Quick take: Based on the December S&P 500 average of daily closes, the Crestmont P/E is 99% above its arithmetic mean and at the 98th percentile of this fourteen-plus-decade monthly metric. The December valuation is the highest since May of 2001 during the Tech Bubble.
Today the Institute for Supply Management published its monthly Manufacturing Report for December. The latest headline Purchasing Managers Index (PMI) was 54.7 percent, an increase of 1.5 percent from 53.2 previous month. Today's headline number was above the Investing.com forecast of 53.6 percent.
Valid until the market close on January 31, 2016
The S&P 500 closed December with a monthly gain of 1.82% after a gain of 3.42% in November. All three S&P 500 MAs are signaling "invested" and three of the five Ivy Portfolio ETF MAs — Vanguard Total Stock Market ETF (VTI), PowerShares DB (DBC), and Vanguard FTSE All-World ex-US ETF (VEU) — are signaling "invested". In the table, monthly closes that are within 2% of a signal are highlighted in yellow.
The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, fell in December to a value of 54.6 from last month's 57.6. Values above 50.0 indicate expanding manufacturing activity.
Here is an advance preview of the monthly moving averages we track after the close of the last business day of the month. At this point, before the close on the last day of the month, all three S&P 500 strategies are signaling "invested" — unchanged from last month's triple "invested" signal. Three of the five Ivy Portfolio ETFs — Vanguard Total Stock Market ETF (VTI), , PowerShares DB (DBC), and Vanguard FTSE All-World ex-US ETF (VEU) — are signaling "invested", unchanged from the signal last month.
Today the National Association of Realtors released the November data for their Pending Home Sales Index. According to the National Association of Realtors®, "Pending home sales dipped in November to their lowest level in nearly a year as the brisk upswing in mortgage rates and not enough inventory dispirited some would-be buyers, according to the National Association of Realtors. Only the Northeast saw monthly and annual pending sales gains last month."
Today the Richmond Fed Manufacturing Composite Index increased 4 points to 8 from last month's 4. Investing.com had forecast 5. Because of the highly volatile nature of this index, we include a 3-month moving average to facilitate the identification of trends, now at 2.7, indicates expansion.
The Federal Reserve System consists of twelve Federal Reserve Banks, twenty five branches, and the Board of Governors in Washington, D.C. Each bank serves a larger regional district. Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia. The average of the five for December is 6.18, up from last month's 2.19 and in positive territory for the second consecutive month.
This morning the Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for December. The latest general business activity index increased 5 points, coming in at 15.5, up from 10.2 in October.
With today's release of the October S&P/Case-Shiller Home Price we learned that seasonally adjusted home prices for the benchmark 20-city index were up 0.6% month over month. The seasonally adjusted year-over-year change has hovered between 4.4% and 5.4% for the last twenty-three months. Today's S&P/Case-Shiller National Home Price Index (not seasonally adjusted) reached another new high.