Tuesday, October 17, 2017

Some perspective from Liz Ann Sonders


I'm still sick with a cold, and in addition now have to make up a week's worth of work at school, so thus the lack of posting.

But I just remembered today that I'm still not following Liz Ann Sonders as much as I should, so here's her latest market update:


Liz Ann Sonders - 13 Oct market perspective.

Salient points:
U.S. stock indices have continued to push to record highs, with little apparently able to throw them off course. The grind higher has pushed through natural disasters, the Las Vegas tragedy, domestic political failures, international political tensions, and missile tests and threats from North Korea—an ample “wall of worry” for stocks to climb.

And

Although there is little of the excess that would suggest recession risk is near, we do see signs that the characteristics of the economy and market may be changing. Bond yields have crept higher, international markets have performed better, and cyclical sectors such as energy and materials have outperformed—all potential signs of the latter stages of a cycle.

And

Strong surveys indicate improving economy


ISM manuf. vs. ISM non-manuf.

Source: FactSet, Institute for Supply Management. As of Oct. 9, 2017.
Additionally, the U.S. Citigroup Economic Surprise Index has moved back into positive territory, while several measures of capital expenditures have started to move higher. 
Economic surprises are positive

Citi Economic Surprise Index- US
Source: FactSet, Citigroup. As of Oct. 9, 2017.
And capex looks to be improving

nondefense capital goods orders ex-aircraft
Source: FactSet, U.S. Census Bureau. As of Oct. 9, 2017.
Philly Fed Capex Index
Source: Federal Reserve Bank of Philadelphia. As of Oct. 9, 2017.

Read her, she's an example of the exceedingly rare analyst who knows what they're talking about.

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