Global Economic Intersection
Advertisement
  • Home
  • Economics
  • Finance
  • Politics
  • Investments
    • Invest in Amazon $250
  • Cryptocurrency
    • Best Bitcoin Accounts
    • Bitcoin Robot
      • Quantum AI
      • Bitcoin Era
      • Bitcoin Aussie System
      • Bitcoin Profit
      • Bitcoin Code
      • eKrona Cryptocurrency
      • Bitcoin Up
      • Bitcoin Prime
      • Yuan Pay Group
      • Immediate Profit
      • BitQH
      • Bitcoin Loophole
      • Crypto Boom
      • Bitcoin Treasure
      • Bitcoin Lucro
      • Bitcoin System
      • Oil Profit
      • The News Spy
      • Bitcoin Buyer
      • Bitcoin Inform
      • Immediate Edge
      • Bitcoin Evolution
      • Cryptohopper
      • Ethereum Trader
      • BitQL
      • Quantum Code
      • Bitcoin Revolution
      • British Trade Platform
      • British Bitcoin Profit
    • Bitcoin Reddit
    • Celebrities
      • Dr. Chris Brown Bitcoin
      • Teeka Tiwari Bitcoin
      • Russell Brand Bitcoin
      • Holly Willoughby Bitcoin
No Result
View All Result
  • Home
  • Economics
  • Finance
  • Politics
  • Investments
    • Invest in Amazon $250
  • Cryptocurrency
    • Best Bitcoin Accounts
    • Bitcoin Robot
      • Quantum AI
      • Bitcoin Era
      • Bitcoin Aussie System
      • Bitcoin Profit
      • Bitcoin Code
      • eKrona Cryptocurrency
      • Bitcoin Up
      • Bitcoin Prime
      • Yuan Pay Group
      • Immediate Profit
      • BitQH
      • Bitcoin Loophole
      • Crypto Boom
      • Bitcoin Treasure
      • Bitcoin Lucro
      • Bitcoin System
      • Oil Profit
      • The News Spy
      • Bitcoin Buyer
      • Bitcoin Inform
      • Immediate Edge
      • Bitcoin Evolution
      • Cryptohopper
      • Ethereum Trader
      • BitQL
      • Quantum Code
      • Bitcoin Revolution
      • British Trade Platform
      • British Bitcoin Profit
    • Bitcoin Reddit
    • Celebrities
      • Dr. Chris Brown Bitcoin
      • Teeka Tiwari Bitcoin
      • Russell Brand Bitcoin
      • Holly Willoughby Bitcoin
No Result
View All Result
Global Economic Intersection
No Result
View All Result

Worries for the Week Ahead

admin by admin
April 4, 2011
in Uncategorized
0
0
SHARES
4
VIEWS
Share on FacebookShare on Twitter

worry2   by Jeff Miller

Last Week’s Data

The most important economic data were positive.

The Good

For several weeks I have commented that there is growing recognition that the economic rally now has a self-sustaining character. Occasionally I get a question or comment that reminds me I need to explain this more clearly. Reader J.Q. observes that deficits mount, interest rates are still near-zero, millions of lost jobs have not been regained, and there is no housing bottom.

So let me emphasize: A self-sustaining recovery (some are calling it “escape velocity”) means that we are reaching a point where economic growth will not depend upon stimulus. It does not mean that all is well. Growth is still below trend and many problems remain. I point this out every week. Investors need to think about the direction of changes. There is always a list of worries, well-known and factored into the market. If there were no worries, the Dow would already be at 20K.

This is why I insist on looking at weekly changes in important indicators.

