Transcript +.50 - BigFoot Investments

WHILE YOU ARE WAITING
A man makes a claim he can predict the exact score of every
football game before it begins…and he is always right – How?
Because the score of every football
game before it begins in 0-0
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GENIUS IS HARD TO FIND
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BIGFOOT INVESTMENTS - OPEN FORUM
Feb 16, 2017
WELCOME!
Volume #280
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AGENDA
 WELCOME!
 ADMIN NOTES
 QUOTE OF THE DAY
 SWAPS AND SPREADS
 OPTIMISM GAUGE
 DIAGNOSTICS GAGE
 FED TRACKER
 MACRO DATA
 DAVID’S CORNER
 ADVISOR INPUT
 QUESTIONS/COMMENTS
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“NOTES”
IF YOU USE ANY OF OUR SLIDES, PLEASE REMEMBER TO
HAVE THEM APPROVED BY YOUR COMPLIANCE DEPARTMENT
 WE’LL KEEP EVERYONE ON MUTE SO WE DON’T GET FEEDBACK
 PLEASE SEND US A QUESTION – WE’LL GET TO IT ASAP
 WE WILL TAKE YOU OFF MUTE IF YOU RAISE YOUR “HAND”
THANK YOU!
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“QUOTE” OF THE DAY:
Courage is fear…..
……holding on a minute longer.
George Patton Jr.
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Optimism Gauge
As of: 2/16/2017
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Measuring Our Economy
Change
Weekly Updates
Last Update: 2/16/2017
New Monthly Updates
Indicator
Current Value
Prior/Metric Value
Current Value
- 1.269
- 1.210
+1.0
Chicago Fed National Act Index (3 Mon M/A)
-0.07
-0.14
+.50
Unemployment
4.8%
4.7%
+2.00
Weekly Jobless Claims (4Wk Mov Av)
245,250
244,750
-.50
ECRI Weekly Index (Against 52 Wk Av)
145.6
145.2 (Rev)
+.50
Conf Board Leading Indicators (NEW)
124.6
124.0 (Rev)
+1.0
98.5 (Final – Jan 2017)
98.2 (Final – Dec 2016)
+.50
374,207 (Jan -2016)
371,110 (Dec-2016) Rev
+.50
105.9
105.8
+.50
56.0 (Expansion Line = 50)
54.5
+.50
Economic Capacity Utilization
75.3%
75.6% (Rev)
-.50
Stock Market Moving Averages
Weekly Data Points
>50-day MA/>100-Day MA
St Louis Fed Financial Stress Index
University of Michigan Sentiment – Final
Monthly Retail Sales – ex Autos (Adjusted)
NFIB Small Business Sentiment
ISM Manufacturing
S&P Case-Shiller 20 City Comp Index (YoY)
5.3% (Nov)
N/A
5.1% (Oct)
+.50
+.50
Measuring our Economy
READING AS OF: 2/16/2017
30
40
50 60
Current Reading:
80
20
10
70
96.26%
96.26%
Trend: Neutral
90
100
0
Economic Optimism Index
Current:
Prior:
Prior Reading:
96.26% (Rev)
Bias: Positive
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WEBSITE
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Market Diagnostics
Week of: Feb 13th 2017
BigFoot Investments
SENTIMENT INDICATORS Week of Feb 13th - 2017
1. AAII Investor Survey
2. TSP Sentiment Survey
3. NAAIM Survey of Manager Sentiment
4. CBOE Volatility Index
INTERNAL INDICATORS
5. S&P500 - 50D MA and 200D MA AND 2/10 MA
6. NYSE Bullish %
7. S&P 500 Bullish % ($BPSPX)
8. Percent of NYSE stocks above 200DMA
9. Percent of NYSE stocks above 10WMA
or 50DMA ($NYA50R)
10. NYSE 52-Week New Highs and New Lows
11. Percent of S&P500 stocks above 200DMA
12. Percent of S&P500 stocks above 50DMA
ADDED INDICATORS
13. Option Sentiment
14. Option Buyers Sentiment Gauge (OBSG)
15. Consumer Sentiment Index
16. Nasdaq Sentiment Index
17. Rydex Nova/Ursa Sentiment Indicator
Week of Feb 13th, 2017
29.41%
Prior: 41.72
WHAT WE WOULD BUY AT THIS LEVEL
REASON
BABA
STRONG CUSTOMER BASE
DHI
HOUSING
AMZN
GROWTH
GOOGL
GROWTH
BAC
VALUATION/INTEREST RATES
C
VALUATION/INTEREST RATES
AGN
VALUATION
MHK
HOUSING STORY
AAPL
STRONGE OUTLOOK
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THE BEAT GOES ON
MEMBER
DISTRICT
TOPIC
LINK TO SOURCE
Fischer
Vice Chair
Formulation of monetary policy and economic modeling. The Teal Book.
