Monday
Dec032012

ISM Manufacturing Surprises to the Downside

Today's ISM Manufacturing report for the month of November came in lower than expected (49.5 vs. 51.4), and it was the indicator's worst monthly reading since July 2009.  While readings below 50 are indicative of economic contraction, the weak report may be due in part to some residual impact from Sandy. 

Like the headline reading, the internals for today's report were weak.  The table below lists the current readings of the ISM Manufacturing's ten subcomponents and compares them to their levels from last month and last year.  Within this month's report, six out of the ten subcomponents were below 50 and all but three (Production, Supplier Deliveries, and Imports) declined from their October levels.  Relative to last year, this month's report was even weaker as Prices Paid was the only subcomponent that showed an increase.  With respect to jobs, this month's reading in the employment sub-component came in at 48.4, which was the lowest reading since July 2009.

The charts below show the historical charts of each subcomponent of the ISM Manufacturing report going back to 1990.

 Subscribe to Bespoke Premium to receive more in-depth research from Bespoke.

Thursday
Nov292012

Initial Jobless Claims Drop Less Than Expected

Initial jobless claims for the latest week came in at 393K this morning, which was down from last week's reading of 416K.  Although claims declined for the week, the drop was not as large as expected as economists were looking for a level of 390K.  Since the peak reading in the aftermath of Sandy two weeks ago, jobless claims are now down 58K.

Although claims for the latest week declined, the four-week moving average is still rising, and barring a large drop next week, it should rise again next week.  This week's level of 405.3K is the highest four-week average reading since September 2011, and it represents the 35th straight week that the four-week moving average has not made a new low.

On a non-seasonally adjusted basis, jobless claims fell by more than 45K to 357K.  This is below the average for this time of year going back to 2000 (396K) and the lowest weekly reading for this time of year since 2007.

Subscribe to Bespoke Premium to receive more in-depth research from Bespoke.

Wednesday
Nov212012

Initial Jobless Claims Fall to 410K

Initial jobless claims fell 41K in the latest week from an upwardly revised 451K down to 410K.  There really is not much to say about these numbers except that they are still being skewed by the impact of Hurricane Sandy.  Although for those who have doubts regarding the economy's momentum, this week's reading doesn't help.  For the optimists out there, we would note that in the two weeks after Hurrican Katrina, initial claims rose by 98K. Post Sandy, the maximum increase in claims has been just 90K. 

Looking at the four week moving average, initial claims rose to 396.3K, which is the highest reading since November 2011.  It has now been 34 weeks since the four-week moving average made a new post-recession low.

On a non-seasonally adjusted basis, initial claims dropped to 397.7K.  Interestingly, this is the lowest reading for the current week since 2007.  This week's reading was also below the average of 392K for the current week going back to 2000.  On a non-seasonally adjusted basis at least,  claims for the latest week were pretty positive.

Subscribe to Bespoke Premium to receive more in-depth research from Bespoke.

Tuesday
Nov202012

Housing Starts Rise to Highest Level Since July 2008

Housing starts for the month of October came in at an annualized rate of 894K, which was considerably higher than expectations of 840K.  It was also the highest monthly reading since July 2008.  The charts below show historical levels of housing starts going back to 1959 on both a monthly (left side) and year/year (right side) basis.  We also broke out the housing starts on a single and multi-family basis. 

This month's headline reading in housing starts showed an increase of 41.9% on a year/year basis.  As shown, though, much of the year/year increase was in the form of multi-family starts which came in at 300K, which was a 57% increase from last year's level.  While single-family starts came in at 594K, it only represented a year/year increase of 35.3%.

In the lower charts, we also broke out housing starts by region. During the month of October housing starts rose in the Midwest and West but fell in the Northeast and South.  Although Hurricane Sandy occurred at the end of October, it may have been responsible for some of the decrease in starts for the region.  However, given that the region accounts for less than 10% of total starts, we wouldn't expect Sandy to have much of an impact on this indicator going forward.

Subscribe to Bespoke Premium to receive more in-depth research from Bespoke.

Monday
Nov192012

NAHB Sentiment Index Hits Highest Levels Since May 2006

Home builder sentiment in the US rose from 41 to 46, which is the highest level since May 2006.  With this month's increase, the index is also getting closer and closer to the fifty threshold for growth for the first time since April 2006.  In the table to the right, we break down each of the components of the NAHB survey.  As shown, 'Future Traffic' remains the most positive at a level of 53, followed by "Present Sales" at 49.  Finally, at a level of 35, 'Traffic' remains the weakest component of the index.  Part of the weakness in the 'Traffic' component may have been due to slow activity in the Northeast due to Hurricane Sandy.

