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us-economy-exposed-government-spending-reform

Tweet Peeks at 1Q2014 GDP for Week Ending 04-11-2014

@KeithEOuellette:

We are close to calling the current cycle a Secular Bull since the low in Mar’2009. It needs to break Year 2000 high. http://t.co/YZ8BqgQ1d4
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ADP Jobs Report shows 191k net jobs created in Feb’2014. This was consistent with consensus. .weather effect negated? http://t.co/5VUiSd9W5i
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The drama continues in the stock markets, stopping the 3-day sell off in its tracks. Will we see a 10% correction? http://t.co/wbADcJADgY
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Philly Fed’s Leading Index falls again, but still above 1% indicating no recession in sight for at least 6 months. http://t.co/rP00xFhnaL
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Big 4 Leading Economic Index has reversed its negative trend. Will the current Business Cycle continue its growth? http://t.co/DcG32iqcyM
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Labor Force Participation Rate is still contracting for those Aged 25 to 64. Growth in jobs is for Age 65 & older. http://t.co/GqLJe9MxV7
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Stock market sell-off continues. Interested to see whether yesterday’s 10% drop in jobless claims will prompt buying. http://t.co/YkubUa1p1P
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New Jobless Claims plunged 10%, which was more than expected. Will the unemployment rate restart its trend down? http://t.co/DjhFrxeSqv
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Vrba’s forecast to the next recession is now 40 months out! It’s unlikely the US Economy can sustain growth 3+ years. http://t.co/J3eaHbWNTn
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Stock Market Correction or Crash!

image1 300x225 Stock Market Correction or Crash!

The US Economy and Its Good Ride on the Bull

Unknown to many, April marks the seasonal point for falling stock market prices. Where this date comes from, I do not know, but what I do know is this . . . The stock market is overvalued. Look at this chart for illustration of the current bull run.

CrestmontResearch.com is a great resource for stock market analysis. There are many sites that provide the same type of graphs, but their analytics are second to none.

If you want to learn about macroeconomic trend analysis, then this site is a great resource for education about P/E ratios, the Stock Market, Interest Rates, Secular Bull & Bear Markets and the overall economy. Now, let’s get back to the stock market trends.

We have been in a Secular Bear market for 14 years. The average time in either market is about 18 years with a few exceptions since World War II. The question is when will the current Secular Bear end, or has it already ended?

Based on recent history, the current cycle could go on another 4 years. Since we are near the top of the current business cycle and P/E values are historically high, I expect the current stock market correction will continue through the seasonal adjustment period. The following is Doug Short’s analysis of the current week’s S&P 500 performance:

image3 300x218 Stock Market Correction or Crash!

S&P500 Percent Off High Since March 2009

We are sitting at just under a 3% correction over the last week and 4% off the March 2009 high. Will the stock markets rebound and resume growth, or will we slide into a double digit correction? Only time will tell, but it will be sooner than the “Bulls” think. The only good thing in my mind is that economic indicators appear to be turning more positive than negative after the Weather-Effect slowdown in the 1Q2014.

Both Consumer Sentiment and Small Business Optimism increased in the latest polls. Employment, Personal Income and the Labor Participation Rate notched up a bit in March. And, Manufacturing activity continues on its slow growth trend.

Residential Construction Starts and Residential Sales for March come out over the next 2 weeks. I expect a rebound over the February numbers. Will it be enough to fend off a double-digit correction? Unfortunately, it appears that the stars and moon are in line for a continued downturn.

A Total Lunar Eclipse will occur on April 15, 2014, the deadline for filing US individual tax returns. For some, a Blood Red Moon means the beginning of the end. For others, like me, it means people doing unusual and irrational things during a full moon.

I believe the stock market correction will continue its downward trend this week, but for a different reason . . . Institutional Investors are just taking some of their profits out of the market for later investment. Let’s hope that the influence of the moon and stars do not create negative and emotional world events that may impact stock market this week.

