The document summarizes an analyst's downgrade of the consumer staples sector from overweight to neutral based on two key factors: 1) Earnings estimates have declined and valuations have increased for the sector, weakening its fundamentals. 2) Canadian consumer spending growth has slowed significantly, reducing the sector's leverage to the Canadian consumer. The analyst expects a more sluggish performance from the staples sector going forward given these factors.
This document provides a quarterly review of capital markets and the economy for the period ending December 31, 2009. It includes summaries of key economic indicators such as GDP, employment, consumer confidence, and inflation. It also reviews the performance of major asset classes and indexes. Expert commentary is provided on the economic outlook and investment strategy.
The document discusses whether the U.S. economy has achieved "escape velocity," which refers to a self-sustaining economic recovery that allows the Fed to end its bond purchase program. It notes that many economists believe the U.S. will reach escape velocity in 2014 due to broad economic strength and reduced fiscal drag. However, inflation remains below the Fed's target and further tapering will depend on economic data. The document also examines factors like China's economic transition and the implications for commodities.
The document analyzes potential unemployment scenarios in the United States over the next decade. It first examines current unemployment data and trends, finding the unemployment rate at 10% with 17.3% underemployment. It then presents three scenarios: 1) unemployment peaking in late 2010 and returning to pre-recession levels by 2013, based on historical patterns; 2) unemployment declining more slowly due to factors like declining consumer credit, part-time work, and low labor participation; 3) unemployment remaining elevated for years due to challenges across many industries in creating sufficient new jobs.
The stock market has rallied recently even as the economy remains weak, similar to walking up a downward-moving escalator. Some signs suggest parts of the economy may be stabilizing, like improvements in manufacturing and services sectors. While employment and GDP numbers remain poor, consumer spending increased in the first quarter. Inventories fell sharply but this may help future growth. Other positive signs include rising consumer confidence and stabilizing housing. Many companies exceeded low earnings estimates, and rapid responses from corporations, consumers, and governments may help lead to eventual recovery.
The document summarizes an analyst's downgrade of the consumer staples sector from overweight to neutral based on two key factors: 1) Earnings estimates have declined and valuations have increased for the sector, weakening its fundamentals. 2) Canadian consumer spending growth has slowed significantly, reducing the sector's leverage to the Canadian consumer. The analyst expects a more sluggish performance from the staples sector going forward given these factors.
This document provides a quarterly review of capital markets and the economy for the period ending December 31, 2009. It includes summaries of key economic indicators such as GDP, employment, consumer confidence, and inflation. It also reviews the performance of major asset classes and indexes. Expert commentary is provided on the economic outlook and investment strategy.
The document discusses whether the U.S. economy has achieved "escape velocity," which refers to a self-sustaining economic recovery that allows the Fed to end its bond purchase program. It notes that many economists believe the U.S. will reach escape velocity in 2014 due to broad economic strength and reduced fiscal drag. However, inflation remains below the Fed's target and further tapering will depend on economic data. The document also examines factors like China's economic transition and the implications for commodities.
The document analyzes potential unemployment scenarios in the United States over the next decade. It first examines current unemployment data and trends, finding the unemployment rate at 10% with 17.3% underemployment. It then presents three scenarios: 1) unemployment peaking in late 2010 and returning to pre-recession levels by 2013, based on historical patterns; 2) unemployment declining more slowly due to factors like declining consumer credit, part-time work, and low labor participation; 3) unemployment remaining elevated for years due to challenges across many industries in creating sufficient new jobs.
The stock market has rallied recently even as the economy remains weak, similar to walking up a downward-moving escalator. Some signs suggest parts of the economy may be stabilizing, like improvements in manufacturing and services sectors. While employment and GDP numbers remain poor, consumer spending increased in the first quarter. Inventories fell sharply but this may help future growth. Other positive signs include rising consumer confidence and stabilizing housing. Many companies exceeded low earnings estimates, and rapid responses from corporations, consumers, and governments may help lead to eventual recovery.
This document is an NBER working paper that proposes an algorithm for defining recessions based on monthly US economic data. The algorithm nearly perfectly matches the official NBER recession dates, with the only disagreement being over the 1973 peak. The algorithm indicates that as of June 2008, the data do not meet the recession threshold and would need to worsen significantly. The paper argues for a clear, algorithmic definition of recessions in place of the current NBER committee approach. It also critiques alternative definitions like two consecutive quarters of GDP decline.
BlackRock: 2014 Outlook The List - What to Know, What to DoEcon Matters
The document provides a mid-year update on the 2014 outlook for various asset classes and investment themes. It notes that stocks have outperformed bonds so far in 2014 and are on pace for mid to upper single digit returns by year-end. It maintains the views that economic growth will continue improving but remain below trend, and that interest rates will trend upward modestly in the second half of the year. Key investment themes to seek growth while managing volatility, find income but don't overreach, and rethink bonds also remain intact.
- The document analyzes whether returns on the S&P 500 are significantly lower in the month of October compared to other months, a phenomenon known as the "October effect."
- Statistical analysis of monthly S&P 500 returns from 1926-2012 finds no significant evidence that returns are lower in October specifically. However, returns are found to be lower during autumn months in general, suggesting the effect may be due to normal seasonal variations.
- While monthly returns are shown to be somewhat predictive of subsequent year returns, returns in October are not found to be any more predictive than other months. The analysis does not support the idea that October is an unusually dangerous month for investors.
The document discusses the case for Australian interest rates to remain unchanged despite market expectations of a rate cut. It argues that while markets are pricing in a rate cut by year-end, the author believes rates will remain on hold over the remainder of 2015 and 2016 based on several factors: the RBA now seems comfortable with the level of the Australian dollar following its fall; the upcoming GDP report is not expected to show a significant economic slowdown; and strong employment growth suggests the RBA's unemployment rate outlook may be accurate. The author maintains their view that Australian rates will stay on hold, contrary to current market pricing.
This document summarizes a research note from the Platt Retail Institute about testing the impact of a digital communications network (DCN) installed in bank branches. The research involved installing cameras and collecting data from 10 bank branches over 90 days. Key findings include:
1) The DCN was effective at raising customer awareness of messages.
2) Customers reported higher satisfaction levels and more positive perceptions of their bank experience with the DCN.
3) Branch productivity increased with the DCN by allowing more efficient transaction processing and potential cost reductions.
4) The DCN boosted customer awareness of products/services and increased related revenue and transaction activity.
ClearPath Investment Perspectives - Nov 17 2014bcdconna
The document is a weekly investment newsletter from ClearPath Capital Partners dated November 17, 2014. It provides an overview of the US and global economic outlooks, recent market performance, and commentary on stocks, bonds, and consumer spending. Global GDP and inflation are forecast to increase in 2014 and 2015. US GDP is expected to grow 2.9% in 2014 and stock markets posted gains last week, with the S&P 500 up 7.21% for the month. Retail sales rose slightly in October and lower gas prices are expected to boost consumer spending.
The document discusses concerns about potential future inflation in the US economy. While current official inflation measures are relatively low, some argue these measures underestimate true inflation. There are also signs that raw material costs are rising, which could eventually flow through to higher consumer prices. The Federal Reserve's stimulus efforts are intended to boost inflation, with some insiders suggesting a target of 4-6% inflation for a couple years. If high inflation returns, it could pose risks to investors not prepared for that environment.
As expected, the Federal Open Market Committee has embarked on another round of planned asset purchases. In its November 3 policy statement, the FOMC wrote that it expects to buy another $600 billion in long-term Treasuries by the end of 2Q11 ($75 billion per month), in addition to the $35 billion per month in reinvested principal payments from its portfolio of mortgage-backed securities. There has been much criticism of the move in the financial press. Certainly, there are risks in the Fed’s strategy. However, it’s hardly reckless or ill-advised.
