Transcript November 2015- Review of Economy and Markets

Economics/Market Review
Stocks Struggling, Commodities Bottoming
Daryl Montgomery
November 17, 2015
Copyright 2015, All Rights Reserved
The contents of this presentation
are not intended as a
recommendation to buy or sell
any security and are for
educational purposes only
The New York Investing meetup is not affiliated
with the New York Life Insurance Co.
Don’t Worry, Fed Has Everything Under Control
Zombie Buyers Will Keep Holiday Sales High
Political/Consumer Update: New Trump Car Hits Market
US Roundup
• Q3 US GDP up 1.5% (3.0% is good).
• US Jobs 271K in Oct. Avg 2014 was 260K
“Not in Labor Force” 94.5 million v 79.3 million
• US Retail Sales: up 0.1% in Oct, 0.0% in Sept/Aug
Consumer spending is 70% of GDP.
• Manufacturing PMI Oct was 50.1 (50 break even)
• Business Inventory to Sales 1.38, last 2 times it rose
to this level were during recessions.
• Oct PPI minus 1.6% (9th straight decrease).
• Fed predicted to raise rates about ZERO in Dec. We
shall see.
Civilian Labor Force Participation Rate
US Retail Sales
US Manufacturing PMI
Fiscal State of U.S.- Mostly Unchanged
• National Debt: $18.6 trillion
State & Local Debt: $3.1 trillion
GDP: $18.2* trillion [calculation changed]
Debt/GDP Ratio: 102%* (117%* Fed+State)
• Unfunded Liabilities: $100* trillion
Total National Assets: $119 trillion
• Debt doesn’t include Federal Reserve, Fannie Mae +
Freddie Mac and FHA obligations
• Total US Debt: $ 65.9 trillion
• Student Loans: $1.3 trillion (600,000 defaults 2011/12)
• Federal Budget Deficit
-2015 $0.468/$0.483 trillion
• 2014 Trade Deficit $737 billion.
• Historically average interest rates would bankrupt U.S.
EU/Asia
• Terrorist attack in France (Obama said ISIS under
control that morning); Refugee Crisis in EU
• Negative interest rates pervasive in Europe.
Denmark, Sweden CB rates are minus.
• EU GDP 0.3% -- after lots of QE.
• China bank loans at multi-year lows.
• Japanese falls back into recession – 5th in 7 years.
Abenomics (currency devaluation) didn’t work.
• Manufacturing and trade slowing worldwide.
Central Bank Interest Rates
Manufacturing PMIs
Stocks, Commodities,
Currencies, Bonds
Market Summary
• Stocks rallied off Aug bottom, then turned back
down in Nov. Nasdaq still holding market up.
• Dollar looks like it wants to break out on upside.
Euro trying to fall to parity. Swiss franc weak.
• Gold/Silver at multi-year lows. Copper 6-yr low.
• Oil is testing recent low at 38.
• U.S. interest rates rallying (bond prices going down)
• Only cheap assets are commodities. They’re not
read to rally yet.
• Cash is king.
Dow Industrials: One Year Daily
50, 200, 325-Week Moving Averages, RSI, DMI, MACD
S&P500: One Year Daily
50, 200, 325-Week Moving Averages, RSI, DMI, MACD
Nasdaq: One Year Daily
50, 200, 325-Week Moving Averages, RSI, DMI, MACD
Russell 2000: One Year Daily
50, 200, 325-Week Moving Averages, RSI, DMI, MACD
US Dollar DXY: One Year Daily
50, 200, 325-Week Moving Averages, RSI, DMI, MACD
German DAX: One Year Daily
50, 200, 325-Week Moving Averages, RSI, DMI, MACD
Euro FXE: One Year Daily
50, 200, 325-Week Moving Averages, RSI, DMI, MACD
Swiss Franc FXF: 6 Months Daily
50, 200, 325-Week Moving Averages, RSI, DMI, MACD
UK FTSE: One Year Daily
50, 200, 325-Week Moving Averages, RSI, DMI, MACD
Japan Nikkei: One Year Daily
50, 200, 325-Week Moving Averages, RSI, DMI, MACD
Japanese Yen: One Year Daily
50, 200, 325-Week Moving Averages, RSI, DMI, MACD
China Shanghai Composite: One Year Daily
50, 200, 325-Week Moving Averages, RSI, DMI, MACD
India SENSEX: One Year Daily
50, 200, 325-Week Moving Averages, RSI, DMI, MACD
Russia RSX: One Year Daily
50, 200, 325-Week Moving Averages, RSI, DMI, MACD
Brazil BOVESPA: One Year Daily
50, 200, 325-Week Moving Averages, RSI, DMI, MACD
Oil WTI: 2 Years
Coffee JO: 6 Months Daily
50, 200, 325-Week Moving Averages, RSI, DMI, MACD
Australian Dollar FXA: 6 Months Daily
50, 200, 325-Week Moving Averages, RSI, DMI, MACD
Gold ETF GLD: 6 Months Daily
50, 200, 325-Week Moving Averages, RSI, DMI, MACD
Silver ETF SLV: One Year Daily
50, 200, 325-Week Moving Averages, RSI, DMI, MACD
Copper JJC: One Year Daily
50, 200, 325-Week Moving Averages, RSI, DMI, MACD
30-Year Treasury Yield: One Year Daily
50, 200, 325-Week Moving Averages, RSI, DMI, MACD
10-Year Treasury Yield: One Year Daily
50, 200, 325-Week Moving Averages, RSI, DMI, MACD
The End