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Sunday, May 3, 2015

NDD's weekly indicators


New Deal Demoncrat - weekly indicators. You can either believe some clown with a blog post who says the market is rolling over, or you can believe someone who says the economic indicators support no such blather.

So why do some people think the market is "rolling over"? Here's why:

Coincident indicators were mixed, but primarily negative. There were three positives: Tax withholding, container shipping, and for the third week in a row, Gallup consumer spending. Steel production was again "less awful" this week. Rail was again mixed, but after turing positive one week ago, returned to a negative reading this week. The Baltic Dry Index turned slightly negative. The TED spread and LIBOR turned more negative. Johnson Redbook consumer spending rebounded weakly from its least positive week in a year.

This week continued the dominant theme of the last several months: poor coincident indicators with generally positive long and short leading indicators. There is a shallow industrial recession due to the strong dollar and oil patch weakness, but a resilient consumer economy.

Because they're being fooled by the coincident readings. Actually, they're being fooled by a desire to concentrate on the negative coincident indicators, while ignoring tax withholding and consumer spending.

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