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Author Topic: US Economics, the stock market , and other investment/savings strategies  (Read 43436 times)
Crafty_Dog
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« Reply #800 on: April 15, 2014, 06:13:11 PM »

http://www.ftportfolios.com/Commentary/EconomicResearch/2014/4/15/the-plow-horse-gets-de-iced
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Crafty_Dog
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« Reply #801 on: April 16, 2014, 11:44:22 AM »

Industrial Production Increased 0.7% in March To view this article, Click Here
Brian S. Wesbury - Chief Economist
Bob Stein, CFA - Deputy Chief Economist
Date: 4/16/2014

Industrial production increased 0.7% in March (+1.2% including revisions to prior months) beating the consensus expected gain of 0.5%. Production is up 3.7% in the past year.

Manufacturing, which excludes mining/utilities, increased 0.6% in March (+1.1% with revisions to prior months). Auto production declined 0.8% in March while non-auto manufacturing increased 0.6%. Auto production is up 5.4% versus a year ago while non-auto manufacturing is up 2.7%.

The production of high-tech equipment rose 0.7% in March and is up 8.3% versus a year ago.

Overall capacity utilization increased to 79.2% in March from 78.8% in February. Manufacturing capacity rose to 76.7% in March.

Implications: Another very solid report from the industrial sector as the Plow Horse continues to thaw. Overall industrial output rose 0.7%, and was up a robust 1.2% with revisions to prior months. Earlier this winter, harsher than normal weather wreaked havoc on the economy slowing production, but that looks to now be over, and a positive payback has ensued. Over the past two months, industrial production has increased at an 11.8% annual rate. Manufacturing which excludes mining and utilities, rose 0.6% in March and was up 1.1% with revisions to prior months, up 12.4% at an annual rate over the past two months. Expect more healthy gains in the next couple of months as weather patterns continue to normalize. Overall production is up a respectable 3.7% from a year ago. We expect continued gains in production as the housing recovery is still young and both businesses and consumers are in a financial position to ramp up investment and the consumption of big-ticket items, like appliances. In particular, note that the output of high-tech equipment is up 8.3% from a year ago, signaling companies’ willingness to upgrade aging equipment from prior years. More big news from today’s report was that capacity utilization was 79.2% in March, above the average of 78.9% over the past twenty years, and the highest level since June 2008. Further gains in production in the year ahead will continue to push capacity use higher, which means companies will have an increasing incentive to build out plants and equipment. Meanwhile, corporate profits and cash on the balance sheet are at record highs, showing that companies have the ability to make these investments.
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Crafty_Dog
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« Reply #802 on: April 21, 2014, 07:01:38 AM »



http://online.wsj.com/news/articles/SB10001424052702304688104579467823517834980?mod=WSJ_hpp_MIDDLENexttoWhatsNewsThird&mg=reno64-wsj
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Crafty_Dog
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« Reply #803 on: April 23, 2014, 07:04:39 PM »

Over the past five years, the pouting pundits of pessimism have focused on countless issues that would bring the economy down. Any growth, they argue, is the result of a Fed induced sugar high.

We don’t buy it.

Through it all, the plow horse keeps plodding ahead. The fundamental growth factors are still in place and, as the Fed tapers, banks are starting to pick up lending. We see upside surprise potential.

Click here to watch the latest Wesbury 101 – Upside Surprise Potential 
http://www.ftportfolios.com/Commentary/EconomicResearch/2014/4/23/upside-surprise-potential
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objectivist1
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« Reply #804 on: April 23, 2014, 07:09:40 PM »

So go ahead and ignore all the negative indicators regarding our staggering debt and faltering economy, and stay fully invested in the market along with Wesbury until you lose it all - or most of it - in the coming crash.  The choice is yours to make.
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"You have enemies?  Good.  That means that you have stood up for something, sometime in your life." - Winston Churchill.
Crafty_Dog
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« Reply #805 on: April 23, 2014, 07:12:23 PM »

The market will need to fall A LOT for what you say to be true.  For all our prophesy, he is far more profit-y, and IMHO we need to keep that in mind and be humble. 
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G M
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« Reply #806 on: April 23, 2014, 07:46:03 PM »

Pay no attention to the market manipulation behind the curtain...
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DougMacG
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« Reply #807 on: April 23, 2014, 10:24:12 PM »




Sixty percent of young Minnesotans who graduated from college in 2011 still didn’t have a full-time job in their second year post-graduation!

http://mn.gov/deed/images/Measuring%20Employment%20Outcomes%20for%20Graduates%20March%202014%20Trends.pdf
« Last Edit: April 23, 2014, 10:44:51 PM by DougMacG » Logged
G M
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« Reply #808 on: April 24, 2014, 12:29:23 AM »

That chart is obviously very racist.
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Crafty_Dog
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« Reply #809 on: April 24, 2014, 08:35:48 AM »

This thread includes in its subject heading "the stock market".  We here have been predicting disaster as the DOW and the NAZ have more than doubled.  That is one helluva a move to have missed-- and if armaggedon (sp?) does not come, some of us are going to have a hard time explaining that.  If it does come, that does not mean it was good investing strategy to have sat on the sidelines in wait of proof of our prophecies.

