Transcript November 2013 - Econ-Market Update

Economic/Market Update – November 2013
Daryl Montgomery
November 7, 2013
Copyright 2013, All Rights Reserved
The contents of this presentation are not intended as a recommendation to buy or sell any security
and are for educational purposed only.
Economics and Policy
Obamacare Rollout has Some Bumps
At least the Food Stamp Program is Functioning
Growth in Food Stamp Per Person Expenditures
U.S. Economy Held Up by Benefits
… and Student Loans
…and Money Printing (Fed Balance Sheet)
M2 Money Supply
At Least there’s no Inflation (Would the
Government Lie?)
Red official inflation rate, Blue actual rate
Government Shutdown
• Government opens again, shut down Oct 1-17.
• Debt ceiling “suspended” until Feb 7, 2014, add this
to the 79 increases since 1940.
• In January, Bernanke said get rid of debt ceiling
(unlimited money printing would then be possible).
• There are now projections of national debt rising to
$34 trillion (only a question of when, not if).
• Shutdown has the delayed employment report and
possible skewed other government data (already
highly inaccurate).
Fiscal State of U.S.
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National Debt: $17.1 trillion.
State & Local Debt: $3.0 trillion
Unfunded Liabilities: $126 trillion
Debt doesn’t include Federal Reserve or Fannie Mae,
Freddie Mac and FHA obligations or
Student Loans: $1.0 trillion (600,000 defaults 2011/12)
Federal Budget Deficit
- 2012 was $1.1 trillion
- 2013 gap $680 billion* (was $755 billion in Aug)
-2014 est. $0.744 trillion
2012 Trade Deficit was $540 billion.
Historically average interest rates would bankrupt U.S.
Economic News
• ECB cuts rates to 0.25% in surprise move because
inflation rate falls to 0.7%. Pound, dollar rally.
• Rates in U.S (2008) & Japan (1999) around 0%,
UK (2009) 0.5%.
• US GDP up 2.8% in Q3 in build up in inventories.
PCE inflation 1.9%, Core inflation 1.4%. CPI 1.2%.
• US Jobs reports delayed, EU unemployment 12.2%.
• Manufacturing positive (PMIs):
US 56.4, EU 51.3, UK 56.0, China 51.4*
Twitter IPO
•Trading under the ticker TWTR.
•Selling 70 million shares, 13% of company.
•IPO priced at $26 (originally $17-$20, then
raised to $23-$25).
•Opened at $45.10
Twitter (TWTR): First Day of Trading
One-minute chart with Volume
Facebook (FB): One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Stocks, Commodities,
Currencies, Bonds
Market Summary
• U.S. indices hitting new highs (except Nasdaq).
• Volatility is volatile.
• Emerging markets have rallied off lows, seem to
be losing steam.
• Dollar has been weak.
• US interest rates pulling back, but still bullish
• Oil is seasonally weak.
• Gold and silver basing. COMEX gold inventories
disappearing fast, another record low.
Stock Market Performance During Each Fed Easing
Dow Industrials: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
S&P 500: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Nasdaq: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Russell 2000: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Volatility Index VIX: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
UK FTSE: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
German DAX: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Japan Nikkei One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Russia RTS : One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Brazil BOVESPA : One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
China Shanghai Composite : One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
India SENSEX : One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Gold GLD: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
COMEX Gold Inventory Shrinkage
Dark green is Gold available for delivery
Silver SLV: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Copper JJC: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Oil WTI: Monthly Chart
10- Year Treasury Interest Rate: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
30- Year Treasury Interest Rate: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
US Dollar DXY: One-Year Daily
50, 200, 325-day Moving Averages, RSI, MACD, DMI
Australian Dollar FXA: One-Year Daily
50, 200, 325-day Moving Averages, RSI, MACD, DMI
Swiss Franc FXF: One-Year Daily
50, 200, 325-day Moving Averages, RSI, MACD, DMI
Japanese Yen FXY: One-Year Daily
50, 200, 325-day MAs, RSI, MACD, DMI
Coffee ETF JO: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Coal Stocks ETF KOL: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
Uranium Stocks ETF URA: One-Year Daily
50, 200, 325-day Moving Averages, RSI, DMI, MACD
The End