This document provides a preview of key expectations for the upcoming Indian budget. It outlines several sectors and stocks that are expected to benefit, including oil and gas stocks which may see the biggest positive impact from government policies. Specific stock picks highlighted for tactical gains over the next 8-10 months are J***D*** and H**M**, which are expected to benefit from upcoming elections and an economic recovery.
February 2016 - Municipal Market ReportJoshua Moews
This document provides an economic update and market commentary for February 2016. It includes key economic statistics for the US, benchmark interest rates and yields, municipal bond market news, and commentary on Federal Reserve policy and interest rates. Inflation indicators rose in January while unemployment fell slightly. Benchmark interest rates declined over the month.
Greece negotiations and tier one US data key for traders this weekHantec Markets
Negotiations between Greece and its creditors (the IMF and the EU) continue, but as yet there is no deal. Greek claims
that a deal was close were swiftly rebuffed by the IMF, leaving Greece still without the final €7.2bn bailout tranche it
needs to pay €1.6bn of debt repayments owed to the IMF in June. However, it would appear a 5th June deadline (for a €300m repayment) is not actually a deadline at all. There is an IMF technicality that allows a lumping together of all
payments, to then be paid at the end of the month.
- The document discusses how Labor Day may mark the end of summer but not the end of market volatility this year. Uncertainty around China, the Fed, commodities, and equities is fueling high volatility.
- Bill Gross, a prominent bond investor, recommends cash or near-cash investments due to ongoing uncertainty and risk. His comments add to concerns that ordinary investors may reduce market exposure.
- Uncertainty around China, the Fed interest rate decision, Europe, and Japan means volatility is likely to continue through the autumn. The document argues this "volatility heat wave" is just beginning.
Is the US dollar set for a correction as the year draws to a close?5Hantec Markets
Well, the bond markets certainly called the Fed decision pretty much spot on, in that there was very little volatility on the FOMC rates announcement. However, could it be that it was the euphoric reaction from the equity markets that was the wrong call?
Another Step in Canadian Federal Pension RepairEmily Jackson
The document summarizes Canada's trade performance in Q1 2014. Key points:
- Canada registered its first trade surplus since 2011, fueled by record energy trade surplus that offset a non-energy trade deficit.
- Exports and imports contracted in Q1 due to weather impacts and a trucker strike, but net exports are expected to contribute to GDP growth.
- The weaker Canadian dollar and stronger U.S. and European growth are expected to boost Canadian exports, especially energy and machinery, through 2015. Transportation constraints remain a challenge for some sectors like agriculture.
- The document is a 2016 outlook report from First National Bank's wealth management division.
- It predicts another year of low stock market returns and increased volatility as the Federal Reserve raises interest rates.
- The US economy is expected to continue expanding at a moderate 2.5% pace, supported by a strong job market but facing headwinds from weak business investment and slowing growth in emerging markets like China.
- Inflation is predicted to remain moderate due to factors like the strong dollar and low commodity prices.
1) The global investment landscape may realign in 2016 as major central banks change course, with the US expected to raise rates, Japan potentially tapering QE, and China's reforms promoting growth.
2) China has successfully rebalanced its economy away from heavy industry and towards services, accounting for half of GDP, but headlines still focus on declines in manufacturing.
3) Infrastructure investment in China has stabilized and signs point to a potential cyclical upswing in housing, which could drive broader economic growth and commodity demand in the coming year.
The document provides an overview of recent US economic data and projections, including:
1) Several key economic indicators are showing continued recovery, such as GDP growth, unemployment claims, and consumer spending. However, unemployment remains elevated.
2) Inflation expectations remain low according to market indicators and Fed forecasts. The federal budget deficit is projected to remain high over the next decade, increasing the national debt burden.
3) Overall the recovery is expected to continue gradually, but significant downside risks remain, such as a double-dip recession or failure to reduce long-term budget imbalances.
The document provides an overview of recent US economic data and projections. It discusses improving indicators for GDP growth, unemployment claims, consumer spending and inflation expectations. Housing starts are gradually recovering but vehicle sales have far to go. The federal budget deficit was $1.3 trillion in 2010 and is projected to be $1.5 trillion in 2011, with the debt-to-GDP ratio expected to continue rising according to baseline forecasts.
This document is an NBER working paper that proposes an algorithm for defining recessions based on monthly US economic data. The algorithm nearly perfectly matches the official NBER recession dates, with the only disagreement being over the 1973 peak. The algorithm indicates that as of June 2008, the data do not meet the recession threshold and would need to worsen significantly. The paper argues for a clear, algorithmic definition of recessions in place of the current NBER committee approach. It also critiques alternative definitions like two consecutive quarters of GDP decline.
BlackRock: 2014 Outlook The List - What to Know, What to DoEcon Matters
The document provides a mid-year update on the 2014 outlook for various asset classes and investment themes. It notes that stocks have outperformed bonds so far in 2014 and are on pace for mid to upper single digit returns by year-end. It maintains the views that economic growth will continue improving but remain below trend, and that interest rates will trend upward modestly in the second half of the year. Key investment themes to seek growth while managing volatility, find income but don't overreach, and rethink bonds also remain intact.
- The document analyzes whether returns on the S&P 500 are significantly lower in the month of October compared to other months, a phenomenon known as the "October effect."
- Statistical analysis of monthly S&P 500 returns from 1926-2012 finds no significant evidence that returns are lower in October specifically. However, returns are found to be lower during autumn months in general, suggesting the effect may be due to normal seasonal variations.
- While monthly returns are shown to be somewhat predictive of subsequent year returns, returns in October are not found to be any more predictive than other months. The analysis does not support the idea that October is an unusually dangerous month for investors.
The document discusses the case for Australian interest rates to remain unchanged despite market expectations of a rate cut. It argues that while markets are pricing in a rate cut by year-end, the author believes rates will remain on hold over the remainder of 2015 and 2016 based on several factors: the RBA now seems comfortable with the level of the Australian dollar following its fall; the upcoming GDP report is not expected to show a significant economic slowdown; and strong employment growth suggests the RBA's unemployment rate outlook may be accurate. The author maintains their view that Australian rates will stay on hold, contrary to current market pricing.
This document summarizes a research note from the Platt Retail Institute about testing the impact of a digital communications network (DCN) installed in bank branches. The research involved installing cameras and collecting data from 10 bank branches over 90 days. Key findings include:
1) The DCN was effective at raising customer awareness of messages.
2) Customers reported higher satisfaction levels and more positive perceptions of their bank experience with the DCN.
3) Branch productivity increased with the DCN by allowing more efficient transaction processing and potential cost reductions.
4) The DCN boosted customer awareness of products/services and increased related revenue and transaction activity.
ClearPath Investment Perspectives - Nov 17 2014bcdconna
The document is a weekly investment newsletter from ClearPath Capital Partners dated November 17, 2014. It provides an overview of the US and global economic outlooks, recent market performance, and commentary on stocks, bonds, and consumer spending. Global GDP and inflation are forecast to increase in 2014 and 2015. US GDP is expected to grow 2.9% in 2014 and stock markets posted gains last week, with the S&P 500 up 7.21% for the month. Retail sales rose slightly in October and lower gas prices are expected to boost consumer spending.