Weakness in the Northeast was also evident in the regional breakdown of the NAHB survey.  While the Midwest, South, and West were all close to or above 50 and increased during the month, the Northeast component actually saw a decline, dropping from 32 to 31.  While the Northeast was and continues to show weakness, rebuilding from last month's storm may provide a boost for building activity in the region during the months to come.

Below we provide historical charts for each of the components listed in the table above.  For each chart, recessions are highlighted with gray shading.

Subscribe to Bespoke Premium to receive more in-depth research from Bespoke.

Thursday
Nov152012

Empire Manufacturing Not As Bad As Expected?

While most of today's economic data has been weaker than expected, the Empire Manufacturing report for November came in slightly ahead of expectations (-5.2 vs -8.0).  The table to the right highlights the levels of the General Business Index and each subcomponent based on the current environment as well as the outlook six months out.  Given that this morning's headline reading was negative, it is not a surprise that five of the nine subcomponents are also negative.  Additonally, it is also typical to see that the outlook for six months from now is higher than the current environment.

One component that does stick out, however, is employment.  Not only is it the most negative component this month, but it is also only one of two components that is negative based on expectations six months from now.  In other words, manufacturers are not and have no plans on hiring.

The top chart below shows the historical levels of the Empire Manufacturing Index for both current conditions and conditions six months out.  While the two series tend to move in the same direction over time, this month saw each index move in opposite directions.  

The second chart shows the historical levels of plans for capital expenditures and technology spending over the next six months.  Here again, manufacturers in the New York region are reigning in their investment plans.

     

Thursday
Nov152012

Initial Jobless Claims Surge to Highest Level Since April 2011

Initial jobless claims surged to their highest level since April 2011 today rising from 361K up to 439K.  While some of the increase is attributable to Hurricane Sandy, there really is no way to sugar coat this weakness.  If you were having second thoughts regarding the economy, today's report doesn't help, and it will likely take weeks before we can get a true read on jobless claims.

With this week's increase the four-week moving average also soared to 383.8K, which puts this reading more than 20K above the post-recession low of 363K from March of this year.  It has now been 33 weeks since the four-week moving average made a post-recession low, which is the longest stretch of the expansion.  It will also be several more weeks before making a new low in claims is even part of the conversation.

On a non-seasonally adjusted basis, jobless claims also saw a sharp increase, rising to 466.3K.  Not surprisingly, this is well above the average for the current week dating back to 2000 (394K).

     

Thursday
Nov082012

Initial Jobless Claims Drop to 355K

Although the numbers may be skewed due to the effects of hurricane Sandy, this morning's release of initial jobless claims for the latest week showed an unexpected decline to 355K from last week's reading of 363K (expectations were for an increase to 370K).  We will have to wait until next week to see the ultimate impact of Sandy on jobless claims.

Over the last four weeks, jobless claims have averaged 370.5K, which is an increase from last week's reading of 367.3K.  It has now been 32 weeks since jobless claims made their last post-recession low back in March, making this the longest streak without a new low since the recession ended in mid 2009.

On a non-seasonally adjusted basis, jobless claims rose to 355.4K from 339.9K last week.  In spite of the increase, this is still below the average for the current week going back to 2000 (388K), and the lowest comparable weekly reading for NSA claims since 2007.

Subscribe to Bespoke Premium to receive more in-depth research from Bespoke.

Monday
Nov052012

ISM Services Comes in Below Forecasts

Today's release of the ISM Non Manufacturing Index for October declined from 55.1 down to 54.2 and was lower than expected (55.0).  As a result of this month's decline in the Non Manufacturing Index, the overall combined ISM, which takes both the Manufacturing and Non Manufacturing sectors into account, dropped from 54.5 to 53.7.  In spite of the declines, both the Non Manufacturing and Combined readings are both well above 50.

The table below lists each of the ISM Non Manufacturing Index's sub-indices and where they stand relative to last month and a year ago.  Compared to September, this morning's report was relatively weak as only two of the ten sub-indices increased in October (Backlog Orders and Employment).  Relative to one year ago, this morning's report showed significant improvement in both the headline and sub-indices.  Last year at this time the headline index was at 52.6, while eight out of ten sub-indices were lower back then. 

