Tuesday, April 24, 2018

Money Supply Charts Through March 2018

For reference purposes, below are two sets of charts depicting growth in the money supply.
The first shows the MZM (Money Zero Maturity), defined in FRED as the following:
M2 less small-denomination time deposits plus institutional money funds.
Money Zero Maturity is calculated by the Federal Reserve Bank of St. Louis.
Here is the “MZM Money Stock” (seasonally adjusted) chart, updated on April 20, 2018 depicting data through March 2018, with a value of $15,345.2 Billion:
MZM Money Supply
Here is the “MZM Money Stock” chart on a “Percent Change From Year Ago” basis, with a current value of 4.1%:
MZM Money Supply Percent Change From Year Ago
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed April 24, 2018:
The second set shows M2, defined in FRED as the following:
M2 includes a broader set of financial assets held principally by households. M2 consists of M1 plus: (1) savings deposits (which include money market deposit accounts, or MMDAs); (2) small-denomination time deposits (time deposits in amounts of less than $100,000); and (3) balances in retail money market mutual funds (MMMFs). Seasonally adjusted M2 is computed by summing savings deposits, small-denomination time deposits, and retail MMMFs, each seasonally adjusted separately, and adding this result to seasonally adjusted M1.
Here is the “M2 Money Stock” (seasonally adjusted) chart, updated on April 19, 2018, depicting data through March 2018, with a value of $13,926.4 Billion:
M2 Money Supply
Here is the “M2 Money Stock” chart on a “Percent Change From Year Ago” basis, with a current value of 4.0%:
M2 Money Supply Percent Change From Year Ago
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed April 24, 2018:
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The Special Note summarizes my overall thoughts about our economic situation
SPX at 2670.29 as this post is written

The U.S. Economic Situation – April 24, 2018 Update

Perhaps the main reason that I write of our economic situation is that I continue to believe, based upon various analyses, that our economic situation is in many ways misunderstood.  While no one likes to contemplate a future rife with economic adversity, current and future economic problems must be properly recognized and rectified if high-quality, sustainable long-term economic vitality is to be realized.
There are an array of indications and other “warning signs” – many readily apparent – that current economic activity and financial market performance is accompanied by exceedingly perilous dynamics.
I have written extensively about this peril, including in the following:
Building Financial Danger” (ongoing updates)
My analyses continues to indicate that the growing level of financial danger will lead to the next stock market crash that will also involve (as seen in 2008) various other markets as well.  Key attributes of this next crash is its outsized magnitude (when viewed from an ultra-long term historical perspective) and the resulting economic impact.  This next financial crash is of tremendous concern, as my analyses indicate it will lead to a Super Depression – i.e. an economy characterized by deeply embedded, highly complex, and difficult-to-solve problems.
For long-term reference purposes, here is a chart of the Dow Jones Industrial Average since 1900, depicted on a monthly basis using a LOG scale (updated through April 20, 2018, with a last value of 24462.94):
(click on chart to enlarge image)(chart courtesy of StockCharts.com)
DJIA since 1900
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The Special Note summarizes my overall thoughts about our economic situation
SPX at 2670.29 as this post is written

Monday, April 23, 2018

Updates Of Economic Indicators April 2018

Here is an update of various indicators that are supposed to predict and/or depict economic activity. These indicators have been discussed in previous blog posts:
The April 2018 Chicago Fed National Activity Index (CFNAI) updated as of April 23, 2018:
The CFNAI, with current reading of .10:
CFNAI_4-23-18 .10
Federal Reserve Bank of Chicago, Chicago Fed National Activity Index [CFNAI], retrieved from FRED, Federal Reserve Bank of St. Louis, April 23, 2018;
The CFNAI-MA3, with current reading of .27:
CFNAIMA3
Federal Reserve Bank of Chicago, Chicago Fed National Activity Index: Three Month Moving Average [CFNAIMA3], retrieved from FRED, Federal Reserve Bank of St. Louis, April 23, 2018;
As of April 20, 2018 (incorporating data through April 13, 2018) the WLI was at 148.9 and the WLI, Gr. was at 3.2%.
A chart of the WLI,Gr., from Doug Short’s ECRI update post of April 20, 2018:
ECRI WLI,Gr.
Here is the latest chart, depicting the ADS Index from December 31, 2007 through April 14, 2018:
ADS Index
The Conference Board Leading (LEI), Coincident (CEI) Economic Indexes, and Lagging Economic Indicator (LAG):
As per the April 19, 2018 press release, titled “The Conference Board Leading Economic Index (LEI) for the U.S. Increased in March” (pdf) the LEI was at 109.0, the CEI was at 103.4, and the LAG was 104.5 in March.
An excerpt from the release:
“The U.S. LEI increased in March, and while the monthly gain is slower than in previous months, its six-month growth rate increased further and points to continued solid growth in the U.S. economy for the rest of the year,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “The strengths among the components of the leading index have been very widespread over the last six months. However, labor market components made negative contributions in March and bear watching in the near future.”
Here is a chart of the LEI from Doug Short’s Conference Board Leading Economic Index update of April 19, 2018:
Conference Board LEI
_________
I post various indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this site are aware, I do not necessarily agree with what they depict or imply.
_____
The Special Note summarizes my overall thoughts about our economic situation
SPX at 2679.84 as this post is written

