the report - home | stock market direction … · economic news snippets: 26 macro-economic...
TRANSCRIPT
THE REPORT
December 2017
Chris Angle
Stock-Market-Direction.net
a
RITE Report Chris Angle, Editor
222 Boston Post Road, #244
Waterford, CT 06385
Tel. 203/253-2008
Email: [email protected]
http://www.stock-market-direction.net/
Custom Research: Please note that custom economic and/or macro
investment research and wealth advisory services are
available on request.
The RITE Report
The following RITE Report generates indices from the monthly compilation of business,
economic, & political news snippets from the Wall Street Journal, IBD, U.S.
Government, and other sources.
CO
NT
EN
TS
PART 1 - STOCKS
1. Macro-Economic Snippets w/Index
2. Indicators for Technical Analysis
3. Overall Investment Strategy Index
4. Summary
PART 2 – HEDGING
1. Hedging and Inflation Snippets
2. Hedging Summary
11/02
BLS: In manufacturing, productivity decreased 5.0 percent and
unit labor costs increased 6.2 percent.
11/03
IBD: The unemployment decline reflected a big tumble in the
labor force participation rate, to 62.7% from 63.1%.
IBD: Average hourly wages dipped one cent on the month,
rising just 2.4% from a year ago.
11/04
IBD: There's About 0% Chance of A Permanent 20%
Corporate Tax Rate
11/14
WSJ: China’s Indicators Point to Slowing Economy - Growth
in factory output, fixed-asset investment and retail sales all
decelerated in October
WSJ: Demand for Construction Workers Soft, Even After
Hurricanes - Number of construction-job openings in
September down from August, in line with recent average.
11/15
BLS: Real average hourly earnings decreased 0.1 percent in
October, seasonally adjusted. Average hourly earnings were
unchanged, and CPI-U increased 0.1 percent. Real average
weekly earnings decreased 0.1 percent over the month.
11/22
US CENSUS: Advance Report on Durable Goods
Manufacturers' Shipments, Inventories, and Orders - New
orders for manufactured durable goods in October decreased
$2.8 billion or 1.2 percent to $236.0 billion.
11/23
CPB: The CPB World Trade Monitor shows that the volume of
world trade was stagnant in September, having increased 0.7%
in August (initial estimate: 1.2%).
12/04
U.S. CENSUS: Manufacturers' Shipments, Inventories, and
Orders - New orders for manufactured goods in October
decreased $0.3 billion or 0.1 percent to $479.6 billion.
12/05
US CENSUS: Quarterly Financial Report - Retail Trade -
Seasonally adjusted after-tax profits for retail corporations with
assets of $50 million and over were $20.3 billion for the third
quarter 2017 (the 3 months ending October 31, 2017), down
$1.7 (+/- 0.0) billion from second quarter 2017 (the 3 months
ending July 31, 2017).
BLS: Productivity increased 3.0 percent in the nonfarm
business sector in the third quarter of 2017; unit labor costs
declined 0.2 percent (seasonally adjusted annual rates).
Total of Negative General Business
and Economic News Snippets: 12
T h e R I T E R e p o r t
MACRO-ECONOMIC SNIPPETS
A) Negative Economic and General Business
Data Snippets
PA
RT
1 –
ST
OC
KS
11/01
U.S. CENSUS: Total construction activity for September
2017 ($1,219.5 billion) was 0.3 percent (+/-1.3 percent)*
above the revised August 2017 ($1,216.0 billion).
11/02
U.S. CENSUS: Total construction activity for September
2017 ($1,219.5 billion) was 0.3 percent (+/-1.3 percent)*
above the revised August 2017 ($1,216.0 billion).
BLS: Productivity increased 3.0 percent in the nonfarm
business sector in the third quarter of 2017; unit labor costs
increased 0.5 percent (seasonally adjusted annual rates).
11/03
BLS: Total nonfarm payroll employment rose by 261,000 in
October, and the unemployment rate edged down to 4.1
percent. Employment increased in food services and drinking
places, professional and business services, manufacturing, and
health care.
U.S. CENSUS: Manufacturers' Shipments, Inventories, and
Orders - New orders for manufactured goods in September
increased $6.5 billion or 1.4 percent to $478.5 billion.
11/07
IBD: The IBD/TIPP Economic Optimism Index rose 6.6% in
November to 53.6
11/14
WSJ: U.S. Manufacturing Picks Up Pace While Waiting for
Donald Trump’s Policy Promises - Makers of everything from
bulldozers to food products are on an upswing as production,
spending and sentiment improve.