"At the moment we're going strictly according to what we see as our
responsibility according to the law, which is maintaining full employment
and getting inflation to 2 percent."
Lacker
Richmond
Significantly higher interest rates are warranted
https://www.richmondfed.org/press_room/speeches/pre
sident_jeff_lacker/2017/lacker_speech_20170214
Yellen
Chair
Expects the economy to continue to expand at a moderate pace, with the
job market strengthening somewhat further and inflation gradually rising
to 2 percent. Estimates of the neutral rate are well below pre-crisis levels-a phenomenon that may reflect slow productivity growth, subdued
economic growth abroad, strong demand for safe longer-term assets, and
other factors. Hope that fiscal policy changes will be consistent with
putting U.S. fiscal accounts on a sustainable trajectory. Gradual increases in
the federal funds rate will likely be appropriate
https://www.federalreserve.gov/newsevents/testimony/
yellen20170214a.htm
Kaplan
Dallas
I believe that we should be taking steps to remove additional amounts of
monetary accommodation. Moving sooner rather than later will make it
more likely that future removals of accommodation can be done gradually
https://www.dallasfed.org/news/speeches/kaplan/2017/
rsk170213.aspx
Lockhart
Atlanta
Federal Reserve does not need to rush to raise interest rates
https://www.frbatlanta.org/news/speeches/2017/0214lockhart-crisis-recession-recovery-huntsville.aspx
Rosengren
Boston
Fed may have to raise interest rates more than three times in 2017
https://www.bostonfed.org/news-and-events/news/toptakeaways-021517-ny-talk.aspx
Harker
Philly
Growth, labor markets and productivity issues
https://www.philadelphiafed.org/publications/speeches/
harker/2017/02-15-17-la-salle-university-16th-annualeconomic-outlook
Dudley
New York
Gradually remove further monetary policy accommodation and snug up
interest rates a little bit further in the months ahead" if the pace of U.S.
economic growth runs just above 2 percent and inflation continues to rise
https://www.federalreserve.gov/newsevents/speech/fisc
her20170211a.htm
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LOOKS LIKE WE’RE HEADED FOR 3 HIKES
STILL “CHATTER” BUT NO
71.6
50.9
44.2
http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
Source: CME; Federal Reserve
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Credit Anticipates-Equity Confirms
As of: 2/15/2017 COB
Swaps and Spreads
Rate
Current
Current
Libor/OIS
0.380
0.380
Euribor/Eonia
-0.021
-0.025
DTCC Repo - Agency
Discontinued
Discontinued
DTCC Repo - MBS
0.570
0.599
DTCC Repo – Treasury
0.553
0.582
High Yield
Fed Reserve Currency Swaps-Short
3.93
270(ECB)
122(BOJ)
3.80
265 (ECB)
0 (BOJ)
Fed Reserve Currency Swaps-Long
0
0
2-Year Swap Spread
0.322
0.316
TED Spread
0.499
0.502
*Note: Status
Status
Status
Status*
= No major impact
= Negative Impact
= Moving Worse
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PRETTY QUIET
Source: Kansas City Fed
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AND HERE’S THE REPLACEMENT FOR CLEVELAND’S STRESS INDEX
Source: Cleveland Fed
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MACRO DATA
STILL RISK
ON
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Earnings Scorecard
Source: FactSet
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Source: Yardeni
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ECRI INFLATION OUTLOOK
Source: ECRI
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LARGEST SEASONALLY ADJUSTED ALL ITEMS
INCREASE SINCE FEBRUARY 2013
Source: BLS
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TAKE YOUR CHOICE
Source: Atlanta Fed; Haver Analytics; New York Fed; WSJ
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DOLLAR, DOLLAR, DOLLAR…ALL STAND UP AND HOLLER
Fuel Costs
Source: BLS
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SLIGHT RETREAT – ESPECIALLY OUTLOOK
Source: dShort; University of Michigan
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STARTING TO LEVEL OFF AS NEWNESS WEARS OFF???
