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Posts Tagged ‘Composite Leading Indicators’

2013/02/11: Calendar, OECD still mixed with US the key

February 11, 2013 Leave a comment

© 2013 ROHR International, Inc. All International rights reserved.

The Weekly Report & Event Calendar is available through the link in the right hand column. This week’s Summary Perspective will be added sometime soon. Yet, in addition to the calendar are two key areas of interest we want to cover today: What a significantly robust week it is on all fronts, and (in spite of what some may say about the possible self-sustaining potential of the Chinese and other Asian economies) the degree to which the US remains the key to the rest of the world’s further growth prospects.

That we have quite a bit of important midmonth economic data is a given. After a light data day today, those always include a range of global GDP figures (somewhat after the US release), US and UK Retail Sales, various Chinese data even though it is closed all week for the Lunar New Year. And first but not least of the truly global indications was the OECD (Organization of Economic Cooperation and Development) Composite Leading Indicators (CLI.)

Still mixed... US holds the key

Still mixed… US holds key (click for full report.)

       Those still showed a very mixed picture that we interpreted to mean there is still quite a burden on the US to continue to lead any further global economic growth. More on that later. But for now, there are also extensive finance minister and central bank meetings this week beginning with Europe today and tomorrow and evolving into the G20 in Moscow Thursday and Friday.

And those are looking to be pretty contentious this time around.

 

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2013/01/14: Calendar, OECD CLI, another great resource, Europe

January 14, 2013 Leave a comment

© 2013 ROHR International, Inc. All International rights reserved.

The Weekly Report & Event Calendar is available through the link in the right hand column. This week’s Summary Perspective will be added sometime soon. Yet, in addition to the calendar are two other resources which we feel you might find useful.

The first is this month’s Organization for Economic Cooperation and Development (OECD) Composite Leading Indicators (CLI), which they insist shows economic growth stabilizing in most economies. We can’t really disagree that was the case looking back to the upbeat factors we have already cited for late last year.

As noted previous, on the fundamental side there are reasons why the January statistical releases are going to be fairly upbeat in the US, and that will drive positive sentiment elsewhere. In fact, we still see the US influence as critical, with the news in Europe and some other areas not being nearly as strong. The US remains the key, and the headwinds there are going to intensify. We are going to have a full Taxulationismupdate very soon on that.

1Taxulationism © 2010 Alan Rohrbach & Jack Bouroudjian. All rights reserved unless explicitly waived

Def.: Combined impact of taxation, regulation and protectionism to an oppressive degree as official policy

But there is also another update from a source and a region that is highly influential. That is the latest edition of the Reserve Bank of Australia Chart Pack. That is the very simple name for a very robust set of economic indicators. Given the importance of the Asian and Australian economy, this is a great additional research resource.

While titled The Australian Economy and Financial Markets, it is actually a terrific, very current (updated through December 27th) global economic and finance graphical representation overview. And what it does have on Australia is an incredibly good sector and finance breakdown of many industries and finance functions for that important Asian natural resource economy.

And while the online version is very easy to navigate, it allows for the download of the full (34 page) PDF version as well. After all there are some lunatics (present writer proudly included) who want to be able to compare some fairly diverse factors in hard copy. It can be printed in a four-to-a-page easy review format, such as the example below comparing world share price trends…

Click on the graph to access the RBA Chart Pack home page

Click the graph to access RBA Chart Pack

It is no surprise that research generated by the RBA also includes extensive indications for Asia. And versus the passing view of China typical of so much European and US research, this means India and the Greater Asia economic sphere as well… including emerging markets.

Beyond that this is going to be another very big week, with an interesting twist on the confidence now helping the European markets…

 

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2012/12/11: Cal-Perspective and overall weakness in spite of some good data

December 11, 2012 Leave a comment

© 2012 ROHR International, Inc. All International rights reserved.

The weekly Report & Event Calendar is available through the link in the right hand column. This week’s Summary Perspective is also now available. Yet there is also an interesting anomaly in the fundamental influences. And it is not just the strongish US economic data versus the trepidation over the potential plunge off the Fiscal Cliff… as that dilemma looks closer to being solved timely enough (end of year or top of January) to avoid its worst effects.