 
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Crafty_Dog
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« Reply #810 on: April 24, 2014, 11:45:08 AM »

Second post:

New Orders for Durable Goods Increased 2.6% in March
Brian S. Wesbury - Chief Economist
Bob Stein, CFA - Deputy Chief Economist
Date: 4/24/2014

New orders for durable goods increased 2.6% in March (2.5% including revisions to prior months), beating the consensus expected gain of 2.0%. Orders excluding transportation increased 2.0% in March, beating the consensus expected gain of 0.6%. Orders are up 9.1% from a year ago while orders excluding transportation are up 5.1%

The gain in overall orders was led by civilian aircraft and computers & electronic products, but every major category of orders increased.

The government calculates business investment for GDP purposes by using shipments of non-defense capital goods excluding aircraft. That measure increased 1.0% in March and was up at a 1.7% annual rate in Q1 versus the Q4 average.

Unfilled orders increased 0.6% in March and are up 7.5% from last year.

Implications: A very solid, well-rounded report on durable goods today. New orders for durable goods rose 2.6%, beating consensus expectations and the largest gain since November. Once again the transportation sector led the way, particularly orders for civilian aircraft. But, unlike last month, there was broad strength outside the transportation sector. Orders excluding transportation increased 2% in March, the largest gain since January 2013. The best news in today’s report was that shipments of “core” capital goods, which exclude defense and aircraft, increased 1% in March. Plugging these data into our GDP models suggests businesses increased “real” (inflation-adjusted) equipment investment at about a 5% annual rate in Q1. Business investment should accelerate over the next couple of years. Consumer purchasing power is growing and debt ratios are low, leaving room for an upswing in appliances. Meanwhile, businesses have record profits and balance sheet cash at the same time that capacity utilization is above long-term norms, leaving more room (and need) for business investment. Signaling future gains, unfilled orders for “core” capital goods rose 0.6% in March, hitting a new record high, and are up 10% from a year ago. In other news this morning, initial claims for unemployment insurance increased 24,000 last week to 329,000. Continuing claims declined 61,000 to 2.68 million. Plugging these figures into our payroll models suggests an April gain of roughly 210,000, both nonfarm and private. This forecast may change over the next week as we get more data, but it looks like another solid month for job growth.
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DougMacG
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« Reply #811 on: April 24, 2014, 02:04:18 PM »

This thread includes in its subject heading "the stock market".  We here have been predicting disaster as the DOW and the NAZ have more than doubled.  That is one helluva a move to have missed-- and if armaggedon (sp?) does not come, some of us are going to have a hard time explaining that.  If it does come, that does not mean it was good investing strategy to have sat on the sidelines in wait of proof of our prophecies.

Agree 100%.  

Wesbury has been right in hindsight on his conclusion to stay invested in equities over this period.  Also true is that he spins some of his words and picks the economic observations that back his conclusions.  Also true is that he did not see the last collapse.  So he is good on the upside, not good on the downside.  And the naysayers have missed the entire upside.

My interest is the economy more than the stock market; Wesbury and the thread cover both.  The markets have performed well since the last trough, no doubt.  The economy is in a plowhorse 1st gear, under-performing its historic growth line by tens of trillions of dollars of income and tens of millions of workers not employed or under-employed.  Wesbury would agree with this but glosses over the negatives IMHO. When people say stock market, the greatest interest is in where it will go from here as much as what did it do last year, last 5 years etc.  On the future from right here, we don't know if Wesbury or the naysayers are right.  

Alan Greenspan famously suggested “Irrational exuberance” more than 50 months before the tech stock crash of March 2000 and more than 7 years before the DOW bottom of 2002-2003.  Was he right voicing his concerns or was he wrong?  Certainly his timing was lousy.  People made and then lost a lot of money during that period.  While riding the market up, awareness of the vulnerabilities in hindsight was probably a good thing.

Greenspan:  "Clearly, sustained low inflation implies less uncertainty about the future, and lower risk premiums imply higher prices of stocks and other earning assets. We can see that in the inverse relationship exhibited by price/earnings ratios and the rate of inflation in the past. But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?"
— "The Challenge of Central Banking in a Democratic Society", 1996-12-05

« Last Edit: April 24, 2014, 02:36:33 PM by DougMacG » Logged
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