The document discusses concerns about potential future inflation in the US economy. While current official inflation measures are relatively low, some argue these measures underestimate true inflation. There are also signs that raw material costs are rising, which could eventually flow through to higher consumer prices. The Federal Reserve's stimulus efforts are intended to boost inflation, with some insiders suggesting a target of 4-6% inflation for a couple years. If high inflation returns, it could pose risks to investors not prepared for that environment.
As expected, the Federal Open Market Committee has embarked on another round of planned asset purchases. In its November 3 policy statement, the FOMC wrote that it expects to buy another $600 billion in long-term Treasuries by the end of 2Q11 ($75 billion per month), in addition to the $35 billion per month in reinvested principal payments from its portfolio of mortgage-backed securities. There has been much criticism of the move in the financial press. Certainly, there are risks in the Fed’s strategy. However, it’s hardly reckless or ill-advised.
This document provides a preview of key expectations for the upcoming Indian budget. It outlines several sectors and stocks that are expected to benefit, including oil and gas stocks which may see the biggest positive impact from government policies. Specific stock picks highlighted for tactical gains over the next 8-10 months are J***D*** and H**M**, which are expected to benefit from upcoming elections and an economic recovery.
February 2016 - Municipal Market ReportJoshua Moews
This document provides an economic update and market commentary for February 2016. It includes key economic statistics for the US, benchmark interest rates and yields, municipal bond market news, and commentary on Federal Reserve policy and interest rates. Inflation indicators rose in January while unemployment fell slightly. Benchmark interest rates declined over the month.
Greece negotiations and tier one US data key for traders this weekHantec Markets
Negotiations between Greece and its creditors (the IMF and the EU) continue, but as yet there is no deal. Greek claims
that a deal was close were swiftly rebuffed by the IMF, leaving Greece still without the final €7.2bn bailout tranche it
needs to pay €1.6bn of debt repayments owed to the IMF in June. However, it would appear a 5th June deadline (for a €300m repayment) is not actually a deadline at all. There is an IMF technicality that allows a lumping together of all
payments, to then be paid at the end of the month.
- The document discusses how Labor Day may mark the end of summer but not the end of market volatility this year. Uncertainty around China, the Fed, commodities, and equities is fueling high volatility.
- Bill Gross, a prominent bond investor, recommends cash or near-cash investments due to ongoing uncertainty and risk. His comments add to concerns that ordinary investors may reduce market exposure.
- Uncertainty around China, the Fed interest rate decision, Europe, and Japan means volatility is likely to continue through the autumn. The document argues this "volatility heat wave" is just beginning.
Is the US dollar set for a correction as the year draws to a close?5Hantec Markets
Well, the bond markets certainly called the Fed decision pretty much spot on, in that there was very little volatility on the FOMC rates announcement. However, could it be that it was the euphoric reaction from the equity markets that was the wrong call?
Another Step in Canadian Federal Pension RepairEmily Jackson
The document summarizes Canada's trade performance in Q1 2014. Key points:
- Canada registered its first trade surplus since 2011, fueled by record energy trade surplus that offset a non-energy trade deficit.
- Exports and imports contracted in Q1 due to weather impacts and a trucker strike, but net exports are expected to contribute to GDP growth.
- The weaker Canadian dollar and stronger U.S. and European growth are expected to boost Canadian exports, especially energy and machinery, through 2015. Transportation constraints remain a challenge for some sectors like agriculture.
- The document is a 2016 outlook report from First National Bank's wealth management division.
- It predicts another year of low stock market returns and increased volatility as the Federal Reserve raises interest rates.
- The US economy is expected to continue expanding at a moderate 2.5% pace, supported by a strong job market but facing headwinds from weak business investment and slowing growth in emerging markets like China.
- Inflation is predicted to remain moderate due to factors like the strong dollar and low commodity prices.
1) The global investment landscape may realign in 2016 as major central banks change course, with the US expected to raise rates, Japan potentially tapering QE, and China's reforms promoting growth.
2) China has successfully rebalanced its economy away from heavy industry and towards services, accounting for half of GDP, but headlines still focus on declines in manufacturing.
3) Infrastructure investment in China has stabilized and signs point to a potential cyclical upswing in housing, which could drive broader economic growth and commodity demand in the coming year.
The document provides an overview of recent US economic data and projections, including:
1) Several key economic indicators are showing continued recovery, such as GDP growth, unemployment claims, and consumer spending. However, unemployment remains elevated.
2) Inflation expectations remain low according to market indicators and Fed forecasts. The federal budget deficit is projected to remain high over the next decade, increasing the national debt burden.
3) Overall the recovery is expected to continue gradually, but significant downside risks remain, such as a double-dip recession or failure to reduce long-term budget imbalances.
The document provides an overview of recent US economic data and projections. It discusses improving indicators for GDP growth, unemployment claims, consumer spending and inflation expectations. Housing starts are gradually recovering but vehicle sales have far to go. The federal budget deficit was $1.3 trillion in 2010 and is projected to be $1.5 trillion in 2011, with the debt-to-GDP ratio expected to continue rising according to baseline forecasts.
The document is a monthly report from Laird Research that provides economic data and analysis from around the world. It includes indicators for the US economy, global financial markets, key interest rates, inflation, and employment, business activity, consumption and housing data for the US. It also includes indicators for Canada, Europe, China, and other regions. The report finds that the US economy continues to grow while Europe faces challenges from fiscal austerity, and that lower oil prices are slowing growth in Canada but not creating a manufacturing boom.
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
[4:55 p.m.] Bryan Oates
OJPs are becoming a critical resource for policy-makers and researchers who study the labour market. LMIC continues to work with Vicinity Jobs’ data on OJPs, which can be explored in our Canadian Job Trends Dashboard. Valuable insights have been gained through our analysis of OJP data, including LMIC research lead
Suzanne Spiteri’s recent report on improving the quality and accessibility of job postings to reduce employment barriers for neurodivergent people.
Decoding job postings: Improving accessibility for neurodivergent job seekers
Improving the quality and accessibility of job postings is one way to reduce employment barriers for neurodivergent people.
5 Tips for Creating Standard Financial ReportsEasyReports
Well-crafted financial reports serve as vital tools for decision-making and transparency within an organization. By following the undermentioned tips, you can create standardized financial reports that effectively communicate your company's financial health and performance to stakeholders.
Lecture slide titled Fraud Risk Mitigation, Webinar Lecture Delivered at the Society for West African Internal Audit Practitioners (SWAIAP) on Wednesday, November 8, 2023.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
How Does CRISIL Evaluate Lenders in India for Credit RatingsShaheen Kumar
CRISIL evaluates lenders in India by analyzing financial performance, loan portfolio quality, risk management practices, capital adequacy, market position, and adherence to regulatory requirements. This comprehensive assessment ensures a thorough evaluation of creditworthiness and financial strength. Each criterion is meticulously examined to provide credible and reliable ratings.
Seminar: Gender Board Diversity through Ownership NetworksGRAPE
Seminar on gender diversity spillovers through ownership networks at FAME|GRAPE. Presenting novel research. Studies in economics and management using econometrics methods.
1. ....
