also a downward revision.

Today's numbers came in substantially below the Investing.com forecast of -0.1% for Headline Sales and 0.1% for Core Sales.

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Continuing Proof of Structural Changes in the U.S. Workforce

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January 13th, 2015

At last year's Jackson Hole Symposium, Fed Chair Janet Yellen delivered an extended analysis of "Labor Market Dynamics and Monetary Policy". Her speech essentially reviewed the ongoing debate over the mix of cyclical versus structural factors in employment since the Great Recession.

I've updated a series of charts illustrating some structural changes in the workforce that are far more significant than the cyclical impact of the Great Recession.

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Demographic Trends in the 50-and-Older Work Force

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January 13th, 2015

Note from dshort: I've updated this commentary with dat from the January Employment Report for December.

This is not the scenario that would have been envisioned a generation ago for the "Golden Years" of retirement. Consider: Today nearly one in three of the 65-69 cohort and almost one in five of the 70-74 cohort are in the labor force.

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Structural Trends in Employment by Age Group

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January 13th, 2015

Note from dshort: I’ve updated this commentary with the latest numbers from last Friday’s Employment Report.

The Labor Force Participation Rate (LFPR) is a simple computation: You take the Civilian Labor Force (people age 16 and over employed or seeking employment) and divide it by the Civilian Noninstitutional Population (those 16 and over not in the military and or committed to an institution). The result is the participation rate expressed as a percent.

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Small Business Optimism: Back to Pre-Recession Levels

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January 13th, 2015

The latest issue of the NFIB Small Business Economic Trends is out today. The January update for December came in at 100.4, up/down 2.3 points from the previous month. The index is now at the 63.2 percentile in this series and at a new post-recession high, its highest level since October 2006.

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Inside the World of Multiple Jobholders: Two Decades of Trends

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January 12th, 2015

What are the long-term trends for multiple jobholders in the US? The Bureau of Labor Statistics has two decades of historical data to enlighten us on that topic, courtesy of Table A-16 in the monthly Current Population Survey.

At present, multiple jobholders account for around five percent of civilian employment. The survey captures data for four subcategories of the multi-job workforce, the current relative sizes of which I've illustrated in a pie chart.

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Ratio of Part-Time Employed Remains Higher Than the Pre-Recession Level

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January 12th, 2015

Let's take a close look at Friday's employment report numbers on Full and Part-Time Employment. Buried near the bottom of Table A-9 of the government's Employment Situation Summary are the numbers for Full- and Part-Time Workers, with 35-or-more hours as the arbitrary divide between the two categories. The source is the monthly Current Population Survey (CPS) of households. The focus is on total hours worked regardless of whether the hours are from a single or multiple jobs.

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Five Decades of Middle Class Wages: Update

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January 9th, 2015

Note from dshort: I've updated this series to include today's release of the December employment data. While my focus here is on long-term trends, I want to call attention to the six-cent decline from November to December in the average hourly earnings for this cohort. That's the largest month-over-month decline in the history of the series, which dates from 1964. The second largest was three cents in August 1983.

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Earnings of Private Employees: A Jarring December Drop in Hourly Earnings

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January 9th, 2015

First, here is a chart of the Average Hourly Earnings. I've included a linear regression through the data to highlight the trend. Hourly earnings increased at a faster pace through 2008, but the pace slowed from early 2009 onward. The most recent data point is a bit disturbing, a 5 cent month-over-month decline. This is the first decline since the penny drop 17 months ago. It's the largest monthly decline in the 8-plus year history of this series.

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The Civilian Labor Force, Unemployment Claims and the Business Cycle

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January 9th, 2015

Note from dshort: I’ve updated this commentary to include the latest labor force data in today’s employment report.

A long-term chart of the seasonally-adjusted 4-week moving average of Initial Claims gives a rather distorted view of the economy. Why? Because it doesn’t take into account the 104% growth in the Civilian Labor Force since January 1967. For a better understanding of the weekly Initial Claims data, let’s put the numbers in a ratio with the Civilian Labor Force.

