Tuesday, January 23, 2018

Money Supply Charts Through December 2017

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 January 19, 2018 depicting data through December 2017, with a value of $15,277.2 Billion:
MZMSL
Here is the “MZM Money Stock” chart on a “Percent Change From Year Ago” basis, with a current value of 4.7%:
MZMSL Percent Change From Year Ago
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed January 23, 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 January 18, 2018, depicting data through December 2017, with a value of $13,845.0 Billion:
M2SL
Here is the “M2 Money Stock” chart on a “Percent Change From Year Ago” basis, with a current value of 4.9%:
M2SL Percent Change From Year Ago
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed January 23, 2018:
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The Special Note summarizes my overall thoughts about our economic situation
SPX at 2836.38 as this post is written

The U.S. Economic Situation – January 23, 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 January 19, 2018, with a last value of 26071.72):
(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 2832.97 as this post is written

Monday, January 22, 2018

Updates Of Economic Indicators January 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 January 2018 Chicago Fed National Activity Index (CFNAI) updated as of January 22, 2018:
The CFNAI, with current reading of .27:
CFNAI
Federal Reserve Bank of Chicago, Chicago Fed National Activity Index [CFNAI], retrieved from FRED, Federal Reserve Bank of St. Louis, January 22, 2018;
The CFNAI-MA3, with current reading of .42:
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, January 22, 2018;
As of January 19, 2018 (incorporating data through January 12, 2018) the WLI was at 150.3 and the WLI, Gr. was at 4.5%.
A chart of the WLI,Gr., from Doug Short’s ECRI update post of January 19, 2018:
ECRI WLI,Gr.
Here is the latest chart, depicting the ADS Index from December 31, 2007 through January13, 2018:
ADS Index
The Conference Board Leading (LEI), Coincident (CEI) Economic Indexes, and Lagging Economic Indicator (LAG):
As per the December 21, 2017 press release, titled “The Conference Board Leading Economic Index (LEI) for the U.S. Increased Again” (pdf) the LEI was at 130.9, the CEI was at 116.5, and the LAG was 125.6 in November.
An excerpt from the release:
“The U.S. LEI rose again in November, suggesting that solid economic growth will continue into the first half of 2018,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “In recent months, unemployment insurance claims have returned to pre-hurricane levels. In addition, improving financial indicators, new orders in manufacturing and historically high consumer sentiment have propelled the U.S. LEI even higher.”
Here is a chart of the LEI from Doug Short’s Conference Board Leading Economic Index update of December 21, 2017:
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 2832.97 as this post is written

Friday, January 19, 2018

Long-Term Charts Of The ECRI WLI & ECRI WLI, Gr. – January 19, 2018 Update

As I stated in my July 12, 2010 post (“ECRI WLI Growth History“):
For a variety of reasons, I am not as enamored with ECRI’s WLI and WLI Growth measures as many are.
However, I do think the measures are important and deserve close monitoring and scrutiny.
Below are three long-term charts, from Doug Short’s ECRI update post of January 19, 2018 titled “ECRI Weekly Leading Index Update:  Yet Another Record High for WLI.”  These charts are on a weekly basis through the January 19, 2018 release, indicating data through January 12, 2018.
Here is the ECRI WLI (defined at ECRI’s glossary):
ECRI WLI
This next chart depicts, on a long-term basis, the Year-over-Year change in the 4-week moving average of the WLI:
This last chart depicts, on a long-term basis, the WLI, Gr.:
ECRI WLI,Gr. 4.5
_________
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 2801.24 as this post is written

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 January 12, 2018:
from page 26:
(click on charts to enlarge images)
S&P500 EPS forecasts
from page 27:
S&P500 EPS years 2008-2019
_____
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 2798.03 as this post is written

Thursday, January 18, 2018

S&P500 Bottom Up EPS Forecasts Years 2017, 2018 And 2019

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 January 16, 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, and the Year 2016 value is $118.10/share:
Year 2017 estimate:
$131.46/share
Year 2018 estimate:
$150.37/share
Year 2019 estimate:
$165.69/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 2798.03 as this post is written

Standard & Poor’s S&P500 Earnings Estimates For 2018 And 2019 – As Of January 12, 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 of January 12, 2018:
Year 2018 estimates add to the following:
-From a “bottom up” perspective, operating earnings of $149.04/share
-From a “top down” perspective, operating earnings of N/A
-From a “bottom up” perspective, “as reported” earnings of $138.91/share
Year 2019 estimates add to the following:
-From a “bottom up” perspective, operating earnings of $164.58/share
-From a “top down” perspective, operating earnings of N/A
-From a “bottom up” perspective, “as reported” earnings of N/A
_____
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 2802.20 as this post is written

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 January 18, 2018 update (reflecting data through January 12, 2018) is -1.492.
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 January 18, 2018 incorporating data from January 8, 1971 through January 12, 2018, on a weekly basis.  The January 12, 2018 value is -.93:
NFCI_1-18-18 -.93
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed January 18, 2018:
The ANFCI chart below was last updated on January 18, 2018 incorporating data from January 8,1971 through January 12, 2018, on a weekly basis.  The January 12 value is -.73:
ANFCI
Data Source: FRED, Federal Reserve Economic Data, Federal Reserve Bank of St. Louis; accessed January 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 2797.64 as this post is written