The charts below show the historical levels of each of the ISM Non-Manufacturing index's ten subcomponents.  With regards to each of these charts, there was little deviation from the headline index.  One notable exception is export orders which saw a sharp drop falling from 50.5 down to 47.5, which is the lowest monthly level since August 2010.

Thursday
Nov012012

ISM Manufacturing Exceeds Expectations

Thursday's release of the ISM Manufacturing report for the month of October came in better than expected (51.7 vs. 51.0) and roise modestly from last month's level of 51.5.  As shown in the table below, although this month's headline reading saw an increase, the majority of the index's subcomponents actually showed declines.  Of the index's ten subcomponents, only two (Production & New Orders) increased from September.  Compared to this time last year, though, the numbers look a little better.  Although the headline reading is down slightly from 51.8 one year ago, four of the index's subcomponents are currently higher.

The charts below show each of the ISM Manufacturing Index's ten subcomponents going back to 1990.  The top two charts show the relatively strong bounce in Production and New Orders, but right below that the index of Backlog Orders is now down to 41.5, which is a level that has only been reached once since early 2009.

     

Thursday
Nov012012

Lower Than Expected Initial Jobless Claims

Initial jobless claims for the latest week came in better than expected (363K vs. 370K) for the second straight week and also fell to their lowest level since October 5th.  Given the halt to business over the the last few days in the mid-Atlantic region, though, you can expect this number to rise in the weeks ahead.

The four-week moving average for initial claims also fell slightly this week to 367.3K.  This marks the 31st consecutive week that claims have not made a post-recession low, tying last year's streak from March to October.  With the expected increase in claims in the coming weeks, you can expect the current streak to eclipse last year's streak.

Finally, on a non-seasonally adjusted basis (NSA) claims fell to 339.8K, which marks the lowest level for the current week dating back to 2007.  It is also below the historical average of 362.9K for the current week dating back to 2000.

Bespoke 50

If you are an investor who is looking for new stock ideas?  Each week we publish "the Bespoke 50," a list of our favorite growth stocks in the Russell 3,000.  To make the list of 50, a stock must have strong earnings growth prospects along with an attractive price chart based on Bespoke's proprietary fundamental and technical analysis.

The "Bespoke 50" is released on a weekly basis, and in it you'll find the 50 stocks that made the cut, price charts for each of them, and an Excel file that you can download as well.

If you're interested in finding the 50 growth stocks that Bespoke finds most attractive, become a Bespoke Premium member today.  Please click here to subscribe.

Thursday
Oct252012

Jobless Claims Settle Down

After two weeks of wild moves in both directions, jobless claims appear to be returning back to normal this week.  For the latest week, initial claims dropped from 392K down to 369K, which was 1K below the 370K estimate.

On a four-week moving average basis, jobless claims rose slightly from 366.5K to 368K.  This marks the 30th consecutive week that we have gone without seeing a post-recession low in claims, which is one short of the streak we saw last year at this time.  In order to get below the prior post-recession low of 363K, next week's claims will have to come in below 350K, so don't hold your breath.

Looking at claims on a non-seasonally adjusted basis, claims dropped by 20K to 342.7K.  This is the lowest level for the current week going back to 2007, and below the average of 354K for the current week going back to 2000.

     

Thursday
Oct182012

Philly Fed Surpasses Expectations

Today's release of the Philly Fed for October came in stronger than expected (5.7 vs 1.0) and was also the best reading since April.  While the overall headline number was positive, the internal components of the report were mixed.  As shown in the table to the right, of the nine subcomponents only three were positive, and they all had to do with Prices and Inventories.  Measures of economic growth like New Orders, Shipments, Number of Employees, and Average Workweek all remain negative.

The charts below compare the current readings of the headline and subsector readings for the Philly Fed and the Empire Manufacturing (released earlier this week) reports.  For the last couple of months, we have been noting the disparity between the reading in both the headline and many of the subsector readings.  Even though the two regions border each other, the two surveys are telling different stories about their respective regions.

Bespoke 50

Looking for new stock ideas?  Each week we publish "the Bespoke 50," a list of our favorite growth stocks in the Russell 3,000.  To make the list of 50, a stock must have strong earnings growth prospects along with an attractive price chart based on Bespoke's proprietary fundamental and technical analysis.

The "Bespoke 50" is released on a weekly basis, and in it you'll find the 50 stocks that made the cut, price charts for each of them, and an Excel file that you can download as well.

If you're interested in finding the 50 growth stocks that Bespoke finds most attractive, become a Bespoke Premium member today.  Please click here to subscribe.

