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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. I also post market updates aggregating economic indicator data on my instablog to help students and investors... More
  • Indicator Review: 7/21/14 - 7/27/14; CPI, Existing Home Sales 0 comments
    Aug 24, 2014 3:36 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: CPI, Existing Home Sales

    OVERALL ECONOMY

    GDP

    (click to enlarge)

    GDP down to $15.82T, Personal Consumption up to $10.85T, Private Investment down to $2.56T, Government Spending down slightly to $2.86T, Trade Deficit up to $0.44T.

    Q1 non-residential investment down 1.2% vs. Q4 up 5.7%. Q4 residential investment down 4.2% vs. Q3 down 7.9%.

    Q1 real exports down 8.9% and imports up 1.8% vs. Q4 up 9.5% and up 1.5%, respectively.

    Employee Situation

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    Long Term Unemployment down to 32.8% of unemployed.

    Employment up in Professional and business services, retail trade, food services and drinking places, Health care, Transportation and warehousing, Financial activities, Manufacturing, and Wholesale trade. Little change in other industries including Mining and logging, Construction, Information, and Government.

    Consumer Price Index

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    Energy index up 1.6% and Food index up 0.1%. For energy: Electricity (0.2%), Natural gas (-2.6%), Fuel (-1.7%), Gasoline (3.3%).

    CPI Core components: Commodities less food and energy commodities (0.1%), Services less energy services (0.1%) with sub-indices: Shelter (0.2%), Transportation (0.1%), Medical care (0.0%).

    Producer Price Index

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    Final demand goods up 0.5% and Final demand services up 0.3% attributed mostly to the index for final demand services less trade, transportation, and warehousing (0.3%).

    Intermediate demand: Processed goods (0.4%), Unprocessed goods (-0.9%), Services (0.6%).

    REAL ESTATE

    Housing Starts

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    HS MoM regional units and % change: Northeast (105K, 14.1%), Midwest (219K, 28.1%), South (375K, -29.6%), West (194K, 2.6%).

    BP MoM regional: Northeast (98K, -15.5%), Midwest (178K, 6.6%), South (463K, -6.3%), West (224K, -1.8%).

    Existing Home Sales

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    First time existing home sales reached 5 million since October 2013.

    NAR Chief Economist: Inventories at highest level in over a year, price gains have slowed. New home construction needs to rise by at least 50% to return to a balanced market because supply shortages are Median time on market was 44 days in June, down from 47 last month and 37 since 2013.

    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 (58.9), Production (60.0), Employment (52.8), Supplier Deliveries (51.9), Inventories (53.0). 15/18 industries grew, 3 contracted.

    NMI: New Orders (61.2), Business Activity (57.5), Employment (54.4), Supplier Deliveries (51.0). 14/18 industries grew, 4 contracted.

    BUSINESS SALES

    Factory Orders Report

    (click to enlarge)

    New Orders excluding transportation down 0.1%. Shipments up 0.1%: Durables up 0.3% led by primary metals and non-durables down 0.2 dragged by Chemical products. Unfulfilled orders up 0.6%. Inventories up 0.9%.

    Unfulfilled orders-to-shipments ratio up to 6.48 from 6.42. Inventories-to-shipments same at 1.30.

    Wholesale Trade Sales Report

    (click to enlarge)

    Wholesales of durables up 0.2% dragged by Computing equipment (-1.9%) but helped by Metals (3.2%). Non-durables up 1.1% dragged by Paper (-1.0%), but helped by Farm products (6.6%).

    Inventory-to-sales ratio same as previously revised 1.18.

    Retail Sales Report

    (click to enlarge)

    Industries with highest YoY: Nonstore retailers/ecommerce (8.1%), Health and personal care stores (7.9%), Motor vehicle & parts dealers (6.4%).

    Lowest YoY: Sporting goods, hobby, book & music stores (-2.0%), Gasoline stations (0.6%), Electronics & appliance stores (1.3%).

    CONSUMERS

    June Consumer Confidence down to 84.0% from rev. 84.5%

    Consumer Credit Report

    (click to enlarge)

    Total credit up $19.1B to $3.19T, non-revolving credit up $17.8B to $2.32T, revolving credit up $1.8B to $872.2B. Q1 student loans up $38.9B, auto loans up $13.6B vs. Q4 up $12.0B and $12.2B 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 0.4% vs. Apr up 0.2%. Personal current transfer receipts up 0.4% vs. Apr up 0.1%

    Personal Consumption for: Goods up 0.4% vs. Apr same 0.0%. Durables up 0.7%, non-durables up 0.2%. Services up 0.1% vs. Apr up 0.1%.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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