There is also the negative outlook for Europe. Today’s German and Euro-zone (essentially the same) ZEW Sentiment (i.e. the forward view) was stronger than expected. Yet, that flies in the face of other indications out of Europe that are still incredibly weak… like the recent Italian and Spanish Industrial Production numbers that came in below already weak estimates. And anyone who thinks Germany is going to return to being a bastion of strength in Europe should take a look at Monday morning’s admittedly mixed Organization for Economic Cooperation and Development (OECD) Composite Leading Indicators (CLI).

The only real growth is in the US and (interestingly enough in light of recent official forecasts) the UK, with growth or even economic basing elsewhere problematic at best. Even more important is the degree to which Germany remains on a distinctly downward path into the early part of next year. The general tone of the OECD regarding the actual condition of CLI on individual countries is also typically charitable. How does France sliding further below 100 and remaining on a clear downward path indicate “weak growth”? And even though it is still marginally above 100, the same goes for Japan; especially in light of it just recently going back into recession.

And it appears that our continued concerns over US Taxulationism1 are finally beginning to bite. It is no longer just our theoretical assessment that these influences from a Nanny State run amok are a problem.

1Taxulationism © 2010 Alan Rohrbach & Jack Bouroudjian. All rights reserved unless explicitly waived

Def.: Combined impact of taxation, regulation and protectionism to an oppressive degree as official policy

There is now real-world confirmation from actual surveys of the impact this is going to have into the early part of next year. And that comes from none other than one of our favorite US employment-related resources

 

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2012/09/28: QE-Infinity ‘Pie in the Face’ metaphor

September 28, 2012 Leave a comment

© 2012 ROHR International, Inc. All International rights reserved.

The massive central bank QE-Infinity influence already seems to be waning just two weeks after ringleader Buzz Lightyear “To Infinity and Beyond” Bernanke inspired the latest asset price surge. While others either preceded (ECB) or quickly followed the Federal Reserve’s leadership in this area, there is little doubt that initiating the steps the FOMC took two weeks ago was easily the most extensive and extended (i.e. “…highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens…”) central bank commitment to massive liquidity expansion. That said, there is still the question of whether this will do much good with a broken ‘monetary policy transmission mechanism’ (i.e. the real root of economic weakness being in misguided fiscal and regulatory regimes.)

And beyond the sheer consideration that it may fail to influence the economy as expected, there are significant risks of not just that failure but of more general central bank authority dilution. That has been reviewed in this blog and our full research both previous and over the past two weeks. It includes the concerns of some very well respected regional Federal Reserve bank presidents and other economic observers, complaints from other countries this is nothing more than a protectionist, beggar-thy-neighbor ‘currency war’ strategy, and the degree to which (at least so far) the impact is as transitory as many of the skeptics had warned.

It seems that the anticipation of the Fed’s QE3 was much more influential than the actual fact. As we have noted recently, now that the central banks are ‘all in’ on this major liquidity expansion effort, the real risk is it may impugn their ability to effectively intervene in a future crisis. And that is where we draw the analogy with the old Pie in the Face comedy routine, which we will discuss below.

But first, review of another key factor is relevant: the degree to which the Fed becoming ‘the market’ in long-dated US bonds and agency debt is pernicious. Among the most consistent critics of the implementation of this policy has been Newedge Senior Director Larry McDonald. As he noted two weeks ago today (i.e. the day after the Fed QE3 announcement), “There’s a new hedge fund… and it’s the Fed.”

For quite a bit more on that and McDonald’s views on Spain, and that dysfunction in the mortgage securitization market and much else, click into the video clip of his appearance on the Fox business News ‘After the Bell’ show that Friday.  It seems that events since then have borne out his assessment.

And if the Fed is indeed nothing more than a new hedge fund in town…

 

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2012/09/13: Fed Head Extends Anti-Dread Meds

September 13, 2012 2 comments

© 2012 ROHR International, Inc. All International rights reserved.