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Strong Jobs Growth in December with Upward Revisions to October and November

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January 9th, 2015

Today's report of 252K new nonfarm jobs in December was above the Investing.com forecast of 240K, and there were 50K in upward revisions to the two previous months (+32K in November and +18K in October). The unemployment rate dropped from 5.8% to 5.6%.

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Market Cap to GDP: The Buffett Valuation Indicator

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January 7th, 2015

Note from dshort: Following up on my routine valuation updates, here's a revised version of the "Buffett Indicator".

I've now updated the GDP denominator with the BEA's Q3 Third Estimate. The numerator is from the Fed's Q3 Z.1 Financial Accounts released on December 11th. The indicator remains over 2 standard deviations above its mean but off its interim high -- now at 123.1%, down from 127.3% at the end of Q2 and a bit lower than our last look, thanks to the upward revision of GDP denominator in the BEA's Third Estimate.

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Anticipating the Employment Report for December

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January 7th, 2015

The economic mover and shaker this week is the Friday employment report from the Bureau of Labor Statistics. This monthly report contains a wealth of data for economists, probably the most publicized in the near term being the month-over-month change in Total Nonfarm Employment (the PAYEMS series in the FRED repository).

Today we have a December estimate of 241K new nonfarm private employment jobs from ADP, which came in above the Investing.com forecast of 226K for the ADP number. Moreover, ADP made a 19K upward revision of its November estimate from 208K to 227K.

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Market Valuation Overview: November Overvaluation Surpassed Only by the Tech Bubble

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January 6th, 2015

Here is a summary of the four market valuation indicators I updated at the beginning of the month.

  • The Crestmont Research P/E Ratio
  • The cyclical P/E ratio using the trailing 10-year earnings as the divisor
  • The Q Ratio, which is the total price of the market divided by its replacement cost
  • The relationship of the S&P Composite price to a regression trendline

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ISM Non-Manufacturing: Slower Growth in December

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January 6th, 2015

Today the Institute for Supply Management published its latest Non-Manufacturing Report. The headline NMI Composite Index is at 56.2 percent, down from last month's 59.3 percent. Today's number came in below the Investing.com forecast of 58.0.

Here is the report summary:

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Market Valuation, Inflation and Treasury Yields: Clues from the Past

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January 6th, 2015

My monthly market valuation updates have long had the same conclusion: US stock indexes are significantly overvalued, which suggests cautious expectations on investment returns. In a "normal" market environment -- one with normal business cycles, Federal Reserve policy, interest rates and inflation -- current valuation levels would be a serious concern.

But these are different times.

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The Q Ratio and Market Valuation: New Update

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January 5th, 2015

Based on the latest Z.1 data, the Q Ratio at the end of the third quarter of 2014 was 1.09. As of the December close, the broad market was up 5.3% (based on VTI's monthly closes). My latest estimate would put the ratio about 68% above its arithmetic mean and 80% above its geometric mean. Of course periods of over- and under-valuation can last for many years at a time, so the Q Ratio is not a useful indicator for short-term investment timelines. This metric is more appropriate for formulating expectations for long-term market performance.

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Is the Stock Market Cheap?

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January 5th, 2015

Here is a new update of a popular market valuation method using the most recent Standard & Poor's "as reported" earnings and earnings estimates and the index monthly average of daily closes for the past month, which is 2,054.27. The ratios in parentheses use the monthly close of 2,058.90. For the earnings, see the table below created from Standard & Poor's latest earnings spreadsheet.

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Crestmont Market Valuation Update

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January 5th, 2015

Quick take: Based on the December S&P 500 average of daily closes, the Crestmont P/E is now 95% above its arithmetic mean and at the 98th percentile of this fourteen-decade monthly metric.

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Regression to Trend: A Perspective on Long-Term Market Performance

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January 5th, 2015

Quick take: At the end of December the inflation-adjusted S&P 500 index price was 96% above its long-term trend, up from 94% above trend the previous month.