Thursday
Oct182012

Jobless Claims More Than Erase Last Week's Decline

After dropping to their lowest level in more than four years last week, initial jobless claims more than erased last week's decline and came in at their highest level since July.  In the last week, jobless claims rose from a revised 342K up to 388K, for an increase of 46K.  This was the largest weekly increase since January 2009, in a report that can only be described as bad.  Making matters even worse is the fact that this was also the reference week for the October employment report.  This kind of number cannot be something that people in the Obama campaign wanted to see.

Looking at the four-week moving average, jobless claims saw an increase of just under 1K.  It has now been 29 weeks since jobless claims have made a post-recession low, which is getting close to the longest streak of 31 weeks back in 2011.

Jobless claims on a non-seasonally adjusted (NSA) basis were just as bad, if not worse, than the seasonally adjusted number.  As shown in the chart below, NSA claims rose from 329.9K to 359K.  While this was still inline with the historical average for the current week going back to 2000, it was the first time that NSA claims showed a year/year increase since April 2011!

Become a Bespoke subscriber today to access Bespoke's Model Stock Portfolio -- beating the S&P 500 by 27 percentage points since inception in May 2007.

Wednesday
Oct172012

Housing Starts and Building Permits Exceed Forecasts

Today's release of Housing Starts and Building Permits for the month of September exceeded forecasts by a wide margin as both indicators rose to their highest levels since July 2008.  At current levels, Housing Starts have risen 82% from their recession lows, while Building Permits have increased by 74%.  Even after these big increases, however, both are still well below their pre-recession levels.  More noteworthy is the fact that Housing Starts are still 40% below the historical average going back to 1959, when the size of the US population was less than two-thirds of what it is now!

Throughout the recovery, one of the criticisms of the increase in Housing Starts was the fact that much of the growth was due to starts of multi-unit dwellings.  This month, however, the bulk of the increase came from starts of single family units.  While total starts increased by 34.7% year/year, starts of single family units actually rose by 42.8%, which was more than double the rate of growth in multi-family units.

The charts below show Housing Starts data for the four major regions of the country.  As shown in the charts, starts actually saw a modest decrease in the Northeast, falling from 79K down to 75K.  Out west and in the south, however, starts showed big gains.

Given the high positive correlation between Housing Starts and Building Permits, below we present the charts showing historical trends in Building Permits without much in the way of commentary. 

In terms of year/year growth, building permits saw the largest annual increase since 1983, while permits for multi-family units grew at the fastest rate since 1967!


The charts below show building permits by region going back to 1960.

Tuesday
Oct162012

NAHB Housing Index Hits Highest Level Since June 2006

Today's release of the NAHB Sentiment survey for October rose from 40 to 41 which was the highest level since June 2006 and inline with forecasts (41).  Today's inline report ended a streak of five straight months of better than expected reports.  As shown in the table to the right, all of this month's increase was due to an increase in Traffic (increased from 30 to 35), as Present and Future Sales were both unchanged.

In terms of regions, sentiment in the Northeast remains the most depressed even after increasing from a level of 31 to 34.  The Midwest was the only region that saw a decline in sentiment, falling from a level of 45 to down 41.  Finally, sentiment out West saw the largest monthly increase this month, rising from 44 to 49, bringing sentiment in that region ever so close to the 50 threshold that indicates actual growth.

Bespoke 50

Looking for new stock ideas?  Each week we publish "the Bespoke 50," a list of our favorite growth stocks in the Russell 3,000.  To make the list of 50, a stock must have strong earnings growth prospects along with an attractive price chart based on Bespoke's proprietary fundamental and technical analysis.

The "Bespoke 50" is released on a weekly basis, and in it you'll find the 50 stocks that made the cut, price charts for each of them, and an Excel file that you can download as well.

If you're interested in finding the 50 growth stocks that Bespoke finds most attractive, become a Bespoke Premium member today.  Please click here to subscribe.

Thursday
Oct112012

Jobless Claims Post Largest Weekly Drop Since July

Initial jobless claims for the latest week dropped by 30K from 369K down to 339K for the largest weekly drop since July 20th.  It was also the lowest weekly reading since January 2008.

Due to this week's decline, the four-week moving average also saw a large drop, falling from 375.5K down to 364K.  This is now just 1K above the post recession low of 363K.  It has now been 28 weeks since the four-week average of jobless claims made their last post-recession low in March, which is the second longest streak of the recovery.  The longest streak, coincidentally, occurred from March to October of last year.