WSJ: Steven Mnuchin Says Trump Won’t Bend on Corporate
Tax Rate of 20%
WSJ: German, Italian Growth Add Fuel to Eurozone Recovery -
German GDP grew 3.3% in the third quarter in annualized
terms, beating estimates.
WSJ: Japan Extends Growth Streak to Seven Consecutive
Quarters
11/15
U.S. CENSUS: Advance Monthly Sales for Retail and Food
Services - U.S. retail and food services sales for October were
$486.6 billion, an increase of 0.2 percent (+/-0.5%)* from the
previous month.
11/17
U.S. CENSUS: New Residential Construction - Privately-
owned housing starts in October 2017 were at a seasonally
adjusted annual rate of 1,290,000. This is 13.7 percent (+/-
10.5%) above the revised September 2017 estimate of
1,135,000.
U.S. CENSUS: Advance Report: Quarterly Services Survey
The estimate of U.S. selected services total revenue for the third
quarter of 2017, not adjusted for seasonal variation or price
changes, was $3,720.3 billion, an increase of 1.2 percent (+/-
0.4 percent) from the second quarter of 2017 and up 5.3 percent
(+/- 3.2 percent) from the third quarter of 2016. The first quarter
of 2017 to second quarter of 2017 percentage change was
revised from the preliminary estimate of 3.2 percent (+/- 0.6
percent) to 3.0 percent (+/- 0.4 percent).
11/21
IBD: Sales of previously owned U.S. homes rose to a four-
month high, indicating demand was firming at the start of the
quarter as the impact from hurricanes faded, according to a
National Association of Realtors report released Tuesday.
T h e R I T E R e p o r t
PA
RT
1 –
ST
OC
KS
B) Positive Economic and General Business News
Snippets
T h e R I T E R e p o r t
IBD: Existing-Home Sales Highlights: Contract closings rose
2% m/m to a 5.48 million annual rate (est. 5.4 million). Median
sales price increased 5.5% vs. a year earlier to $247,000.
Inventory of available properties fell 10.4% vs. a year earlier to
1.8 million, the lowest level for October since data began in
1999.
11/22
WSJ: U.S. Consumer Sentiment Pulled Back in November -
The University of Michigan’s consumer-sentiment index was
98.5 in November, up from a preliminary reading of 97.8 but
down from 100.7 in October - A measure of U.S. consumer
sentiment pulled back in November from a 13-year high,
signaling solid economic optimism headed into the holiday
shopping season.
11/29
BEA: Real gross domestic product (GDP) increased at an
annual rate of 3.3 percent in the third quarter of 2017, according
to the "second" estimate released by the Bureau of Economic
Analysis. In the second quarter, real GDP increased 3.1
percent.
BEA: Profits from current production (corporate profits with
inventory valuation adjustment and capital consumption
adjustment) increased $91.6 billion in the third quarter,
compared with an increase of $14.4 billion in the second
quarter.
11/30
BEA: Personal income increased $65.1 billion (0.4 percent) in
October according to estimates released today by the Bureau of
Economic Analysis. Disposable personal income (DPI)
increased $66.1 billion (0.5 percent) and personal consumption
expenditures (PCE) increased $34.4 billion (0.3 percent).
FRED: Velocity of M2 Money Stock (M2V) Q3 2017: 1.428
(up from 1.425)
12/01
U.S. CENSUS: Construction Spending - Total construction
activity for October 2017 ($1,241.5 billion) was 1.4 percent (+/-
1.5 percent)* above the revised September 2017 ($1,224.6
billion).
12/05
U.S. CENSUS: Quarterly Financial Report - Manufacturing,
Mining, Wholesale Trade, and Selected Service Industries -
Manufacturing corporations' seasonally adjusted after-tax
profits were $147.4 billion for the third quarter of 2017, up $3.7
(+/- 0.3) billion from second quarter of 2017.
12/06 BLS: In manufacturing, productivity decreased 4.4 percent and
unit labor costs increased 4.8 percent.
12/07 U.S. CENSUS: The estimate of U.S. selected services total
revenue for the third quarter of 2017, not adjusted for seasonal
variation or price changes, was $3,717.6 billion, an increase of
1.1 percent (+/- 0.2 percent) from the second quarter of 2017
and up 5.2 percent (+/- 3.2 percent) from the third quarter of
2016. The second quarter of 2017 to third quarter of 2017
percentage change was revised from the advance estimate of 1.2
percent (+/- 0.4 percent).
12/08 U.S. CENSUS: October 2017 sales of merchant wholesalers
were $484.6 billion, up 0.7 percent (+/- 0.5 percent) from last
month. End-of-month inventories were $605.3 billion, down 0.5
percent (+/- 0.4 percent) from last month.
