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DiAn Zhu
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I am an aspiring deep value investor. Finding investments that tell a great story which can be matched with quantitative data is arguably the greatest pleasure of the 21st century. My articles tend to be more detailed and analysis focused, and I generally will not cover news events, as there are... More
  • Indicator Review: 5/5/14 - 5/11/14; NMI, Consumer Credit, Wholesale Trade 0 comments
    May 11, 2014 8:50 AM

    The Indicator Review aggregates the primary economic reports released each month/quarter in one place and arranges them in five categories: overall economy, real estate, business operations, business sales, and consumers. The review is updated weekly (usually by Sunday) and is primarily for students and investors who need to catch up on what happened in the market. Any reported errors can be messaged to me or left in the comments. A tutorial on reading indicators can be found on my SA instablog post.

    New Reports: NMI, Consumer Credit, Wholesale Trade

    OVERALL ECONOMY

    GDP (click to enlarge)

    GDP up slightly to $15.95T, Personal Consumption up to $10.91T, Private Investment down to $2.60T, Government Spending down slightly to $2.86T, Trade Deficit up to $0.41T.

    Q1 non-residential investment down 2.1% vs. Q4 up 5.7%. Q4 residential investment down 5.7% vs. Q3 down 7.9%.

    Q1 real exports down 7.6% and imports down 1.4% vs. Q4 up 9.5% and up 1.5%, respectively.

    Employee Situation (click to enlarge)

    Long Term Unemployment down to 35.3% of unemployed.

    Employment up in Professional and business services, Retail trade, Wholesale trade, Food and drinking places, construction, healthcare, mining, and little changed for other major industries.

    Consumer Price Index (click to enlarge)

    Energy index down 0.1% and Food index up 0.4%. For energy: Electricity (1.1%), Natural gas (7.5%), Fuel (-2.9%), Gasoline (-1.7%).

    CPI Core components: Medical care commodities (-0.3%)

    Producer Price Index (click to enlarge)

    Final demand goods same and Final demand services up 0.7% led by Margins for apparel, jewelry, footwear, and accessories retailing (3.3%).

    Intermediate demand: Processed goods (-0.2%), Unprocessed goods (-0.1%), Services (0.4%).

    REAL ESTATE

    Housing Starts (click to enlarge)

    HS MoM regional units and % change: Northeast (115K, 30.7%), Midwest (144K, 65.5%), South (477K, -9.1%), West (210K, -4.5%).

    BP MoM regional: Northeast (136K, 33.3%), Midwest (165K, 26.0%), South (445K, -17.1%), West (244K, 0.0%).

    Existing Home Sales (click to enlarge)

    Existing home sales is comparable to lowest level since Jul'12's level of 4.59M. Growth in housing prices is faster than the historical norm due to inventory shortages. Median existing home sale-price is $198,500, up 7.9% since Mar'13.

    Expected improvement in future months due to ongoing job creation and some shopping activity previously delayed by the weather. Levels should be stronger given current population growth.

    BUSINESS OPERATIONS

    Employment Cost Index (click to enlarge)

    Wages and salaries up 0.3% and benefits up 0.4% in Q1 for all workers.

    Total compensation by occupational groups: Management (0.1%), Sales and office (0.3%), Natural Resources, Construction and Maintenance (0.5%), Production, transportation and material moving (0.6%), Service (0.0%).

    Purchasing Managers Index (click to enlarge)

    PMI: New Orders (55.1), Production (55.7), Employment (54.7), Supplier Deliveries (55.9), Inventories (53.0). 17/18 industries grew, 1 contracted.

    NMI: New Orders (58.2), Business Activity (60.9), Employment (51.3), Supplier Deliveries (50.5). 14/18 industries grew, 4 contracted.

    BUSINESS SALES

    Factory Orders Report (click to enlarge)

    New Orders excluding transportation up 0.6%. Shipments up 0.3%: Durables up 1.2% led by Transportation equipment and non-durables down 0.6 dragged by Petroleum and coal products. Unfulfilled orders up 0.6%. Inventories up 0.1%.

    Unfulfilled orders-to-shipments ratio down to 6.44 from 6.49. Inventories-to-shipments same 1.30

    Wholesale Trade Sales Report (click to enlarge)

    Wholesales of durables up 1.4% dragged by Furniture (-0.6%) but helped by Electrical (4.2%). Non-durables up 1.5% dragged by Misc. nondurables (-2.1%) but helped by Farm products (6.0%).

    Inventory-to-sales ratio same at 1.19.

    Retail Sales Report (click to enlarge)

    Industries with highest YoY: Motor vehicle & parts dealers (9.1%), Nonstore retailers/ecommerce (7.8%), Building material, garden equip., supplies dealers (5.7%).

    Lowest YoY: Gas stations (-3.3%), Sporting goods, hobby, book & music stores (-2.0%), Miscellaneous store retailers (-1.7%).

    CONSUMERS

    April Consumer Confidence = down to 82.3% from 83.9%

    Consumer Credit Report (click to enlarge)

    Total credit up $17.6B to $3.14T, non-revolving credit up $16.4B to $2.28T, revolving credit up $1.1B to $856.7B. Q1 student loans up $32.6B, auto loans up $12.1B vs. Q4 up $12B and $12B respectively.

    Q1 credit card rate down to 11.83% from Q4 11.85%, and Q1 four-year new car loan rate down to 4.23% from Q4 4.42%.

    Personal Income and Outlays (click to enlarge)

    Compensation up 0.5% vs. Feb up 0.3%. Personal current transfer receipts up 0.6% vs. Feb up 0.8%

    Personal Consumption for: Goods up 1.4% vs. Feb down 0.6%. Durables up 2.6%, non-durables up 0.8%. Services up 0.7% vs. Feb up 0.4%

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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