The Laird Economics Report
Jan 11, 2014
Where we are now . . . . . . . . . . . . . . . . . . . . . . . . 1
Indicators for US Economy . . . . . . . . . . . . . . . . . . . 3
Global Financial Markets . . . . . . . . . . . . . . . . . . . . 5
US Interest & Inflation Rates . . . . . . . . . . . . . . . . . 10
QE Taper Tracker . . . . . . . . . . . . . . . . . . . . . . . . . 12
Exchange Rates . . . . . . . . . . . . . . . . . . . . . . . . . . 13
US Banking Indicators . . . . . . . . . . . . . . . . . . . . . . 14
US Employment Indicators . . . . . . . . . . . . . . . . . . . 15
US Business Activity Indicators . . . . . . . . . . . . . . . . 16
US Consumption Indicators . . . . . . . . . . . . . . . . . . 17
US Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Global Business Indicators . . . . . . . . . . . . . . . . . . . 19
Canadian Indicators . . . . . . . . . . . . . . . . . . . . . . . 21
European Indicators . . . . . . . . . . . . . . . . . . . . . . . 22
Chinese Indicators . . . . . . . . . . . . . . . . . . . . . . . . 24
Global Climate Change . . . . . . . . . . . . . . . . . . . . . 25
Where we are now
Welcome to The Laird Economics Report. This report looks at
where we are today based on a presentation of economic indicators
with some historical context.
Happy New Year! Just in time for the end of the year, the dreaded
“Taper” has begun - the beginning of the end of the latest round of
Quantitative Easing in the U.S. This was started because with all the
budget cuts, shutdowns and sequesters, the Fed felt that fiscal help for
the economy (i.e. increased spending) was not going to happen, so it
needed some monetary help until “things got better”.
The U.S. economy over the past year has been slowly improving in
fits and starts. In fact, the Fed had originally hinted in summer 2013
that it might start the taper soon - which made sense given evidence of
improvement. However, the stock market had an immediate negative
reaction - this is surprising, as you might expect that news of growing
economic strength would be welcomed by the market.
There are two explanations I can think of for this reaction: (1) the
Fed relishes its role in “taking away the punch bowl at the party too
soon” - but in this case, the economy was believed to be so weak in its
recovery that the Fed was acting too soon; and/or (2) taking up long
term rates will bring up borrowing costs for corporations and reduce
discount rates that determine long term prices under net present value
models - the impacts of which are more than the purported improve-
ments in earnings increases in a stronger economy.
It’s hard to say which of these is true (and there’s probably other
reasons I haven’t thought of) because the market freak-out resulted in
the Fed walking back those comments pretty quickly - this is unsurpris-
ing as the Fed’s philosophy is to try and give clear guidance of what it
is going to do - surprises are a bad thing in their minds.
So, with additional strengthening, the long awaited taper was an-
nounced in December - and it is truly baby steps. QE isn’t going to
end, as much as peter out - see the Taper Tracker at the back of the
report for some historical context. I’ll run the tracker for the next little
while to show where we are in the taper.
One thing worth pointing out is that all of this hinges on the
2. strength of the economy. The Fed has described two key indicators
that they would consider in assessing that health (though in practice,
they look at everything): inflation at the 2% target rate and unemploy-
ment at the 6.5% target rate.
Inflation is important to consider because while the monetary fights
of the past have been about taming inflation, the current concerns are
that inflation is too low. Part of the point of QE was to reduce long
term rates and to increase liquidity in the economy - inflation being
related to these two points.
The bigger issue is unemployment. We have been charting the path
of U.S. unemployment regularly in this report and it would seem that
they are hitting their 6.5% target (most recently at 6.7% in December).
However, unemployment only counts people who are actively looking
for work, but who cannot find it.
A different approach is to look at employment participation - the
ratio of employed people versus the population as a whole. There was a
huge drop in the recession and there’s been very little recovery - these
people without jobs are not showing up in the improving unemploy-
ment numbers. I think that this is partially the reason why the taper,
now that it has come, has been so delicate: things look better than
they are. Corporate earnings are up, but people aren’t that happy. See
also the various consumer confidence indicies.
Formatting Notes The grey bars on the various charts are OECD
recession indicators for the respective countries. In many cases, the last
available value is listed, along with the median value (measured from
as much of the data series as is available).
Subscription Info For a FREE subscription to this monthly re-
port, please email us at jimalaird@gmail.com
The Laird Report, Jan 11, 2014
US Employment Ratio and Unemployment Rate
EmploymentPopulationRatio
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
5658606264
1210864
UnemploymentRate(reversed)
Employment Ratio
Unemployment Rate
Divergence between rates
The Laird Report Jan 11, 2014 Page 2
3. Indicators for US Economy
Leading indicators are indicators that usually change before the
economy as a whole changes. They are useful as short-term predictors
of the economy. Our leading indicators include the Leading Index which
summarizes multiple indicators; initial jobless claims and hours worked
(both decrease quickly when demand for employee services drops and
vice versa); purchasing manager indicies; new order and housing per-
mit indicies; delivery timings (longer timings imply more demand in
the system) and consumer sentiment (how consumers are feeling about
their own financial situation and the economy in general).
Leading Index for the US
Index:Est.6monthgrowth
−3−1123
median: 1.41
Nov 2013: 1.52
Growth
Contraction
Initial Unemployment Claims
1000'sofClaimsperWeek
200400600
median: 354.00
Jan 2014: 349.00
Manufacturing Ave. Weekly Hours Worked
Hours
39.040.041.042.0
median: 40.60
Dec 2013: 42.10
ISM Manufacturing: PMI Composite Index
Index:SteadyState=50
3040506070
median: 53.25
Dec 2013: 57.00
expanding economy
contracting economy
Manufacturers' New Orders: Durable Goods
BillionsofDollars
120160200240
median: 181.16
Nov 2013: 241.62
ISM Manufacturing: Supplier Deliveries
Index
40506070
median: 51.50
Dec 2013: 54.70
Slower Deliveries
Faster Deliveries
Capex (ex. Defense & Planes)
Percentchange(3months)
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
−10−505
median: 0.92
Nov 2013: 0.64
Chicago Fed National Activity Index
IndexValue
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
−4−202
median: 0.07
Nov 2013: 0.60
U. Michigan: Consumer Sentiment
Index1966Q1=100
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
507090110
median: 88.45
Dec 2013: 82.50
The Laird Report Jan 11, 2014 Page 3
4. Leading Indicators vs. Real GDP Growth
We can model the various leading indicators versus changes in real
GDP as a way of inidicating their relationship. The plots below show
the correlations between the indicators and, using a simple linear model,
the corresponding real GDP change in the next quarter consistant with
that level. The red dot shows the current predicted value. The red bar
at the bottom shows the 25%-75% confidence intervals for real GDP
change. The green lines show the regression line along with confidence
intervals. Given these are simple univariate models, these plots are
best used to estimate growth/no-growth scenarios, rather than partic-
ular growth levels.