You have to admire the Fed for nothing quite so much as the sheer audacity of putting forth another major round of Quantitative Easing (QE3… or is it even more than that? See below.) Before our critique, let’s allow some Sympathy for the Devil (or whatever it is the fiscal and monetary conservatives consider Mr. Bernanke.) The Fed is in a really bad spot of having that dual mandate, which requires them to make some significant efforts in the realm of full employment.

It was painfully obvious that concerns over the weak US jobs picture was a primary driver for the extreme quantitative easing communication in today’s FOMC statement, which was fully confirmed at the Federal Reserve Chairman’s press conference. With Europe barely feeling its way along toward its own Sovereign Debt Crisis cure, and the rest of the world for the most part in a weaker state than the US, Bernanke & Company felt compelled to eliminate the “tail risk” of any further weakening of the US economy.

Will it help? There are some serious doubts based on a whole range of factors. But at least the logic is now perfectly clear, as Mr. Bernanke was extremely specific about the rather loose transmission mechanism he hopes will carry the day. It can be generally described as the ‘Portfolio Cure Channel’: asset prices moving higher includes the stock market, and that makes people feel better, and maybe they will go out and buy something. We will obviously need to seriously monitor whether those sorts of current Fed tactics actually amount to anything in the real economy.

Just as with our previous posts on QE is the Opiate of the Perma-Bulls, we remain more than a bit skeptical.  But the one thing we know for sure is the Good Doctor has certainly administered a massive dose of meds to help the patient get past the pain of the inept, ineffective regulatory policy in Washington DC. Yet there is much in the current market response, longer-term economic data and even the more conservative quarters at the Fed that leads us to doubt this will end well…

 

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2012/08/18: Quick Post: Weekend Reading on Continued Contentious Inconsistencies

August 18, 2012 Leave a comment

© 2012 ROHR International, Inc. All International rights reserved.

Equities seem like the Energizer Bunny of up trends right now… they just ‘keep going and going’, even if in a choppy and grinding manner some of the time. Yet, as we noted in the wake of Wednesday’s first September S&P 500 future daily Close above the 1,399-1,402 resistance, the burden of proof was on the bears to put the market back down or it was likely headed higher in the near term.

We will be very concise once again on the specific market comments in this post, because yesterday’s TrendView Brief Update  is a pointed discussion of the significant clash of forces between the equities market and other asset classes.  And a lot of the intermarket tendencies were just plain inconsistent with classical tendencies, and that became more so the case into late last week.

As we noted in our QE is the Opiate of the Perma-Bulls part 1a (part 2 to be provided soon) post a week ago Wednesday, it has been a “bad news is good news” equities market of late. And Perma-Bulls seem to feel the worse the better, at least insofar as that increases the chances for additional central bank Quantitative Easing or other forms of market intervention.

In a “rock and a hard place” psychology, that would be the ‘rock’ that underpins the market. And yet the ‘hard place’ that both investors and short-term portfolio managers find themselves in is the now almost pervasive weak economic data outside of the US. Even the stronger than expected UK Employment figures and Retail Sales this week along with US Retail Sales, Industrial Production, NAHB Housing Market Index, Michigan Sentiment, and Leading Indicators did not seem to help equities all that much in the face of weak data elsewhere.

And the other key aspect we keep a close eye on also reconfirmed those troubling global economic tendencies two weeks ago…

 

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2012/08/15: Quick Post: Courtesy Brief Update: Continued Contentious Inconsistencies

August 15, 2012 Leave a comment

© 2012 ROHR International, Inc. All International rights reserved.

Short & Sweet again on the specific market comments in this post, because today’s TrendView Brief Update is a pointed discussion of the significant clash of forces in the equities market. As we noted in last Wednesday’s QE is the Opiate of the Perma-Bulls part 1a (part 2 to be provided soon), it has been a “bad news is good news” equities market of late. And Perma-Bulls seem to feel the worse the better, at least insofar as that increases the chances for additional central bank Quantitative Easing.