Source: Schwab
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AS EXPECTED
Source: WSJ
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BUT SLOW LOAN GROWTH IS NOT ENCOURAGING
LIKEWISE, LOAN-TO-DEPOSIT RATIO LOW
TYPICALLY IN THE 80-90% RANGE
Source: FRED
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INFLATION INVOLVES PERCEPTION – SOME THOUGHTS
Source:
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The Q1 Sentiment Index came in at 55, a seven point uptick from pre-election Q4.
…. many are optimistic about potential opportunities and the US economy this year.
Mitigating this optimism is concern around potential reform to the tax laws.
ABOVE BREAK-EVEN
LEVEL (50) FOR THE
FIRST TIME IN A YEAR
Source: Real Estate Round Table
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HIGHEST SINCE DECEMBER 2004
Source: NFIB; dShort
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PRODUCER PRICES JUMP – MOST SINCE 2012
Source: BLS
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SIGNS OF WAGE GAINS AND SENTIMENT
+0.8%
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SIGNIFICANT EXPANSION X 2
Source: NY FED; dShort
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PERMITS HIGHEST IN 12 MONTHS – STARTS STUMBLE A BIT
Up 4.6%
-2.6%
Multi-unit -10.2%
Source: Census Bureau
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OFF TO THE RACES
Source: WSJ
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STILL A “BULL”
Source: Ned Davis
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LESS THAN EXPECTED – BUT DESCENT FOR NOW
Source: Eurostat
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BUT EUROPEAN COMMISSION CALLS FOR GROWTH IN 2017
Source: European Commission
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WHEREVER YOU GO – THAT’S WHERE YOU ARE
Source: BMI
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BETTER BUT SKEWED A BIT
Source: Trading Economics
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THREE YEAR HIGH – BUT SHORT-LIVED??
31% INCREASESEASONAL
IN
MINING COSTS - IMPACTS
COAL
Source: National Bureau of Statistics; Investing.com
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GROWTH SLOWS SHARPLY = PRIVATE CONSUMPTION/INVENTORIES
SAAR 1.0%
Est: 1.1%
Source: Cabinet Office Japan
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WHERE’S ALL THAT BREXIT STUFF?
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OUTLOOK IMPROVING
Source: Goldman Sachs
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OVERALL:
INDICATOR
STATUS
COMMENT
Labor Market
Strong
Trade
Currencies
Sentiment
Strong
Energy
Supply creeping up
Fiscal Policy
Path a bit muddy
Housing
Strong
Monetary Policy
Mixed messages
Geopolitical Risk
Lots of dynamics
Global Macro
Improving with some exceptions (Greece)
Inflation
Moving up
Interest Rates
Volatile
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0.425
0.375
U.S. Macro
Last
New
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DAVID’S CORNER
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QUESTIONS & COMMENTS
THANKS FOR JOINING US!
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investment strategies recommended or undertaken by BigFoot Investments.com), or any non-investment related content, made
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