−2 −1 0 1 2 3 4
Leading Index vs Real GDP
% QoQ Change in GDP (+1Q)
EstimatedGDP%Growth
−3
−2
−1
0
1
2
3 r2
: 0.56
−2 −1 0 1 2 3 4
Initial UI Claims vs Real GDP
% QoQ Change in GDP (+1Q)%ChangeinClaims
−20
−10
0
10
20
30
40
r2
: 0.35
−2 −1 0 1 2 3 4
% Change in Hours Worked vs Real GDP
% QoQ Change in GDP (+1Q)
%ChangeinHours
−1.0
−0.5
0.0
0.5
1.0
r2
: 0.31
−2 −1 0 1 2 3 4
PMI vs Real GDP
% QoQ Change in GDP (+1Q)
PMIIndexValue
30
40
50
60
70
r2
: 0.26
−2 −1 0 1 2 3 4
Durable Goods Orders vs Real GDP
% QoQ Change in GDP (+1Q)
%ChangeinGoodsOrdered
−15
−10
−5
0
5
r2
: 0.24
−2 −1 0 1 2 3 4
Suppliers Index vs Real GDP
% QoQ Change in GDP (+1Q)
SuppliersIndex
−0.2
−0.1
0.0
0.1
0.2
0.3 r2
: 0.058
−2 −1 0 1 2 3 4
Capex vs Real GDP
% QoQ Change in GDP (+1Q)
%ChangeinNewOrders
−8
−6
−4
−2
0
2
r2
: 0.19
−2 −1 0 1 2 3 4
National Activity Index vs Real GDP
% QoQ Change in GDP (+1Q)
IndexValue
−4
−3
−2
−1
0
1
2
r2
: 0.50
−2 −1 0 1 2 3 4
Consumer Sentiment vs Real GDP
% QoQ Change in GDP (+1Q)
Sentiment 60
70
80
90
100
110
r2
: 0.17
The Laird Report Jan 11, 2014 Page 4
5. Global Financial Markets
Global Stock Market Returns
Country Index Name Close Date Current
Value
Weekly
Change
Monthly
Change
3 month
Change
Yearly
Change
Corr to
S&P500
Corr to
TSX
North America
USA S&P 500 Jan 10 1842.4 0.6% I 2.2% I 8.9% I 25.2% I 1.00 0.73
USA NASDAQ Composite Jan 10 4174.7 1.0% I 2.8% I 11.0% I 33.7% I 0.91 0.67
USA Wilshire 5000 Total Market Jan 10 19674.0 0.7% I 2.8% I 9.0% I 26.8% I 0.99 0.73
Canada S&P TSX Jan 10 13747.5 1.5% I 3.2% I 6.6% I 9.1% I 0.73 1.00
Europe and Russia
France CAC 40 Jan 10 4250.6 0.1% I 3.9% I 0.8% I 14.8% I 0.52 0.53
Germany DAX Jan 10 9473.2 0.4% I 3.9% I 9.1% I 22.9% I 0.54 0.49
United Kingdom FTSE Jan 10 6739.9 0.1% I 3.3% I 4.8% I 10.5% I 0.49 0.54
Russia Market Vectors Russia ETF Jan 10 27.5 -0.9% J -0.3% J -4.6% J -6.0% J 0.69 0.57
All Europe Euro Stoxx 50 Jan 09 3090.3 0.5% I 3.4% I 6.4% I 14.2% I 0.55 0.50
Asia
Taiwan TSEC weighted index Jan 10 8529.4 -0.2% J 1.0% I 2.2% I 9.2% I -0.07 0.08
China Shanghai Composite Index Jan 10 2013.3 -3.4% J -10.0% J -8.1% J -11.8% J -0.13 -0.09
Japan NIKKEI 225 Jan 10 15912.1 0.0% I 1.9% I 12.1% I 49.4% I 0.29 0.20
Hong Kong Hang Seng Jan 10 22846.2 0.1% I -3.8% J -0.5% J -2.2% J 0.04 0.14
Korea Kospi Jan 10 1938.5 -0.4% J -2.8% J -3.1% J -3.4% J 0.14 0.19
South Asia and Austrailia
India Bombay Stock Exchange Jan 10 20758.5 -0.4% J -2.3% J 2.4% I 5.6% I 0.27 0.24
India S&P CNX NIFTY Jan 10 6171.4 -0.6% J -2.5% J 2.5% I 3.4% I 0.26 0.23
Indonesia Jakarta Jan 10 4255.0 -0.1% J -0.5% J -5.2% J -1.4% J 0.10 0.23
Malaysia FTSE Bursa Malaysia KLCI Jan 10 1826.6 -0.4% J -0.9% J 2.9% I 8.4% I 0.07 0.04
Australia All Ordinaries Jan 10 5316.3 -0.7% J 3.3% I 3.3% I 12.0% I 0.06 0.11
New Zealand NZX 50 Index Gross Jan 10 4864.4 2.0% I 3.4% I 3.1% I 17.7% I 0.00 0.08
South America
Brasil IBOVESPA Jan 10 49696.0 -2.5% J -2.5% J -6.2% J -19.4% J 0.39 0.35
Argentina MERVAL Buenos Aires Jan 10 5490.9 2.0% I 5.1% I 6.3% I 76.3% I 0.31 0.33
Mexico Bolsa index Jan 10 1842.4 0.6% I 2.2% I 8.9% I 25.2% I 1.00 0.73
MENA and Africa
Egypt Market Vectors Egypt ETF Jan 10 56.2 4.1% I 6.6% I 10.7% I 9.1% I 0.25 0.34
Market Vectors Gulf States ETF Jan 10 28.0 1.9% I 7.0% I 11.6% I 33.5% I 0.36 0.23
South Africa iShares MSCI South Africa Index Jan 10 62.2 0.5% I 0.0% I -3.1% J -8.7% J 0.67 0.57
Market Vectors Africa ETF Jan 10 30.5 1.1% I 1.2% I 2.8% I -0.3% J 0.60 0.65
Commodities
USD Spot Oil West Texas Int. Jan 06 $93.1 -5.8% J -4.5% J -9.7% J -0.1% J 0.16 0.09
USD Gold LME Spot Jan 10 $1232.2 0.0% K -1.1% J -5.1% J -25.9% J -0.11 -0.12
Note: Correlations are based on daily arithmetic returns for the most recent 100 trading days.
The Laird Report Jan 11, 2014 Page 5
6. S&P 500 Composite Index
The S&P 500 Composite Index is widely regarded as the best single
gauge of the large cap U.S. equities market. A key figure is the valua-
tion level of the S&P500 as measured by the Price/Earnings ratio. We
present two versions: (1) a 12-month trailing earnings version which
reflects current earnings but is skewed by short term variances and (2)
a cyclically adjusted version which looks at the inflation adjusted earn-
ings over a 10 year period (i.e. at least one business cycle). Forecasted
earnings numbers are estimates provided by S&P.
S&P 500 Stock Price Index (USD$ Inflation Adjusted to current prices − Log Scale)
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
100
200
350
500
750
1000
1300
1750
100
200
350
500
750
1000
1300
1750
S&P Quarterly Earnings (USD$ Inflation Adjusted to current prices)
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
−5.00
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
−5.00
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
Tech Bubble
Japanese Asset Bubble
House Bubble
Asian Financial Crisis
US Financial Crisis
Eurozone crisis
Oil Crisis I Oil Crisis II
Gulf War
Savings and Loans Crisis
High Inflation Period
Afganistan/Iraq WarVietnam War
Reported Earnings
Operating Earnings
Trailing P/E Ratios for S&P500
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
01020304050
01020304050
12−month P/E ( median = 17.3, Jan = 18.2)
10−year CAPE ( median = 19.4, Jan = 24.1)
The Laird Report Jan 11, 2014 Page 6
7. S&P 500 Composite Distributions
This is a view of the price performance of the S&P 500 index com-
panies. The area of each box is proportional to the company’s market
cap, while the colour is determined by the percentage change in price
over the past month. In addition, companies are sorted according to
their industry group.