About the only certainty in the stock market is that, over the long haul, over performance turns into under performance and vice versa. Is there a pattern to this movement? Let’s apply some simple regression analysis to the question.

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The S&P 500, Dow and Nasdaq Since Their 2000 Highs

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January 2nd, 2015

Here is a update in response to a standing request from a couple of sources that I also share with regular visitors to my Advisor Perspectives pages.

The request is for real (inflation-adjusted) charts of the S&P 500, Dow 30, and Nasdaq Composite. In response, I maintain two overlays — one with the nominal price, excluding dividends, and the other with the price adjusted for inflation based on the Consumer Price Index for Urban Consumers (which is usually just refer to as the CPI). The charts below have been updated through the end of December.

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ISM Manufacturing Index: Growth at a Slower Pace

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January 2nd, 2015

Today the Institute for Supply Management published its monthly Manufacturing Report for December. The latest headline PMI was 55.5, a decline from the previous month's 58.7 percent and below the Investing.com forecast of 57.6. This was the lowest PMI in six months.

Here is the key analysis from the report:

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Secular Bull and Bear Markets

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January 2nd, 2015

Was the March 2009 low the end of a secular bear market and the beginning of a secular bull? At this point, over five-and-a-half years later, the S&P 500 has set an inflation-adjusted record high.

Let's examine the past to broaden our understanding of the range of historical trends in market performance. An obvious feature of this inflation-adjusted series is the pattern of long-term alternations between up-and down-trends.

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Moving Averages: Month-End Update

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January 1st, 2015

Valid until the market close on January 30, 2015

The S&P 500 closed December with a monthly loss of 0.42%. All three S&P 500 MAs and three of the five the Ivy Portfolio ETF MAs are signaling "Invested".

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Moving Averages: Month-End Preview

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December 31st, 2014

Here is an advance preview of the monthly moving averages I track after the close of the last business day of the month. All three S&P 500 strategies are now signaling "invested" -- unchanged from last month. Two of the five of the Ivy Portfolio ETFs, the Vanguard FTSE All-World ex-US ETF (VEU) and the PowerShares DB Commodity Index Tracking (DBC, are signal "cash" -- also unchanged from last month.

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Household Incomes Across Time: The Divergence at the Top

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December 30th, 2014

Among the most interesting of the long-term economic indicators I track is the Census Bureau's annual data on the mean (average) household income received by each fifth (quintile) and top 5 percent. See my latest update here. A conspicuous pattern in the series is the widening of the spread in income growth that started during the 1980s.

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Consumer Confidence "Rebounded Modestly" in December

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December 30th, 2014

The Latest Conference Board Consumer Confidence Index was released this morning based on data collected through December 16. The headline number of 92.6 was an increase from the revised November final reading of 91.0, an upward revision from 88.7. Today's number was slightly below the Investing.com forecast of 93.2.

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The Latest on Real Disposable Income Per Capita

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December 26th, 2014

With the release of the pre-Christmas report on November Personal Incomes and Outlays we can now take a closer look at "Real" Disposable Personal Income Per Capita.

The November nominal 0.27% month-over-month increase in disposable income rises to 0.44% when we adjust for inflation, thanks to a -0.17 month-over-month decline in the PCE price index. The year-over-year metrics are 3.40% nominal and 2.21% real.

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PCE Price Index: Headline and Core Remain Well Below Target

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December 23rd, 2014

The latest Headline PCE price index year-over-year (YoY) rate is 1.17%, down from 1.42% the previous month. The Core PCE index of 1.41% down from the previous month's 1.53% YoY.

The adjacent thumbnail gives us a close-up of the trend in YoY Core PCE since January 2012. I've highlighted the 12 months when Core PCE hovered in a narrow range around its interim low.

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Q3 GDP Third Estimate at 5.0% Exceeds Expectations

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December 23rd, 2014

The Third Estimate for Q3 GDP, to one decimal, came in at 5.0 percent, an increase from the Second Estimate of 3.9 percent. Today's number beat mainstream economists' estimates, which were for a fractional decrease. For example, Investing.com had a forecast of 4.3 percent.

