Market Cap to GDP: An Updated Look at the Buffett Valuation Indicator
With the Q3 GDP Second Estimate and the November close data, we now have an updated look at the popular "Buffett Indicator" -- the ratio of corporate equities to GDP. The current reading is 181.4%, up from 171.7% the previous quarter.
The Philly Fed ADS Business Conditions Index: November Update
We've updated our periodic look at the Philly Fed ADS Index today's release which includes initial jobless claims through November 21, the Q3 Second Estimate of GDP, September Manufacturing and Trade, and October Personal Income.
CPI and PCE: Two Measures of Inflation and Fed Policy
The BEA's Core Personal Consumption Expenditures Chain-type Price Index for October, released last week, shows that core inflation is below the Federal Reserve's 2% long-term target at 1.41%. The October Core Consumer Price Index release is higher at 1.61%. The Fed is on record as using Core PCE data as its primary inflation gauge.
Regression to Trend: Another Look at Long-Term Market Performance
Quick take: At the end of November the inflation-adjusted S&P 500 index price was 144% above its long-term trend, up from 135% the previous month.
About the only certainty in the stock market is that, over the long haul, over performance turns into underperformance and vice versa. Is there a pattern to this movement? Let's apply some simple regression analysis to the question.
Weekly Gasoline Prices: WTIC Up 5.3%
As of November 30, the price of Regular and Premium were up two and one cents each, respectively, from the previous week. According to GasBuddy.com, Hawaii has the highest average price for Regular at $3.19 and Texas has the cheapest at $1.78. The WTIC end of day spot price closed at 45.34, up 5.3% from the last week.
November ISM Manufacturing Index: Continued Growth
This morning the Institute for Supply Management published its monthly Manufacturing Report for November. The latest headline Purchasing Managers Index (PMI) was 57.5, a decrease of 1.8 from 59.3 the previous month. Today's headline number was below the Investing.com forecast of 58.0 percent.
Markit Manufacturing Continues Improvement in November
The November US Manufacturing Purchasing Managers' Index conducted by Markit came in at 56.7, up 1.8 from the 53.4 final October figure. Markit's Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.
Moving Averages Update: November Up 10.75%
Valid until the market close on December 31, 2020.
The S&P 500 closed November with a monthly gain of 10.75% after a loss of 2.77% in October. At this point, after close on the last day of the month, four of five S&P 500 strategies are signaling "invested" — Vanguard Total Stock Market ETF (VTI), Vanguard FTSE All-World ex-US ETF (VEU), Vanguard REIT Index ETF (VNQ), and Invesco DB Commodity Index Tracking (DBC) — an increase from last month's triple"invested" signal.
World Markets Update: November 30, 2020
Four of eight indexes on our world watch list posted YTD gains through November 30, 2020. The top performer is our own S&P 500 with a gain of 12.1%. Tokyo's Nikkei 225 is in second with a gain of 11.74% and in third is China's Shanghai with a gain of 11.2%. Coming in last is London's FTSE 100 with a loss of 16.92%.
November Dallas Fed Manufacturing Outlook Continues Expansion
This morning the Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for November. The latest general business activity index came in at 12, down 7.8 from 19.8 in October. All figures are seasonally adjusted.
Real Disposable Income Per Capita in October
With the release of this morning's report on October Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita. At two decimal places, the nominal -0.81% month-over-month change in disposable income is unchanged when we adjust for inflation. This is a decrease from last month's 0.70% nominal and 0.53% real increase last month. The year-over-year metrics are 5.72% nominal and 4.48% real.
The Big Four: Real Personal Income in October
Personal Income (excluding Transfer Receipts) in October rose 0.78% and is up 2.2% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, Real Personal Income (excluding Transfer Receipts) MoM was up 0.78%. The real number is up 1.0% year-over-year.
Michigan Consumer Sentiment: November Final Mostly Unchanged
The November Final came in at 76.9, down 4.9 from the October Final. Investing.com had forecast 77.0. Since its beginning in 1978, consumer sentiment is 10.8 percent below the average reading (arithmetic mean) and 9.8 percent below the geometric mean.
PCE Price Index: October Headline & Core
The BEA's Personal Income and Outlays report for October was published this morning by the Bureau of Economic Analysis. The latest Headline PCE price index was unchanged month-over-month (MoM) and is up 1.18% year-over-year (YoY). Core PCE is below the Fed's 2% target rate.