BLS: Payroll employment increases by 228,000 in November;
unemployment rate unchanged at 4.1%
PA
RT
1 –
ST
OC
KS
T h e R I T E R e p o r t
Total of Positive General Business and
Economic News Snippets: 26
MACRO-ECONOMIC SNIPPETS
0
20
40
60
80
100
120
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2016 2017
Table of Positive v. Negative General Economic & Business News
% Neg
% Pos
T h e R I T E R e p o r t
PA
RT
1 –
ST
OC
KS
v
Indicator Trend/Comment
(DAILY) - HIGH YIELD BONDS (HYG)
Downticked (11/06 - 87.99; 12/08 - 87.35) Negative
(DAILY) - iSHARES SELECT DIVIDEND (DVY)
Up (11/06 - 94.76; 12/08 - 99.04) Positive
12/01 - PURCHASING MANAGERS INDEX
Mfg still Expanding: 58.2 (although rate decreased from 58.7) Positive
12/01 - CONSTRUCTION SPENDING (Census Bureau) Up 1.4% month to month Positive
Year over year + 2.9% Positive
Combined: Positive
12/04 - MANUFACTURERS’ SHIPMENTS, INVENTORIES, & ORDERS (Census Bureau):
New orders for manufactured goods in October decreased $0.3
billion or 0.1 percent to $479.6 billion. Negative
ECONOMIC ANALYSIS/INDICATOR SUMMARY
Indicator Trend/Comment
12/05 - (BLS) UNEMPLOYMENT
- Unemployment Rate (BLS): Downtick at 4.1%: (Positive)
- Civilian Labor Force Participation Rate (BLS): 62.7 (Neutral)
- Employment-Population Ratio (BLS): Downtick 60.2% - 60.1% (Negative)
- 12/11 Employment Trends Index (Conference Board TM) Decreased (Negative)
Overall: Negative
12/06 - (BLS) PRODUCTIVITY:
Nonfarm Business Sector Neutral
- Productivity increased 3.0% percent; Positive
- Output + 4.1% Positive
Manufacturing
- Productivity decreased - 4.4% Negative
- Output: -1.1% Negative
12/05 - QUARTERLY FINANCIAL REPORT - MFG, MINING, WHOLESALE,
SERVICE (Census Bureau)
- Manufacturing corporations' seasonally adjusted after-tax profits were
$147.4 billion for the third quarter of 2017, up $3.7 (+/- 0.3) billion from
second quarter of 2017. Positive
11/13 - RETAIL SALES (U.S. Census) +0.2% from previous month: Positive
11/15 - MANUFACTURING AND TRADE INVENTORIES AND SALES (Census Bureau):
U.S. total business sales were $1,389.7 billion, up 1.4 percent (+/- 0.2 percent)
from last month. + 1.4%: Positive
11/16 - INDUSTRIAL PRODUCTION INDEX (INDPRO) - Positive
Uptick: 106.1469 Positive
(Year over Year) Positive
T h e R I T E R e p o r t
Indicator Trend/Comment
11/17 - NEW RESIDENTIAL CONSTRUCTION (U.S. Census): Neutral
(month over month) + 13.7% Positive
(yr over yr) - 2.9% Negative
11/20 - CONFERENCE BOARD LEADING ECONOMIC INDICATORS ™ Increased: Positive
11/20 - CONFERENCE BOARD COINCIDENT ECONOMIC
INDICATORS ™ Increased: Positive
11/27 - NEW RESIDENTIAL SALES (U.S. Census Bureau) +6.2%
(Overall in uptrend) Positive
11/22 - Advance Report on Durable Goods Manufacturers' Shipments, Inventories,
and Orders (U.S. Census Bureau) 1.2% Negative
11/21 - EXISTING HOME SALES (NAR) + 2.0%: Positive
11/29 - REAL GDP (BEA) + 3.3%: Positive
11/30 - PERSONAL CONSUMPTION EXPENDITURES
(Dept of Commerce - BEA) + 0.3%: Positive
11/30 - PERSONAL INCOME (Dept of Commerce - BEA) + 0.4%: Positive
11/28 - CONSUMER CONFIDENCE INDEX (Confidence Board TM
) Increased: Positive
11/30 - RESTAURANT PERFORMANCE INDEX: 100.9 - Expanding: Positive
11/29 - Corporate Profits BEA Profits from current production (corporate profits with inventory
valuation adjustment and capital consumption adjustment) increased $91.6 billion in the
third quarter, compared with an increase of $14.4 billion in the second quarter. Positive
T h e R I T E R e p o r t
T h e R I T E R e p o r t
Summary
Positive 17
Negative 4
Neutral 2
Scale:
0 = Neutral
+10 = High Opportunity Environment
-10 = Extreme Negative Risk Miasma
Effort, Risk, Freedom, Knowledge / Info Comments
1) Domestic Political Risk + 7 Good: A tax reduction package will pass
2) Tax Risk + 6 Taxes to go down but when is not clear
3) Individual Incentive (Freedom) + 8 Regulations are decreasing
4) Production of Knowledge + 6 Economy positive
5)Technical Analysis of the U.S. Stock Markets + 8 Market: Bullish
6) General Business & Economic Snippets + 7 Positive Snippets 84% down to 65%
7) Economic Indicators + 7 Slight Decrease: From 17/3/2 to
16 Pos; 4 Neg; 2 Neu
Sum of Total 49
Average of Total +7
RITE Strategy Index 85.0%
History of Strategy Index (Started 2009) Statistics noted before are approximate.