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Gasoline Volume Sales, Demographics and our Changing Culture

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December 22nd, 2014

The Department of Energy's Energy Information Administration (EIA) data on volume sales is over two months old when it released. The latest numbers, through mid-Octber, are now available. However, despite the lag, this report offers an interesting perspective on fascinating aspects of the US economy. Gasoline prices and increases in fuel efficiency are important factors, but there are also some significant demographic and cultural dynamics in this data series.

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NYSE Margin Debt Drifts Higher in November

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December 22nd, 2014

Unfortunately, the NYSE margin debt data is about a month old when it is published. Following its February peak, real margin declined sharply for two months, -3.9% in March -3.2% in April and was flat in May. It then jumped 5.7% in June, its largest gain in 17 months. The number has since hovered in a narrow range over the last five months. Real margin debt rose 1.0% in November and is now 2.7% off its February peak.

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The Fed Balance Sheet: What Is Uncle Sam’s Largest Asset?

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December 12th, 2014

Note from dshort: I've updated the quiz based on yesterday's Q3 Financial Accounts of the United States (previously referred to as the Flow of Funds Accounts). Hint: The correct answer is the same as it was for the last quiz.


Pop Quiz! Without recourse to your text, your notes or a Google search, what line item is the largest asset on Uncle Sam’s balance sheet?

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Household Net Worth: The ’’Real’’ Story

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December 11th, 2014

Let's take a long-term view of household net worth from the latest Z.1 release. A quick glance at the complete data series shows a distinct bubble in net worth that peaked in Q4 2007 with a trough in Q1 2009, the same quarter the stock market bottomed. The latest Fed balance sheet shows a total net worth that is 48.0% above the 2009 trough and 19.9% above the 2007 peak, just off the all-time high at the end of Q2. The nominal Q3 net worth is down 0.2% from the previous quarter but up 6.7% year over year.

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Happiness Revisited: A Household Income of $75K?

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September 25th, 2014

Note from dshort: I've updated this commentary in the wake of the Census Bureau's release last week of the 2013 annual household income data from the Current Population Survey.

One of my favorite discussions on APViewpoint, which addressed "The Sad State of Happiness" included an indirect reference to a popular 2010 academic study by psychologist Daniel Kahneman and economist Angus Deaton. Their topic was the correlation between annual household income and day-to-day contentment.

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Median Household Income by State: A Sobering Look at the Data

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September 19th, 2014

The Census Bureau's annual household income reports for 2013 were published this week. I've now compiled a few tables for the 50 states and DC based on the Current Population Survey, a joint undertaking of the Census Bureau and Bureau of Labor Statistics, which includes annual data from 1984 to 2013. The details are fascinating, if somewhat sobering.

First, some context. The median US income in 2013 was $51,939, up from $22,415 in 1984 -- a 131.7% rise over the 29-year timeframe.

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Median Household Incomes by Age Bracket: 1967-2013

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September 17th, 2014

Earlier today I updated my commentary on household income distribution to include the Census Bureau's release of the 2013 annual data. My focus was on arithmetic mean (average) household incomes by quintile (and the top 5%) over the 46-year history of this data series. The analysis offered some fascinating insights into U.S. household incomes.

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U.S. Household Incomes: A 46-Year Perspective

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September 17th, 2014

The Census Bureau has now released its annual report household income data for 2013. It is posted on the Census Bureau website. What I'm featuring in this update is an analysis of the quintile breakdown of data from 1967 through 2013 along with the statistics for the top 5%.

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Median Household Income Growth: Deflating the American Dream

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September 16th, 2014

What is the single best indicator of the American Dream? Many would point to household income growth. The Census Bureau has now published some selected annual household income data in a new report: Income and Poverty in the United States: 2013. Last year the median (middle) household income was $51,939 -- a 1.8% year-over-year increase that shrinks to 0.3% when adjusted for inflation. Let's put the new release into a larger historical context.

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