Headline Durable Goods Orders Up 1.3% in October
The latest new orders number at 1.3% month-over-month (MoM) was better than the Investing.com 0.9% estimate. The series is down 0.3% year-over-year (YoY). If we exclude transportation, "core" durable goods was up 1.3% MoM, which was better than the Investing.com consensus of 0.5%. The core measure is up 4.0% YoY.
Richmond Fed Manufacturing Broadly Positive in November
Fifth District manufacturing activity strengthened in November, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite index fell to 15 in November from 29 in October but still indicates expansion.
S&P/Case-Shiller Home Price Index: National Index up 7% YoY NSA
With today's release of the September S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index saw a 1.27% increase month over month which is cut to 1.21% with inflation adjustment. The non-seasonally adjusted national index saw a 7% YoY increase.
FHFA House Price Index: Up 1.7% in September, Record High
The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for September. U.S. house prices were up 1.7 percent on a seasonally adjusted nominal basis from the previous month. Year-over-year the index is up 9.1% on a non-seasonally adjusted nominal basis. After adjusting for inflation and seasonality, the index is up 1.44% in September and up 7.95% year-over-year (seasonally adjusted).
Chicago Fed: "Index suggests economic growth increased in October"
Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) increased to +0.83 in October from +0.32 in September. Three of the four broad categories of indicators used to construct the index made positive contributions in October, and three of the four categories increased from September. The index’s three-month moving average, CFNAI-MA3, fell to +0.75 in October from +1.37 in September.
Kansas City Fed Survey: Manufacturing Still Not at Pre-COVID Levels
The latest index came in at 11, down 2 from last month's 13, which indicates expansion in November. The future outlook remained at 21 this month. Here is a snapshot of the complete Kansas City Fed Manufacturing Survey.
October Existing-Home Sales: 5th Consecutive Month of Growth
This morning's release of the October Existing-Home Sales showed that sales rose to a seasonally adjusted annual rate of 6.85 million units from the previous month's revised 6.57 million. The Investing.com consensus was for 6.45 million. The latest number represents a 4.3% increase from the previous month.
Philly Fed Mfg Index: Activity Down in November, But Still Growing
The latest Manufacturing Index came in at 26.3, down 6 from last month's 32.3. The 3-month moving average came in at 24.5, up from 21.5 last month. Since this is a diffusion index, negative readings indicate contraction, positive ones indicate expansion. The Six-Month Outlook came in at 44.3, down 18.4 from the previous month's 62.7.
A Long Term Look: Residential Building Permits and Housing Starts
Over the long haul the two series offer a compelling study of trends in residential real estate. Here is an overlay of the two series since the 1959 inception of the Starts data and the Permits data, which began being tracked a year later.
New Residential Housing Starts at 1.5M in October
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for October new residential housing starts. The latest reading of 1.530M was above the Investing.com forecast of 1.460M and an increase from the previous month's revised 1.459M.
New Residential Building Permits: Unchanged in October
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for October new residential building permits. The latest reading of 1.545M was unchanged from the September reading and below the Investing.com forecast of 1.560M.
NAHB Housing Market Index: "Sales Growth Lifts Builder Confidence to New Record High"
The National Association of Home Builders (NAHB) Housing Market Index (HMI) is a gauge of builder opinion on the relative level of current and future single-family home sales. It is a diffusion index, which means that a reading above 50 indicates a favorable outlook on home sales; below 50 indicates a negative outlook. The latest reading of 90 is up 5 from last month's 85 and at its highest level in the indicator's history, exceeding its December 1998 record.
The Big Four: Industrial Production Up in October, Most of Feb-Mar Losses Made Up
Today's report on Industrial Production for October shows a 1.08% increase month-over-month, which was slightly above the Investing.com consensus of 1.0%. The year-over-year change is -5.34%, up from last month's YoY decrease.
Retail Sales Up 0.3% in October, Worse Than Forecast
The Census Bureau's Advance Retail Sales Report for October was released this morning. Headline sales came in at 0.3% month-over-month to one decimal and was below the Investing.com forecast of 0.5%. Core sales (ex Autos) came in at 0.2% MoM.
Empire State Mfg Survey: Slight Expansion in November
This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions at 6.3 was a decrease of 4.2 from the previous month's 10.5. The Investing.com forecast was for a reading of 13.5.
America's Driving Habits as of September 2020
"Travel on all roads and streets changed by -8.6% (-23.4 billion vehicle miles) for September 2020 as compared with September 2019. Travel for the month is estimated to be 248.3 billion vehicle miles." The 12-month moving average was down 0.78% month-over-month and down 10.7% year-over-year. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) was down 0.85% month-over-month and down 11.1% year-over-year.