RITE INVESTMENT STRATEGY INDEX
T h e R I T E R e p o r t
0
5000
10000
15000
20000
25000
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
2016 2017
History of Strategy Index (Started 2009) Statistics noted before are approximate.
Index % DJIA Gold Oil WSJ Dollar Index
Summary
Equity Market Conclusion:
Stocks: Stay Long
The RITE Index remains high.
T h e R I T E R e p o r t P
AR
T 1
– S
TO
CK
S
RITE INVESTMENT STRATEGY INDEX
PA
RT
2 –
HE
AD
ING
S
HEDGING/INFLATION SNIPPETS T h e R I T E R e p o r t
Deflation Snippets 0/0%
None this month
Inflation Snippets 2/100%
11/14 BLS: The Producer Price Index for final demand
increased 0.4 percent in October, as prices for final
demand services rose 0.5 percent and the index for
final demand goods advanced 0.3 percent. The
final demand index increased 2.8 percent for the 12
months ended in October.
11/15
BLS: In October, the Consumer Price Index for All
Urban Consumers increased 0.1 percent seasonally
adjusted; rising 2.0 percent over the last 12
months, not seasonally adjusted. The index for all
items less food and energy rose 0.2 percent in
October (SA); up 1.8 percent over the year (NSA)
Inflation Table
(The RITE Report Issue Date is the first week of the month; Statistical Data is the latest closing price which is
noted in the WSJ on the close of the last day of the month, but the RITE Report does not represent that these
data are accurate.)
Month Inflatondata.com CRB
Annual Inflation Rate
2016
Sept 02 0.84% 179.99
Sept 30 1.06% 186.32
Nov 02 1.46% 184.29
Dec 01 1.64% 191.41
Dec 31 1.69% 192.512
2017
Feb 09 2.07% 192.756
Mar 01 2.50% 190.81
April 04 2.74% 185.59
May 2.38% 176.96
June 2.20% 176.30
June 30 1.87% 174.776
July 31 1.63 180.68
Sept 4 1.73% 180.95
October 6 1.94% 180.95
Nov 6 2.23% 192.57
Nov 15 .04%
PA
RT
1 –
HE
AD
ING
S
T h e R I T E R e p o r t
Inflation remains subdued
Gold: No call
Oil: No call
The U.S. Dollar: Stay Long (Economy to go up)
For your reference, we include a directory of:
The RITE Report Major Trade Advice Summary
Date Approx. Market Advice
Mrkt Level
2011
2011/04/01 12,376 Stocks Market to go sideways; end of bull.