  • The Employment Report continued a pattern of solid improvement, better than I expected. The 216K growth in net payroll jobs is finally better than the level needed to offset growth in the labor force (100-125K). The unemployment rate, to the surprise of many, stayed at 8.8%. At some point there may be an expansion in the labor force sending rates higher despite solid job growth. The Kauffman attendees were covering this report by putting in some very long days.
  • The ISM report was 61.2, roughly in line with expectations, but a small downtick. This report is consistent with real GDP growth of about 6.5%. This makes me skeptical of those who see the second derivative on ISM as a significant indicator. This is a topic for another day.
  • Technical indicators. Charles Kirk notes that many technical methods now have buy signals, and he has moved to a neutral posture. There was also a Dow Theory buy signal last week.
  • Profit Margins are expanding. Dirk Van Dijk of Zacks continues to lead on this story. There is a popular theme that margins will revert to the mean. These predictions are no doubt correct, but they have already been too early and might continue to be wrong for years.
  • Economic growth forecasts improved. The ECRI Weekly Leading Index improved slightly, to 130. The growth index also moved higher to 6.5%. These continue to be good readings, but everyone is watching the indicator closely.
  • Risk as measured by the St. Louis Fed Stress Index, remains very low. This measure tracks a lot of market data in the eighteen inputs. It is not a poll, nor opinions, nor a collection of anecdotes. We should all pay attention to some real data. The value moved to +.024, a bit lower than last week’s +.155. These are completely normal readings for a scale measured in standard deviations from the norm. For more interpretation, the St. Louis Fed published a short paper with a very nice chart that helps to interpret this index. The chart does not reflect the recent continued decline in stress, but it identifies the dates for important recent events. The paper also has a longer version of the chart, illustrating past stress periods. I am not going to run the chart each week, but I strongly recommend that readers look at the paper. In the 2008 decline there was plenty of warning from this index — no sign right now. The scale is in standard deviations, so anything short of 1.0 or so is neutral territory. I am doing more extensive research on this indicator.

NB: The ECRI and SLFSI are actually readings from week-old data.

The Bad

The bad news was mostly political.

  • Energy prices move higher. This is a big threat to the economy.
  • Middle East and Northern Africa issues continue to dominate the news. No one really knows how far unrest might spread. The desire for democracy may be in conflict with economic goals.
  • Popular scare tactics. I was disappointed that George Will, normally an honest source, engaged in a facile misrepresentation of the Fed and US bond offerings. Perhaps he was just deceived by Bill Gross’s misleading commentary.
  • Political posturing on the government shutdown continued. The incentives for individual members differs from the need of the public.

The Ugly

The ugliest news this week was the selfish assertion of First Amendment rights that needlessly cost the lives of innocent people in Afghanistan. I am not going to mention the name of this publicity-seeking zealot, but there has been a universal condemnation of his religious book-burning affront. This guy has already outlived his fifteen minutes of fame.

The Sign of the End for Financial Advice

I was suspiscious of a headline asserting that someone called “Snooki” had been recruited to blog about financial problems. While I am vaguely aware of Snooki, I have never watched her reality show. I was quite confident that the article snippet was wrong in asserting that it was a feature on PBS. No way.

Like all good spoofs, the story has a modicum of face validity. Rutgers had paid her $32,000 for a speaking engagement, about what she gets for an episode of her show. The SAT now has a Snooki essay question. If Lenny Dykstra can be celebrated as an investment expert, why not Snooki?

Fortunately, it is just a clever April Fool’s story. Check out the entire article for a good laugh.

Our Own Forecast

We base our “official” weekly posture on ratings from our TCA-ETF “Felix” model. After a mostly bullish posture for several months, Felix has turned much more cautious. We are continuing our neutral posture in the weekly Ticker Sense Blogger Sentiment Poll, now recorded on Thursday after the market close. This is based on the near-zero ratings for the various index ETFs, which do not at this time suggest selling short. Here is what we see:

  • 55% of our 56 ETF’s have a positive rating, up from 29% last week. This breaks the downward trend.
  • 93% of our 56 sectors are in our “penalty box,” about the same as 95% last week. This is an indication of very high short-term risk.
  • Our universe has a median strength of +21, up dramatically from -23 last week.

The overall picture improved last week. We increased positions in trading accounts to 40%, holding only the two strongest sectors.

[For more on the penalty box see this article. For more on the system ratings, you can write to etf at newarc dot com for our free report package or to be added to the (free) weekly ETF email list. You can also write personally to me with questions or comments, and I’ll do my best to answer.]

The Week Ahead

It is a light week for data.

The unpredictable events in the Middle East will continue to affect oil prices. The current levels are already having an effect on confidence and spending. This may be the biggest current economic threat. There is no sound method for predicting the outcome. I do hold energy stocks as a hedge and because of attractive values.

I have a standing prediction that the government shutdown will be avoided, and I am sticking to that position. Leaders of both parties understand that the American people expect government operations to continue and would blame both sides equally. This provides a strong incentive to negotiate, and I expect the bargaining to avoid a shutdown. Were a shutdown to occur, it would be another huge element of uncertainty, an end to necessary payments and services, a drop in confidence, a loss of economic activity, and a major market negative. This might stretch out until Friday.