AAPL
−3.3%
GOOG
7.2%
MSFT
−6.3%
IBM
5.5%
ORCL
9%
FB
23%
V
7.8%
INTC
7.7%
QCOM CSCO
MA
11%
EBAY
ACN HPQ
EMC
ADP
CRM
MU
FIS
CA
BRK−A
WFC
4%
JPM
3.3%
BAC
6.7%
C
4%
AXP
GS AIG
USB MS
MET
BLK
SPG
COF
PRU
PNC
BK
BEN
ACE
STT
AMT
TRV
AFL
MMC CME
AON
ALL
L
WY
BXP
RF
XL
AMZN
DIS
HD
MCD
FOXA
NKE
F
TWX
PCLN
SBUX
GM
LOW
TJX
TGT
VIAB
DTV
CBS
TWC
JCI
YUM
CCL
M
DG
LB
RL
JNJ
0.49%
PFE
−3.6%
MRK
GILD BMY
ABBV UNH BIIB
ABT
MDT
LLY
BAX
ACT
COV
WLP AET
CI
CAH
A
GE
1.9%
BA
UTX
3.2%
UPS
MMM UNP
HON
CAT
LMT
PCP
ITW
ETN
DE
GD
WM PH
IR
WMT
−3.2%
PG
−3.6%
KO
0.12%
PM
PEP
CVS
4.3%
MO
MDLZ
CL
KMB
KRFT
GIS EL
K
HSY
KR
LO
XOM
7.5%
CVX
−1.1%
SLB
0.65%
COP
OXY
PSX
HAL
APC
KMI
APA
VLO
HES
SE PXD
NE
MON
DD
DOW
LYB
PX
PPG
APD
IP
CF
AA
DUK D
SO
EXC PPL
ED
NI
T
−2.1%
VZ
−2%
CCI
Information Technology
Financials
Consumer Discretionary
Health Care
Industrials Consumer Staples
Energy
Materials Utilities
Telecommunications
Services
<−25.0% −20.0% −15.0% −10.0% −5.0% 0.0% 5.0% 10.0% 15.0% 20.0% >25.0%
% Change in Price from Dec 01, 2013 to Jan 10, 2014
Average Median Median Median
Sector Change P/Sales P/Book P/E
Information Technology 4.5% I 3.1 3.9 25.2
Industrials 4.1% I 1.7 3.3 21.7
Materials 3.9% I 1.3 3.3 23.1
Health Care 3.3% I 3.2 3.7 24.2
Financials 3.3% I 2.9 1.5 18.6
Average Median Median Median
Sector Change P/Sales P/Book P/E
Consumer Discretionary 2.6% I 1.6 4.1 19.7
Utilities 2.0% I 1.3 1.4 18.2
Energy 1.8% I 1.8 1.7 18.0
Consumer Staples -0.2% J 1.8 4.9 20.5
Telecommunications Services -1.8% J 1.1 3.0 61.9
The Laird Report Jan 11, 2014 Page 7
8. US Equity Valuations
A key valuation metric is Tobin’s q: the ratio between the market
value of the entire US stock market versus US net assets at replacement
cost (ie. what you pay versus what you get). Warren Buffet famously
follows stock market value as a percentage of GNP, which is highly
(93%) correlated to Tobin’s q.
We can also take the reverse approach: assume the market has
valuations correct, we can determine the required returns of future es-
timated earnings. These are quoted for both debt (using BAA rated
securities as a proxy) and equity premiums above the risk free rate (10
year US Treasuries). These figures are alternate approaches to under-
standing the current market sentiment - higher premiums indicate a
demand for greater returns for the same price and show the level of
risk-aversion in the market.
Tobin's q (Market Equity / Market Net Worth) and S&P500 Price/Sales
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
0.25
0.50
0.75
1.00
1.25
1.50
0.25
0.50
0.75
1.00
1.25
1.50
Buying assets at a discount
Paying up for growth
Tobin Q (median = 0.75, Sep = 0.98)
S&P 500 Price/Sales (median = 1.40, Sep = 1.51)
Equity and Debt Risk Premiums: Spread vs. Risk Free Rate (10−year US Treasury)
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
0%
2%
4%
6%
8%
10%
12%
0%
2%
4%
6%
8%
10%
12%
Implied Equity Premium (median = 4.2%, Dec = 4.7%)
Debt (BAA) Premium (median = 2.0%, Dec = 2.3%)
The Laird Report Jan 11, 2014 Page 8
9. US Mutual Fund Flows
Fund flows describe the net investments in equity and bond mutual
funds in the US market, as described in ICI’s “Trends in Mutual Fund
Investing” report. Note however that this is only part of the story as
it does not include ETF fund flows - part of the changes are investors
entering or leaving the market, and part is investors shifting to ETF’s
from mutual funds.
US Net New Investment Cash Flow to Mutual Funds
US$billions(monthly)
2007 2008 2009 2010 2011 2012 2013
−40−2002040
Domestic Equity
World Equity
Taxable Bonds
Municipal Bonds
US Net New Investment Cash Flow to Mutual Funds
US$billions(Monthly)
2007 2008 2009 2010 2011 2012 2013
−60−40−200204060
Flows to Equity
Flows to Bonds
Net Market Flows
The Laird Report Jan 11, 2014 Page 9
10. US Interest & Inflation Rates
Yield Curve - US Treasuries
US Treasury Yield Curves
ForwardOvernightRates(%)
13
14
15
16
17
18
19
20
21
22
23
0.00.51.01.52.02.53.0
09 Jan 14 ( Today )
09 Dec 13 ( 1 mo ago )
09 Oct 13 ( 3 mo ago )
09 Jan 13 ( 1 yr ago )
3 Month & 10 Yr Treasury Yields
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
0%
1%
2%
3%
4%
5%
6%
7% 10 Yr Treasury
3 Mo Treasury
Spread
US Inflation measures
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
−1%
0%
1%
2%
3%
4%
5%
6%
−1%
0%
1%
2%
3%
4%
5%
6%
US Inflation Rate YoY% (Nov = 1.2%)
US Inflation ex Food & Energy YoY% (Nov = 1.6%)
Delta of Treasury vs. TIPS (Jan = 2.3%)
The Laird Report Jan 11, 2014 Page 10
12. QE Taper Tracker
The US has been using the program of Quantitative Easing to pro-
vide monetary stimulous to its economy. The Fed has engaged in a
series of programs (QE1, QE2 & QE3) designed to drive down long
term rates and improve liquidity though purchases of treasuries, mor-
gage backed securites and other debt from banks.
The higher demand for long maturity securities would drive up their
price, but as these securities have a fixed coupon, their yield would be
decreased (yield ≈ coupon / price) thus driving down long term rates.
In 2011-2012, “Operation Twist” attempted to reduce rates without
increasing liquidity. They went back to QE in 2013.
The Fed chairman suggested in June 2013 the economy was recover-
ing enough that they could start slowing down purchases (“tapering”).
The Fed backed off after a brief market panic. The Fed announced in
Dec 2013 that it was starting the taper, a decision partly driven by
seeing key targets of inflation around 2% and unemployment being less
than 6.5%. These charts track that progress. Note - in the US Banking
charts, repos have spiked recently - not sure what that means.
QE Asset Purchases to Date (Treasury & Mortgage Backed Securities)
Trillions
0.01.02.0
0.01.02.0
QE1 QE2 Operation Twist QE3Treasuries
Mortgage Backed Securities
Total Monthly Asset Purchases (Treasury + Mortgage Backed Securities)
Billions
−1000100
−1000100
Month to date Jan 08: $−2.7
Inflation and Unemployment − Relative to Targets
Percent
02468
02468
Target Unemployment 6.5%
Target Inflation 2%
U.S. 10 Year and 3 Month Treasury Constant Maturity Yields
Percent
024
024
2008 2009 2010 2011 2012 2013
Short Term Rates:
Once at zero, Fed moved to QE
Long Term Rates:
Moving up in anticipation of Taper?