On a non-seasonally adjusted basis (NSA), jobless claims actually rose by 26K to 327.1K, but this is common for the first week of October where jobless claims on an NSA basis typically do rise.  For the current week, NSA claims are at their lowest level since the first week of October 2007, and they're well below the historical average of 372K for the current week going back to 2000.

Bespoke 50

Looking for new stock ideas?  Each week we publish "the Bespoke 50," a list of our favorite growth stocks in the Russell 3,000.  To make the list of 50, a stock must have strong earnings growth prospects along with an attractive price chart based on Bespoke's proprietary fundamental and technical analysis.

The "Bespoke 50" is released on a weekly basis, and in it you'll find the 50 stocks that made the cut, price charts for each of them, and an Excel file that you can download as well.

If you're interested in finding the 50 growth stocks that Bespoke finds most attractive, become a Bespoke Premium member today.  Please click here to subscribe.

Thursday
Oct042012

Jobless Claims Slightly Better Than Expected

Thir morning's release of jobless claims for the latest week came in slightly better than expected.  As economists were looking for a total of 370K initial claims, the actual reading came in at 367K, representing an increase of 4K from last week's upwardly revised 363K.

The chart below shows the four-week moving average for initial claims, which was unchanged at 375K.  This represents the 27th consecutive week that claims have not made a new post-recession low, which is the second longest streak since last year's 31-week stretch.  Looking at recent jobless claims readings shows that over the next two weeks the four-week moving average will be dropping two 385K readings.  Therefore, if claims can come in the low 360Ks or even 350Ks, we will likely see a new post-recession low in this reading.

Finally, on a non-seasonally adjusted basis (NSA), initial jobless claims came in at 298.7K.  This is the lowest reading for the current week since 2007, and it's below the average for the current week of 323K.

Bespoke 50

Looking for new stock ideas?  Each week we publish "the Bespoke 50," a list of our favorite growth stocks in the Russell 3,000.  To make the list of 50, a stock must have strong earnings growth prospects along with an attractive price chart based on Bespoke's proprietary fundamental and technical analysis.

The "Bespoke 50" is released on a weekly basis (on Thursdays), and in it you'll find the 50 stocks that made the cut, price charts for each of them, and an Excel file that you can download as well.

If you're interested in finding the 50 growth stocks that Bespoke finds most attractive, become a Bespoke Premium member today.  Please click here to subscribe.

Wednesday
Oct032012

ISM Services Surprises to the Upside

Today's release of the ISM Services report for September came in better than expected (55.1 vs 53.1) for the third straight month.  Today's report was also the highest reading since March.  Looking at a combined ISM, which includes both the Manufacturing and Services reports and weights them according to their share of the US economy, September's reading came in at 54.5, which was 1.3 points above the reading for August and also the highest reading since March.  Perhaps the only bad thing to say about both charts below is that in each case, the indicators remain in downtrends from their February 2011 peaks.

The table below shows the current levels for the ISM Services index and each of its subcomponents and compares the readings to last month and last year.  As shown, although the headline index increased this month, the number of subcomponents that are currently below 50 increased to two, and only four subcomponents saw increases.  Compared to a year ago, however, the numbers are actually more positive.  Last year at this time there were three subcomponents below 50.  Furthermore, seven of the ten subcomponents are higher now than they were a year ago.

We have also included charts of each subcomponent below.  Like the overall headline index, many of these components are in short-term downtrends from their early 2011 peaks.  Unfortunately, one indicator that is the closest to breaking its downtrend this month is Prices Paid, which came in at 68.1, which is the highest reading since February.

Become a Bespoke subscriber today to access Bespoke's Model Stock Portfolio -- beating the S&P 500 by 27 percentage points since inception in May 2007.

Monday
Oct012012

ISM Manufacturing Back Above 50

Markets got a dose of positive news this morning with the better than expected ISM Manufacturing report for the month of September.  While economists were looking for a level of 49.6, the actual reading came in at 51.5, breaking a string of three straight months below 50.

Looking at each of the indices subcomponents shows broad based improvement in the manufacturing sector during the month of September.  Of the ten subcomponents, nine increased during September, while five are above the 50 threshold for growth and five are below.  Compared to one year ago, however, the numbers were less robust as just four subcomponents are higher now than they were a year ago, while six are lower.  While economic data last week put the market in a down mood, the month of October has gotten off on the right foot.

Become a Bespoke subscriber today to access Bespoke's Model Stock Portfolio -- beating the S&P 500 by 27 percentage points since inception in May 2007.