2011/05/01 12,763 Stocks Take profits 55.4% Gain
2011/06/01 102.7 Oil Go Neutral 100.9% Gain
2011/06/01 12,441 Stocks Take profits (re-confirmation)
2011/07/01 USD Go short
2011/08/01 USD Cover the short; no direction
2011/08/01 12,240 Stocks Trading Range
2012
2012/03/01 107 Oil Go long
2012/05/01 104 Oil Go neutral 2.8% Loss
2012/06/01 12,772 Stocks Take profits; a downtrend started
2012/06/01 1,564 Gold Sell: Take profits 74.7% Gain
2012/07/01 1,604 Gold Buy: Go long
2012/08/01 13,090 Stocks Advised not to be in the Stock Market at all
2012/09/01 80.025 USD Go short
2012/11/01 13,096 Stocks Confirmation: Not to be in Stock Market
T h e R I T E R e p o r t
HEDGING SUMMARY P
AR
T 1
– H
EA
DIN
GS
Date Approx. Market Advice
Mrkt Level
2013
2013/01/02 13,104.30 Stocks Go Long
2013/03/01 82.47 USD Index Take loss; go neutral
2013/05/31 15,115.57 Stocks - Take profits 15.3% Profit
2013/08/01 15,499.54 Stocks Go Long
2013/12/01 92.78 Oil Go Short
2014
2014/01/02 98.70 Oil Take off short: Go Neutral 6.38% Loss
2014/02/28 16,321.71 Stocks Take profit; go to cash 5.0% Increase
2014/03/01 16,532.61 Stocks Go long (Unrealized gain potential)
2014/10/31 1,173.5 Gold Sell (1,604 to 1,173.5 loss of 430.5) 36.8% loss
2015/01/30 1,283.0 Gold Go long
2016/04/04 35.32 Oil Go long
2016/07/01 49.05 Oil Take Profit - 38% Gain
2016/12/02 1,176.3 Gold Sell - Loss 8.3%
2016/12/02. 91.50 WSJ Dollar Index Go Long
Presently 2017/12/11 Last Seen - Mid-day
Stocks (DJIA) 24,358.26 Stay Long (Unrealized gain potential)
Gold 1,248.2 No call
US Dollar 87.18 Stay Long (Unrealized loss potential)
Oil 57.94 No Call
T h e R I T E R e p o r t
Please note that custom economic and/or macro investment research and advisory services are available on request.
RITE Report
222 Boston Post Rd., #244
Waterford, CT 06385
Tel. 203/253-2008
Email: [email protected]
http://www.stock-market-direction.net/
(The RITE Report's name was derived from the acronym of the four variables
inherent in all economic transactions; Risk, Information/Knowledge, Time, and
Effort. Of course, this would be for a service, and if the product were a material
good, there would be an additional factor of Material - or Land as the economist
would say. See The Philosophical Equations of Economics at
www.philosophypublishing.com for further info on this subject.)
PA
RT
1 –
HE
AD
ING
S
CUSTOM RESEARCH T h e R I T E R e p o r t
For Your Reference
Chris Angle is the author of:
These books may be viewed at: http://www.philosophypublishing.com
Chris Angle is also the host of The Philosophical Angle, a TV and Podcast Program, which discusses concepts in current media.
http://www.youtube.com/user/philosophypublishing
The Nature of Aesthetics
978-0-9661126-4-1
Defining Ethics
Good & Evil
978-0-9661126-5-8
Truth and the Nature of Decisions
978-0-9661126-6-5
The Philosophical Equations of
Economics
978-0-9661126-3-4
T h e R I T E R e p o r t
Disclaimers/Caveats
1. Past Performance is not indicative of future results.
2. Trading stocks, futures, and options involves substantial risk of loss and is not suitable for all investors. Carefully consi der the suitability based upon your experience, objectives, financial resources and other relevant circumstances. Alternative investment products, including hedge funds and managed futures, involve a high degree of risk. Alternative investment performance can be volatile and are not suitable for all investors. An investor could lose all or a substantial amount of his or her investment.
3. This communication does not constitute an offer to sell, or a solicitation of an offer to buy or sell, any products named her ein, commodities interests, futures
contracts, or securities, and is intended for informational purposes only. Any offer for any investment product will be made solely by the appropriate disclosure document or private placement memorandum.
4. The RITE Report has been prepared either from publicly available information or reflects the opinions of the author. Information contained in this report is believed to be reliable but may not have been independently verified. The RITE Report does not guarantee, represent or warran t, or accept any responsibility or liability as to, the accuracy, completeness or appropriateness of the information contained herein. At no time will the RITE Repo rt make specific recommendations for any specific person, and at no time may a reader, caller or viewer be justified in inferring that any such advice is intended. Information contained herein may not be current due to, among other things, changes in the financial markets or economic environment. Opinions reflected in the mater ials are subject to change without notice. Forecasts represent estimates. Information provided by the RITE Report is expressed in good faith, but it is not guaranteed. Long-term success, trading or investing in the markets, demands recognition of the fact that error and uncertainty are part of any forecasting effort. Investing carries risk of losses. Information provided by the RITE Report does not constitute, and should not be used as a substitute for tax, legal, or investment advice. Please ask your brok er or your advisor to explain all risks before making any trading and investing decisions.
5. Commodity Futures Trading Commission: Futures, Options and foreign currency trading have large potential rewards, but also large potential risk. You must be aware of
the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profit s or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.
CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER -OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
T h e R I T E R e p o r t