The Fed minutes will attract some attention. Despite the dissenting statements from some Fed members, I do not expect an imminent reaction to higher food and energy prices. I understand that many disagree with the Fed methods, but that will not change the policy.

Investment Implications

My current market viewpoint is still sharply divided, depending upon the time frame. The near-term is risky, so it pays to be cautious.

 

Jeff Miller Jeff Miller has been a partner in New Arc Investments since 1997, managing investment partnerships and individual accounts.  He has worked for market makers at the Chicago Board Options Exchange, where found anomalies in the standard option pricing models and developed new forecasting techniques.  Jeff is a Public Policy analyst and formerly taught advanced research methods at the University of Wisconsin.  He analyzed many issues related to state tax policy and provided quantitative modeling which helped inform state and local officials in Wisconsin for more than a decade.  Jeff writes at his blog, A Dash of Insight.

Previous Post

China 2015: 20% of World Luxury Goods Market

Next Post

McDonald’s to Hire 50,000 – Most Probably Part-time

Related Posts

Ethereum ICO Whale Address Moves 145K ETH After 3 Years Of Silence
Economics

Ethereum ICO Whale Address Moves 145K ETH After 3 Years Of Silence

by John Wanguba
August 15, 2022
Australian Court Instructs Google To Pay $43M For Misinforming Users
Econ Intersect News

Australian Court Instructs Google To Pay $43M For Misinforming Users

by John Wanguba
August 15, 2022
Dollar Fell Marginally Last Week As Inflation Seems To Peak
Economics

Dollar Fell Marginally Last Week As Inflation Seems To Peak

by John Wanguba
August 15, 2022
Mark Cuban Sued For Supposedly Promoting Crypto Ponzi Scheme
Business

Mark Cuban Sued For Supposedly Promoting Crypto Ponzi Scheme

by John Wanguba
August 15, 2022
Germany Economy Lose $265B In Added Value  Due To Rising Energy Prices And War
Economics

Germany Economy Lose $265B In Added Value  Due To Rising Energy Prices And War

by John Wanguba
August 13, 2022
Next Post

McDonald's to Hire 50,000 - Most Probably Part-time

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Browse by Category

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

Browse by Tags

adoption altcoins banking banks Binance Bitcoin Bitcoin adoption Bitcoin market Bitcoin mining blockchain BTC business China Coinbase crypto crypto adoption cryptocurrency crypto exchange crypto market crypto regulation decentralized finance DeFi Elon Musk ETH Ethereum finance funding inflation investment market analysis markets Metaverse mining NFT NFTs nonfungible tokens nonfungible tokens (NFTs) price analysis regulation Russia social media technology Tesla the US Twitter

Archives

  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • August 2010
  • August 2009

Categories

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized
Global Economic Intersection

After nearly 11 years of 24/7/365 operation, Global Economic Intersection co-founders Steven Hansen and John Lounsbury are retiring. The new owner, a global media company in London, is in the process of completing the set-up of Global Economic Intersection files in their system and publishing platform. The official website ownership transfer took place on 24 August.

Categories

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

Recent Posts

  • Ethereum ICO Whale Address Moves 145K ETH After 3 Years Of Silence
  • Australian Court Instructs Google To Pay $43M For Misinforming Users
  • Dollar Fell Marginally Last Week As Inflation Seems To Peak

© Copyright 2021 EconIntersect - Economic news, analysis and opinion.

No Result
View All Result
  • Home
  • Contact Us
  • Bitcoin Robot
    • Bitcoin Profit
    • Bitcoin Code
    • Quantum AI
    • eKrona Cryptocurrency
    • Bitcoin Up
    • Bitcoin Prime
    • Yuan Pay Group
    • Immediate Profit
    • BitIQ
    • Bitcoin Loophole
    • Crypto Boom
    • Bitcoin Era
    • Bitcoin Treasure
    • Bitcoin Lucro
    • Bitcoin System
    • Oil Profit
    • The News Spy
    • British Bitcoin Profit
    • Bitcoin Trader
  • Bitcoin Reddit

© Copyright 2021 EconIntersect - Economic news, analysis and opinion.

en English
ar Arabicbg Bulgarianda Danishnl Dutchen Englishfi Finnishfr Frenchde Germanel Greekit Italianja Japaneselv Latvianno Norwegianpl Polishpt Portuguesero Romanianes Spanishsv Swedish