We just finished our weekly scoring of the PWA Macro Index and would like to show clients what we’re seeing; which in the aggregate illustrates why, for the time being, we remain cautious.
Click each insert to enlarge….
First, here’s the graph of our index itself since inception:
And here’s a look at back-tests (scores plotted along the S&P 500 Index) at key points from 1997 to current. Red shaded areas denote past recessions:
The following includes charts for the lion’s share of the data we formally track each week (believe it or not there’s a ton more that we track “less formally”).
RETAIL SALES
AUTO SALES
CONSUMER SPENDING
PERSONAL INCOME
HOUSEHOLD NET WORTH
CONSUMER DEBT
CONSUMER DEBT SERVICE RATIO
WEEKLY MORTGAGE APPS
HOUSING STARTS
HOUSING PERMITS
CONSUMER CONFIDENCE
HOMEBUILDER CONFIDENCE
WEEKLY JOBLESS CLAIMS
MONTHLY JOBS DATA
INSTITUTE FOR SUPPLY MANAGEMENT SURVEYS
SERVICES, MANUFACTURING
SMALL BUSINESS OPTIMISM
SMALL BUSINESS HIRING PLANS
SMALL BUSINESS CAPITAL EXPENDITURES PLANS
INDUSTRIAL PRODUCTION
DURABLE GOODS ORDERS/DURABLE GOODS ORDERS EX-TRANSPORTATION
CAPITAL INVESTMENT
CORPORATE FINANCING GAP
COMMERCIAL AND INDUSTRIAL LOANS
COMMERCIAL PAPER ISSUANCE/COMMERCIAL PAPER RATES
TRUCK TONNAGE
RAIL TRAFFIC
CASS FREIGHT SHIPMENTS AND EXPENDITURES
CHEMICAL ACTIVITY INDEX
CATERPILLAR GLOBAL SALES
GLOBAL PURCHASING MANAGERS INDEX
ATLANTA FED GDP NOW
LEADING INDICATORS/COINCIDENT INDICATORS RATIO
CHICAGO FED NAT’L ACTIVITY INDEX
ECONOMIC SURPRISE INDEX: U.S., EZ, JAPAN, CHINA, EM
GENERAL INFLATION DATA
NY FED UNDERLYING INFLATION INDEX
CAPACITY UTILIZATION (INFLATION IMPLICATIONS)
INFLATION BREAK EVENS
BLOOMBERG COMMODITY INDEX
INDUSTRIAL MATERIALS PRICES
COPPER PRICE
BALTIC DRY INDEX
2-YR TREASURY/FED FUNDS SPREAD
TED SPREAD
TREASURY YIELD CURVES
SWAP SPREAD
HIGH YIELD CREDIT SPREAD
CHICAGO FED FINANCIAL CONDITIONS INDEX
ST. LOUIS FED FINANCIAL STRESS INDEX
KC FED FINANCIAL STRESS INDEX
ML GLOBAL FINANCIAL STRESS INDEX
GLOBAL CDS SPREADS
AAII INDIVIDUAL INVESTOR SENTIMENT (CONTRARIAN INDICATOR)
ADVISER SENTIMENT NOW (CONTRARIAN INDICATOR)
INSTITUTIONAL ANALYSTS’ GLOBAL SENTIMENT
SHORT INTEREST (COMPLACENT)
STOCKS/BONDS COMMITMENT OF TRADERS REPORTS (STOCKS COMPLACENT)
SKEW INDEX (COMPLACENT)
VIX CURVE (WIDENING 1-2/3 MONTH SPREAD)
PUT/CALL RATIO
SECTOR/SPX RATIOS
SPX/BONDS RATIO
STAPLES/DISCRETIONARY RATIO
MONEY FUND ASSETS
INTEREST RATE SENSITIVITY
VALUATION US/FOREIGN
S&P 500/S&P 500 EQUAL WEIGHT COMPARISON
S&P 500 ADVANCE/DECLINE LINE
% OF STOCKS TRADING ABOVE 50-DAY MOVING AVERAGE
% OF STOCKS TRADING ABOVE 200-DAY MOVING AVERAGE
Bottom Line: The consumer’s hanging in there, business data are suspect, inflation is tame, commodities look scary, financial stress in the system is on balance rising, and financial markets are sending very mixed signals. I.e., conditions may not yet be stormy, but clouds are definitely forming…
Have a great weekend!
Marty