All I know for sure is that it is time for a major correction, but not a crash. However, there is a lot of hedging moves going on at this time. Of course, now is the time to protect or take some profits. Unfortunately, the crowd is fickle and may eventually prove me wrong. So be it!

us-economy-exposed-government-spending-reform

Tweet Peeks at 1Q2014 GDP for W/E 03/05/2014

@KeithEOuellette:

Final Change in 4Q2013 GDP came in at 2.6% growth with Consumer Consumption contributing 2.2% due to Holiday Season. http://t.co/r7c1bDIAl6
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Is it time to take stock of your portfolio? Twitter Sentiment is trending down as the S&P 500 moves sideways! http://t.co/gAwNtFAKMl
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Another interpretation on the Stock Market bubble reveals that the contraction is imminent, but when? Mid-2014? http://t.co/UaJpzvkj5Z
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The Best Economic Indicator Ever has broken support and is trending down. It is time to take some profits now! http://t.co/wQVhPpD23m
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Yellen’s current take on US Economy & Labor Market conditions. Full employment and inflation control are Feds’ goals. http://t.co/hLNvQ4ZgFf
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Fed Policy is arbitrarily keeping stock prices high. Question is not whether a free fall will take place, but when? http://t.co/CSHPyYZ3JM
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New Record Highs for the Dow and S&P 500 stock indexes. Can it continue its upward momentum, or are we in for a fall? http://t.co/jOPF43JCxn
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Real Median Household Income rises in Feb, but still remain below pre-recessionary levels. Labor markets remain same. http://t.co/gR9HJRLpSq
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Texas Manufacturing Survey Index continues in growth territory for March; Only 1of 5 Fed Districts is contracting. http://t.co/JY4UFLxJug
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Current Economic Indicators – 1Q2014 Update http://t.co/oIuTCxsuRR
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Current Economic Indicators – 1Q2014 Update

image 300x225 Current Economic Indicators   1Q2014 Update

Where is the a Economy Headed? Consumption & Investment Make Up 85% of GDP

Take a look at current trends in Consumption and Private Investment . . . accounting for 85% of GDP!

After a robust 4Q2013 growth spurt of 3.2%, Consumption has slipped into a cautionary mode, thanks to most of disposable income going to pay off consumer debt incurred during the Holiday Season. Major Winter Storms will also slow down consumer spending in 1Q2014.

Quarterly Profits for Retailers are mixed over the last 3-months, as well as Retail Sales. Both Small Business Optimism and Consumer Sentiment have waned since the holidays. This is advanced indication about future spending trends.

Private Investment trends are split 50/50 with Residential Construction and Sales are in a downturn due to the Winter season. The key to this Quarter will be the Merchant Wholesale Sales numbers for Feb’14, which comes out next week. If the February numbers contract from January numbers, then I would change the trend from Green to Yellow, or cautionary. This will not fare well for 1Q2014 GDP.

However, we need to also take a look at the Income and Labor Market to determine whether more disposable income and jobs are available to drive consumer spending. The following economic indicators illustrate the current trends:

image2 300x225 Current Economic Indicators   1Q2014 Update

Personal Income and Labor Trends

New jobs created in January and February were not enough to reduce the unemployment rate. In fact, it notched up to 6.7%, which is a lagging indicator and is the reason why the UE Rate remained the same in March. What is encouraging about the March numbers is that 191,000 new jobs were created; more than enough to reduce future unemployment. Also encouraging is the Personal Income trend during a long winter season and the Homeownership rate, which appears to have stopped its downward spiral.

The good news is that both Consumption and Investment should improve in March. The question is “will it be enough to sustain 1Q2014 GDP at or above 3% growth?”

us-economy-exposed-government-spending-reform

Tweet Peeks at 1Q2014 Change in GDP for W/E 03-28-2014

@KeithEOuellette:

Median Household Income is again unchanged. Until household income rises, Consumer Spending will remain in check. http://t.co/Ftzf96Pt47
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Conference Board’s Leading Economic Index continues its slow growth path, indicating no recession in next 6-months. http://t.co/dQLLzOj1Sh
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Estimated Vehicle Miles Driven has fallen again but remains flatlined based on 12-month moving average since 2009. http://t.co/7KNdlua0Gn
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The 2nd Bubble in the Residential Housing Market will burst as mortgage interest rates rise. The question is when? http://t.co/H11PGCIZ9D
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Conference Board’s Consumer Confidence Index bounces back from last month’s fall to new post-recession high at 82.3 http://t.co/4OzWyHxPsN
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After seeing Retail Sales increase 0.2%, the Big 4 Economic Indicators Average will buck the negative 2-month trend. http://t.co/76asECbOXY
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NFIB’s Small Business Confidence Index falls in Feb’14 to 91.4 still running laterally across the 90 line since 2010. http://t.co/6en1og4c3d
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Real Disposable Income per Capita increases, albeit slightly, but Feb YOY increase is just 1.39% on a real basis. http://t.co/6gZ6tLZWqH
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US Economic Report Card – 3Q2013 vs. 4Q2013 GDP http://t.co/0VZISBZ8Ud
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