The Laird Report Jan 11, 2014 Page 12
13. Exchange Rates
10 Week Moving Average CAD Exchange Rates
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
0.620.710.810.901.001.09
USA/CAD
0.550.610.660.720.770.82
Euro/CAD
59.1674.7190.26105.81121.36136.91
Japan/CAD
0.380.440.490.550.610.67
U.K./CAD
0.590.981.361.742.122.51
Brazil/CAD
CAD Appreciating
CAD Depreciating
1 Month Change in Rates versus Average
−3.0%
−1.5%
1.5%
3.0%
Euro
−0.2%
UK
−0.5%
Japan
1.7%
South Korea
−0.5%
China
−0.9%
India
−0.6%
Brazil
1.8%
Mexico
−0.3%
Canada
−0.1%
USA
0.2%
% Change over 3 months vs. Canada
<−10.0% −8.0% −6.0% −4.0% −2.0% 0.0% 2.0% 4.0% 6.0% 8.0% >10.0%
CAD depreciatingCAD appreciating
ARG
−8.3%
AUS
−1.2%
BRA
−3.6%
CHN
5.2%
IND
4.1%
MEX
5.1%
RUS
1.8%
USA
4.5%
ZAF
−3.3%
EUR
5.4%
The Laird Report Jan 11, 2014 Page 13
14. US Banking Indicators
The banking and finance industry is a key indicator of the health
of the US economy. It provides crucial liquidity to the economy in the
form of credit, and the breakdown of that system is one of the exac-
erbating factors of the 2008 recession. Key figures to track are the
Net Interest Margins which determine profitability (ie. the difference
between what a bank pays to depositors versus what the bank is paid
by creditors), along with levels of non-performing loans (i.e. loan loss
reserves and actual deliquency rates).
US Banks Net Interest Margin
Percent
3.54.04.5
median: 3.95
2013 Q3: 3.20
Repos Outstanding with Fed. Reserve
BillionsofDollars
50150250
median: 42.08
Jan 2014: 150.73
Bank ROE − Assets between $300M−$1B
Percent
051015
median: 12.89
2013 Q3: 9.06
Consumer Credit Outstanding
%YearlyChange
−505101520
median: 7.10
Nov 2013: 5.57
Total Business Loans
%YearlyChange
−2001020 median: 7.81
Dec 2013: 6.56
US Nonperforming Loans
Percent
12345
median: 2.31
2013 Q3: 2.89
St. Louis Fed Financial Stress Index
Index
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
0246
median: −0.19
Jan 2014: −0.90
Commercial Paper Outstanding
TrillionsofDollars
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
1.01.41.82.2
median: 1.36
Jan 2014: 1.06
Residential Morgage Delinquency Rate
Percent
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
246810
median: 2.30
2013 Q3: 8.59
The Laird Report Jan 11, 2014 Page 14
15. US Employment Indicators
Unemployment Rate
Percent
45678910
median: 5.70
Dec 2013: 6.70
Ave. Duration of Unemployment
Weeks
152025303540
median: 17.35
Dec 2013: 37.10
Index: Employment, Hours
Index
−1.5−0.50.51.5
median: 0.00
Nov 2013: 0.28above ave growth
below ave growth
Total Nonfarm Hires
Rate
3.03.54.0
median: 3.60
Oct 2013: 3.30
Services: Temp Help
ThousandsofPersons
150020002500
median: 2219.50
Dec 2013: 2816.60
Employment Ratio
Percent
606570758085
All civilian
Bachelor Degree 25+
Aged 25−54
Some college 25+
(U6) Unemployed + PT + Marginally Attached
Percent
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
810121416
median: 9.60
Dec 2013: 13.10
4−week moving average of Initial Claims
Jan1995=100
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
50100150200
median: 108.84
Jan 2014: 107.30
Small, Med, Lrg Nonfarm Emp (ADP)
Jan2005=100
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
8090100110
Firm Size
1−49
50−499
500+
The Laird Report Jan 11, 2014 Page 15
16. US Business Activity Indicators
Business activity is split between manufacturing activity and non-
manufacturing activity. We are focusing on forward looking business
indicators like new order and inventory levels to give a sense of the
current business environment.
Manufacturing Sector: Real Output
YoYPercentChange
−15−5515
median: 6.61
2013 Q3: 8.54
ISM Manufacturing: PMI Composite Index
Index
3040506070
Dec 2013: 57.00
manufac. expanding
manufac. contracting
ISM Manufacturing: New Orders Index
Index
304050607080
Dec 2013: 64.20
Increase in new orders
Decrease in new orders
Non−Manufac. New Orders: Capital Goods
BillionsofDollars
35455565
median: 56.86
Nov 2013: 69.53
Average Weekly Hours: Manufacturing
Hours
3940414243
median: 41.10
Dec 2013: 42.10
Industrial Production: Manufacturing
YoYPercentChange
−15−50510
median: 3.28
Nov 2013: 3.05
Total Business: Inventories to Sales Ratio
Ratio
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
1.11.21.31.41.51.6
median: 1.38
Oct 2013: 1.29
Chicago Fed: Sales, Orders & Inventory
Index
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
−0.50.00.5
Nov 2013: 0.06Above ave growth
Below ave growth
ISM Non−Manufacturing Bus. Activity Index
Index
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
35455565
Dec 2013: 55.20
Growth
Contraction
The Laird Report Jan 11, 2014 Page 16
17. US Consumption Indicators
Variations in consumer activity are a leading indicator of the
strength of the economy. We track consumer sentiment (their expec-
tations about the future), consumer loan activity (indicator of new
purchase activity), and new orders and sales of consumer goods.
U. Michigan: Consumer Sentiment
Index1966Q1=100
5060708090110
median: 88.45
Dec 2013: 82.50
Consumer Loans (All banks)
YoY%Change
0102030
median: 7.16
Dec 2013: 2.36
Accounting
Change
Deliquency Rate on Consumer Loans
Percent
2.53.03.54.04.5
median: 3.49
2013 Q3: 2.40
New Orders: Durable Consumer Goods
YoY%Change
−30−101030
median: 3.83
Nov 2013: 16.53
New Orders: Non−durable Consumer Goods
YoY%Change
−2001020
median: 3.97
Nov 2013: 0.16
Personal Consumption & Housing Index
Index
−0.40.00.2
median: 0.02
Nov 2013: −0.12above ave growth
below ave growth
Light Cars and Trucks Sales
MillionsofUnits
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
10121416182022
median: 14.71
Dec 2013: 15.30
Personal Saving Rate
Percent
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
246810
median: 5.50
Nov 2013: 4.20
Real Retail and Food Services Sales
YoY%Change
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
−10−505
median: 2.50
Nov 2013: 3.03
The Laird Report Jan 11, 2014 Page 17
18. US Housing
Housing construction is only about 5-8% of the US economy, how-
ever a house is typically the largest asset owned by a household. Since
personal consumption is about 70% of the US economy and house val-
ues directly impact household wealth, housing is an important indicator
in the health of the overall economy. In particular, housing investment
was an important driver of the economy getting out of the last few
recessions (though not this one so far). Here we track housing prices
and especially indicators which show the current state of the housing
market.
20 City Housing Prices: 1991 − present
Atlanta
Boston
Charlotte
Chicago Cleveland
Dallas
Denver
Detroit
Las Vegas
Los Angeles
Miami
Minneapolis
New York
Phoenix
Portland
San Diego
San Francisco
Seattle
Tampa
WASHINGTON
Lowest value (1991−)
Highest value (1991−)
Current Value (Oct 2013)
Bubble Peak (Jan 2007)
New Housing Units Permits Authorized
MillionsofUnits
0.51.01.52.02.5
median: 1.36
Nov 2013: 1.02
New Home Median Sale Price
SalePrice$000's
100150200250
Nov 2013: 270.90
15 20 25 30 35
150200250300
Disposable Income Per Capita (000's)
NewHomePrice(000's)
(Real) Personal Income vs. Housing Prices
Nov 2013
r2
: 88.8%
Range: Jan 1963 − Nov 2013
New Homes: Median Months on the Market
Months
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
468101214
median: 5.00
Nov 2013: 3.10
US Monthly Supply of Homes
MonthsSupply
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
4681012
median: 6.00
Nov 2013: 4.30
The Laird Report Jan 11, 2014 Page 18
19. Global Business Indicators
Global PMI Reports
The Purchasing Managers’ Index (PMI) is an indicator reflecting
purchasing managers’ acquisition of goods and services. An index read-
ing of 50.0 means that business conditions are unchanged, a number
over 50.0 indicates an improvement while anything below 50.0 suggests
a decline. The further away from 50.0 the index is, the stronger the
change over the month. The chart at the bottom shows a moving av-
erage of a number of PMI’s, along with standard deviation bands to
show a global average.