That would be the ‘rock’ that underpins the market. And yet the ‘hard place’ that both investors and short-term portfolio managers find themselves in is the now almost pervasive weak economic data. Even the stronger than expected UK Employment figures this morning and past couple of days’ US economic data (Retail Sales, Industrial Production, NAHB Housing Market Index) did not seem to help equities much in the face of weak data elsewhere.

And the other key aspect we keep a close eye on also reconfirmed those troubling global economic tendencies last Thursday…

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2012/08/10: Quick Post: Courtesy Brief Update: “Rock and a Hard Place” Equities

August 10, 2012 Leave a comment

© 2012 ROHR International, Inc. All International rights reserved.

Short & Sweet again on the specific market comments in this post, because today’s TrendView Brief Update is a pointed discussion of the significant clash of forces in the equities market. As we noted in Wednesday’s QE is the Opiate of the Perma-Bulls part 1a (part 2 to be provided soon), it has been a “bad news is good news” equities market of late. And Perma-Bulls seem to feel the worse the better, at least insofar as that increases the chances for additional central bank Quantitative Easing.

That would be the ‘rock’ that underpins the market. And yet the ‘hard place’ that both investors and short-term portfolio managers find themselves in is the now almost pervasive weak economic data. Even the recently Teflon Equities could not withstand the weak Chinese Export data today in the wake of their other weak data yesterday. All of which is only the further reflection of across-the-board weak global economic indications backlashing into China.     

And the other key aspect we keep a close eye on also reconfirmed those tendencies yesterday…

 

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2012/08/08: QE is the Opiate of the Perma-Bulls part 1a

August 8, 2012 Leave a comment

© 2012 ROHR International, Inc. All International rights reserved.

While Part 2 will be forthcoming soon, there are some developments which warrant immediate review due to the market focus highlighting them into tomorrow. For anyone who has not already read it, you might want to review our post from Thursday for some key points that we expand upon below. Also note that our general skepticism over the central banks’ ability to reinvigorate economic health purely with liquidity expansion is not a recommendation to sit short of equities at any particular point. Timing and risk management are still essential, and right now the equities are trading well technically.

That said, we seem headed for the next critical phase either later this week or by the middle of next week. And much of it relates to the same sorts of things reviewed in our discussion last Thursday: problems in Europe and relative health of China, even if the US Fiscal Cliff dilemma seems (incredibly) off the table with Congress out for a five week summer break.  

As noted in previous analyses, Europe is now being ceded a “benefit of the doubt” grace period on the inference that ECB President Draghi will be ready to move forcefully if Spain and Italy get German approval for European Financial Stability Facility (EFSF) support. That is typically a 3-5 day hiatus from bearish sentiment, and may even last a bit longer this time given how close they seem to something more substantial than previous efforts.

However, that only plays into our previous concerns over whether crisis mitigation and/or liquidity expansion amounts to anything that actually restores robust global economic growth. While the bulls use the prospect of various forms of Quantitative Easing (QE, ultimately the ‘Bernanke Put’ and now the ‘Draghi Put’) as an excuse to move money into equities, there is a far more important real world influence late this week.

That comes in the form of…

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2012/08/07: Quick Post: Weekly Calendar and Perspective Now Available

August 7, 2012 Leave a comment

© 2012 ROHR International, Inc. All International rights reserved.

The weekly Report & Event Calendar is available through the link in the right hand column along with this week’s Summary Perspective on Key Influences. Even as we remain a bit skeptical of the extended rally, it must be allowed that the better sentiment from the extended implication of ECB President Draghi’s press conference can push equities higher in the near-term.

That much was apparent by Friday morning, so it is no surprise that the positive equities influences have the upper hand for now. And as we noted on Friday, that means the primary government bond markets and US dollar were going to suffer as their ‘haven’ bid tendencies were reversed in the face of the sustained near-term equities strength.

And with a relatively light reporting calendar early this week, the factors that might discourage equities once again can only appear from Wednesday into Thursday based upon two aspects…

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