Friday, April 20, 2018

Trends Of S&P500 Earnings Forecasts

S&P500 earnings trends and estimates are a notably important topic, for a variety of reasons, at this point in time.
FactSet publishes a report titled “Earnings Insight” that contains a variety of information including the trends and expectations of S&P500 earnings.
For reference purposes, here are two charts as seen in the “Earnings Insight” (pdf) report of April 13, 2018:
from page 24:
(click on charts to enlarge images)
S&P500 earnings estimates trends
from page 25:
S&P500 earnings
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I post various economic forecasts because I believe they should be carefully monitored.  However, as those familiar with this site are aware, I do not agree with many of the consensus estimates and much of the commentary in these forecast surveys.
_____
The Special Note summarizes my overall thoughts about our economic situation
SPX at 2693.13 as this post is written

Thursday, April 19, 2018

S&P500 “Bottom Up” EPS Forecasts Years 2018, 2019, And 2020

As many are aware, Thomson Reuters publishes earnings estimates for the S&P500.  (My other posts concerning S&P earnings estimates can be found under the S&P500 Earnings label)
The following estimates are from Exhibit 23 of the “S&P500 Earnings Scorecard” (pdf) of April 19, 2018, and represent an aggregation of individual S&P500 component “bottom up” analyst forecasts.  For reference, the Year 2014 value is $118.78/share, the Year 2015 value is $117.46, the Year 2016 value is $118.10/share, and the Year 2017 value is $132.00/share:
Year 2018 estimate:
$158.18/share
Year 2019 estimate:
$174.04/share
Year 2020 estimate:
$190.66/share
_____
I post various economic forecasts because I believe they should be carefully monitored.  However, as those familiar with this site are aware, I do not agree with many of the consensus estimates and much of the commentary in these forecast surveys.
_____
The Special Note summarizes my overall thoughts about our economic situation
SPX at 2693.13 as this post is written

Standard & Poor’s S&P500 EPS Estimates 2018 2019 – April 11, 2018

As many are aware, Standard & Poor’s publishes earnings estimates for the S&P500.  (My posts concerning their estimates can be found under the S&P500 Earnings label)
For reference purposes, the most current estimates are reflected below, and are as April 11, 2018:
Year 2018 estimates add to the following:
-From a “bottom up” perspective, operating earnings of $155.88/share
-From a “top down” perspective, operating earnings of N/A
-From a “bottom up” perspective, “as reported” earnings of $153.90/share
Year 2019 estimates add to the following:
-From a “bottom up” perspective, operating earnings of $172.06/share
-From a “top down” perspective, operating earnings of N/A
-From a “bottom up” perspective, “as reported” earnings of $168.64
_____
I post various economic forecasts because I believe they should be carefully monitored.  However, as those familiar with this site are aware, I do not agree with many of the consensus estimates and much of the commentary in these forecast surveys.
_____
The Special Note summarizes my overall thoughts about our economic situation
SPX at 2708.64 as this post is written

Wednesday, April 18, 2018

Chicago Fed National Financial Conditions Index (NFCI)

The St. Louis Fed’s Financial Stress Index (STLFSI) is one index that is supposed to measure stress in the financial system.  Its reading as of the April 12, 2018 update (reflecting data through April 6, 2018) is -.896.
Of course, there are a variety of other measures and indices that are supposed to measure financial stress and other related issues, both from the Federal Reserve as well as from private sources.
Two other indices that I regularly monitor include the Chicago Fed National Financial Conditions Index (NFCI) as well as the Chicago Fed Adjusted National Financial Conditions Index (ANFCI).
Here are summary descriptions of each, as seen in FRED:
The National Financial Conditions Index (NFCI) measures risk, liquidity and leverage in money markets and debt and equity markets as well as in the traditional and “shadow” banking systems. Positive values of the NFCI indicate financial conditions that are tighter than average, while negative values indicate financial conditions that are looser than average.
The adjusted NFCI (ANFCI). This index isolates a component of financial conditions uncorrelated with economic conditions to provide an update on how financial conditions compare with current economic conditions.
For further information, please visit the Federal Reserve Bank of Chicago’s web site:
Below are the most recently updated charts of the NFCI and ANFCI, respectively.
The NFCI chart below was last updated on April 18, 2018 incorporating data from January 8, 1971 through April 13, 2018, on a weekly basis.  The April 13, 2018 value is -.75:
NFCI
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed April 18, 2018:
The ANFCI chart below was last updated on April 18, 2018 incorporating data from January 8,1971 through April 13, 2018, on a weekly basis.  The April 13 value is -.47:
ANFCI
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed April 18, 2018:
_________
I post various indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this site are aware, I do not necessarily agree with what they depict or imply.
_____
The Special Note summarizes my overall thoughts about our economic situation
SPX at 2717.03 as this post is written

Tuesday, April 17, 2018

April 2018 IMF Report – Probabilities Of Recession And Deflation

The International Monetary Fund (IMF) recently published the April 2018 “World Economic Outlook.”  The subtitle is ”Cyclical Upswing, Structural Change.”
One area of the report is Figure 1.22 on page 24.  While I do not agree with the current readings of the two measures presented – Probability of Recession and the Probability of Deflation – I do find them to be notable, especially as one can compare these estimates across various global economies.
As one can see, the report states that the U.S. is estimated to have a roughly 18% probability of recession and roughly a 2% probability of deflation for the periods indicated.
_________
I post various economic indicators and indices because I believe they should be carefully monitored.  However, as those familiar with this site are aware, I do not necessarily agree with what they depict or imply.
_____
The Special Note summarizes my overall thoughts about our economic situation
SPX at 2706.39 this post is written