Global PMI − December 2013
<40.0 42.0 44.0 46.0 48.0 50.0 52.0 54.0 56.0 58.0 >60.0
Steady ExpandingContracting
Eurozone
52.7
Global PMI
53.3
TWN
55.2MEX
52.6
KOR
50.8
JPN
55.2
VNM
51.8
IDN
50.9
ZAF
50.5
AUS
47.6
BRA
50.5
CAN
53.5
CHN
50.5
IND
50.7
RUS
48.8
SAU
58.7
USA
55.0
Global PMI Monthly Change
<−5.0 −4.0 −3.0 −2.0 −1.0 0.0 1.0 2.0 3.0 4.0 >5.0
PMI Change ImprovingDeteriorating
Eurozone
1.1
Global PMI
0.2
TWN
1.8MEX
0.7
KOR
0.4
JPN
0.1
VNM
1.5
IDN
0.6
ZAF
−1.1
AUS
−0.1
BRA
0.8
CAN
−1.8
CHN
−0.3
IND
−0.6
RUS
−0.6
SAU
1.6
USA
0.3
Purchase Managers Index (Manufacturing) − China, Japan, USA, Canada, France, Germany, Italy, UK, Australia
04
05
06
07
08
09
10
11
12
13
3040506070
3040506070
Business Conditions Contracting
Business Conditions Expanding
The Laird Report Jan 11, 2014 Page 19
20. Global Trade Indicators
The BDI is often described as a leading indicator of economic ac-
tivity; it’s offered as evidence that global manufacturers are re-stocking
on material inventories. However, the BDI is highly volatile, and de-
pendent on the available shipping capacity as well as demand. If there
are 50 ships and only enough bulk cargoes to fill 49 of them, shipping
rates can fall by 20%. If 51 cargoes are competing for the same ships,
rates can rise 20%. So a 4% change in demand can cause a 40% change
in shipping costs.
While the BDI measures bulk cargo transport - ore, crude oil, coal,
grain, etc. HARPEX measures container transport - electronics from
Taiwan, toys from China, textiles from Italy, etc. The HARPEX is a
good indicator of global consumer activity and in a high value-added
conversion economy like the US, it is a critical indicator.
Global Shipping Indices
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
2000600010000
BalticShippingIndex
400600800
HARPEXIndex
Shipping Demand Exceeds Supply
Shipping Supply Exceeds Demand
Germany − Exports
YoY%Change
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
−40−2002040
median: 7.49
2013 Q3: −1.10
South Korea − Exports
YoY%Change
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
−40−2002040
median: 16.77
2013 Q3: −0.34
Japan − Exports
YoY%Change
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
−40−2002040
median: 5.96
2013 Q3: 14.54
The Laird Report Jan 11, 2014 Page 20
23. Government Bond YieldsLongTermYields%
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
0246810
Economic Sentiment
Index
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
60708090110130
Consumer Confidence
Index
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
−100−60−20020
Production of Total Industry: Sep 2013
<−10.0%−7.5%−5.0%−2.5% 0.0% 2.5% 5.0% 7.5%>10.0%
YoY % Difference increasingdecreasing
AUT
0.10%
DEU
1.41%
ESP
0.52%
FIN
−3.81%
FRA
−0.91%
GBR
3.19%
GRC
−2.79%
HUN
2.94%
IRL
−7.54%
ITA
−1.08%
NOR
0.36%
POL
3.76%
RUS
−0.09%
SWE
−1.98%
Inflation: Nov 2013
AUT
1.4%
DEU
1.3%
ESP
0.2%
FIN
1.4%
FRA
0.7%
GBR
2.1%
GRC
−2.9%
HUN
1.0%
IRL
0.3%
ITA
0.7%
NOR
2.5%
POL
0.7%
SWE
0.1%
<−1.0%0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% >7.0%
YoY % Change in Prices
PMI: December 2013
<40.042.0 44.0 46.0 48.0 50.0 52.0 54.0 56.0 58.0>60.0
Steady ExpandingContracting
BRA
50.5
CAN
53.5
DEU
54.3
ESP
50.8
FRA
47.0
GBR
57.3
GRC
49.6
IRL
53.5
ITA
53.3
MEX
52.6
POL
53.2
SAU
58.7
TUR
53.5
USA
55.0
PMI Change: Nov − Dec
<−5.0−4.0 −3.0 −2.0 −1.0 0.0 1.0 2.0 3.0 4.0 >5.0
PMI Change ImprovingDeteriorating
CAN
−1.8
DEU
1.6
ESP
2.2
FRA
−1.4
GBR
−1.1
GRC
0.4
IRL
1.1
ITA
1.9
POL
−1.2
TUR
−1.5
USA
0.3
The Laird Report Jan 11, 2014 Page 23
24. Chinese Indicators
Tracking the Chinese economy is a tricky. As reported in the Finan-
cial Times, Premier Li Keqiang, confided to US officials in 2007 that
gross domestic product was “man made” and “for reference only”. In-
stead, he suggested that it was much more useful to focus on three alter-
native indicators: electricity consumption, rail cargo volumes and bank
lending (still tracking down that last one). We also include the PMI
- which is an official version put out by the Chinese government and
differs slightly from an HSBC version. Finally we include the Shanghai
Composite Index as a measure of stock performance.
Manufacturing PMI
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
4045505560
Dec 2013: 50.50
Shanghai Composite Index
IndexValue(MonthlyHigh/Low)
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
100020003000400050006000
Jan 2014: 2013.30
Electricity Usage
100MillionKWH(logscale)
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
1000200030005000
Nov 2013: 4392.00
Consumer Confidence Index
Index
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
98100102104106108
median: 102.90
Nov 2013: 98.90
Exports
YoYPercentChange
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
−20020406080
median: 20.30
Dec 2013: 4.30
Retail Sales Change
YoYPercentChange
99
00
01
02
03
04
05
06
07
08
09
10
11
12
13
14
101520
median: 13.20
Nov 2013: 13.70
The Laird Report Jan 11, 2014 Page 24
25. Global Climate Change
Temperature and precipitation data are taken from the US National
Climatic Data Center and presented as the average monthly anomaly
for the previous 6 months from November 2013. Anomalies are defined
as the difference from the average value over the period from 1961-1990
for precipitation and 1971-2000 for temperature.
Trailing 6 month Temperature Anomalies from November 2013
<−4.0 −3.0 −2.0 −1.0 0.0 1.0 2.0 3.0 >4.0
Anomalies in Celcius WarmerCooler Anomalies in Celcius
−4 −2 0 2 4
Trailing 6 month Precipitation Anomalies from November 2013
<−40.0 −30.0 −20.0 −10.0 0.0 10.0 20.0 30.0 >40.0
Anomalies in millimeters WetterDrier Anomalies in millimeters
−40 −20 0 20 40
The Laird Report Jan 11, 2014 Page 25