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17 сентября 2018, 11:37

The Fed Sets Expectations for the S&P 500 in Week 3 of September 2018

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The S&P 500 closed out the third week of September 2018 on an upnote, but not by so much that it resumed setting the kind of new record highs that it was just a few weeks ago. The following chart shows the latest update to our spaghetti forecast chart for the trajectory of the S&P 500, where we find that investors would appear to be currently splitting their forward-looking attention between the future quarters of 2018-Q4 and 2019-Q1, with a somewhat heavier focus on 2019-Q1. As for why investors would appear to be looking at these two future quarters in particular, we suspect that it has a lot to do with the Federal Reserve's plans for changing its Federal Funds Rate (FFR), the interest rate that banks pay for borrowing money from the Fed, which sets the floor for short term interest rates in the United States. When we last reported upon investor expectations for the future for the FFR just over a month ago, investors were anticipating that the Fed would hike that rate by a quarter point twice more in 2018, in both September and December, then take a breather until June 2019 before doing it again. Since then, the combination of reports of continued strength in the U.S. economy with multiple statements by the Fed's minions in recent weeks is giving investors reason to anticipate that there will be no breather in the Fed's latest series of short term interest rate hikes. The following table indicates what the CME Group's FedWatch tool anticipates for the future of the Federal Funds Rate based on information from the FFR futures market. (Please click here to view a screen shot of the table if you're reading this article on a site that republishes our RSS news feed, but which doesn't properly render the table.) Probabilities for Target Federal Funds Rate at Selected Upcoming Fed Meeting Dates (CME FedWatch on 14 September 2018) FOMC Meeting Date Current 175-200 bps 200-225 bps 225-250 bps 250-275 bps 275-300 bps 325-350 bps 350-375 bps 26-Sep-2018 (2018-Q3) 0.0% 97.4% 2.6% 0.0% 0.0% 0.0% 0.0% 19-Dec-2018 (2018-Q4) 0.0% 20.0% 77.0% 3.0% 0.0% 0.0% 0.0% 20-Mar-2019 (2019-Q1) 0.0% 8.0% 41.9% 45.0% 5.0% 0.1% 0.0% The table confirms that investors are now anticipating quarter point rate hikes in September 2018 and December 2018. In addition, as of the last week, investors are now also given just over a 50% probability that the Fed will again hike interest rates by another quarter point or more in March 2019 (as can be determined by adding the probabilities in the table cells highlighted in yellow for the Fed's March 2019 meeting). That assessment isn't just based on this data. It's also based in part from the news reports we reviewed during the third week of September 2018, where the following stories appeared noteworthy in describing the noise in the market. Monday, 10 September 2018 Oil steadies as U.S. inventory concerns curb gains S&P, Nasdaq edge higher after recent losses but Apple dragsEarlier headline: US STOCKS-S&P, Nasdaq edge higher on tax optimism despite Apple drag Tuesday, 11 September 2018 Oil rises as U.S. sanctions on Iran squeeze supply Wall Street gains as Apple, tech rebound; oil lifts energy shares Wednesday, 12 September 2018 Brent reaches $80 a barrel after fall in U.S. crude stocks Trump 'definitely' boosted U.S. growth, Fed's Bullard says Fed has room to raise interest rates for some time, Brainard says Fed says it whipped U.S. unemployment, maybe too well Dow, S&P 500 end up slightly after trade talk news; Apple slips China welcomes U.S. invitation for trade talks Thursday, 13 September 2018 Oil has steepest drop in a month as economic concerns threaten demand House panel backs bill to make Trump tax cuts permanent Impact of U.S. tax reform may last longer than expected: Fed's Bostic Atlanta Fed's Bostic: Rate hikes can continue for several more quarters Fed's Bostic says taking 'wait and see' attitude toward fourth 2018 rate hike Wall Street rises with Apple, easing trade concerns Friday, 14 September 2018 Oil mixed as China tariff talk scotches early rally Trump readies tariffs on $200 billion more Chinese goods despite talks: source Fed policy to turn mildly restrictive in 2019, Evans says Fed's Evans says premature to read much into yield curve Fed's Evans sees one or two more rate hikes this year Yellen: Fed should commit to future 'booms' to make up for major busts Wall Street flat as looming tariffs offset gains in financials For additional aspects of the week's economics and markets-related news, be sure to check out Barry Ritholtz' list of the positives and negatives he found in the week's data.

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14 сентября 2018, 11:15

Philly's Soda Tax Impact on City's Calorie Consumption

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How much of a health benefit can you get for the public by imposing taxes on products like sugary soft drinks? Advocates for soda taxes frequently cite positive health benefits as the reason for why governments should impose this kind of sin tax on the distribution and sale of sugary beverages to consumers within their jurisdictions. In doing so, many claim that such a tax would fix what in economics is called a "negative externality", which in this case, represents higher costs to public health systems for treating conditions such as obesity and diabetes, where sweetened beverages are targeted by soda tax advocates for their contributions to the problems they proclaim because of their popularity and their sugary calorie content. But for such an argument to be valid, the imposed tax would have to realistically achieve its desired aims without any unintended consequences that create new costs or other problems that offset any of the realized benefits. Since soda taxes have only been applied in a limited number of jurisdictions in recent years, the data available to assess their impact is relatively limited, so many of these advocates' claims of achievable health benefits have not been able to be challenged. We do however have evidence from what happened in Philadelphia during the first year of that city's experience with its controversial 1.5-cent-per-ounce soda tax, which it calls the "Philadelphia Beverage Tax". Using monthly tax collection data compiled by the Philadelphia Department of Revenue, and the city's expectation for what would be its annual revenue from the tax and its predicted reduction in sweetened beverage sales, we are able to identify the amount of soda that was distributed for sale in Philadelphia in 2017 and also how much city officials believe would have been distributed in the absence of its soda tax. The following chart shows those results. In the next chart, we've simply tallied up the monthly data for the number of ounces of sweetened beverages subject to the Philadelphia Beverage Tax to get the picture for the quantity of beverages that would have been distributed for sale in the city without the tax and also the amount of what was actually distributed in the city after the tax was imposed on 1 January 2017. In this second chart, we see that the Philadelphia Beverage Tax reduced the amount of diet and regular sweetened beverages in the city by the equivalent of 3.182 billion ounces in 2017, which is quite a lot, but should be expected to happen whenever a tax imposed by a government causes the price of a product that consumers buy to increase substantially. From here, we'll need to do some math to estimate how much that works out to be in potential calorie reduction. So we built a tool to do that math! The following tool will estimate the reduction in consumed calories from the implementation of the Philadelphia Beverage Tax on a per capita basis, where we've added a factor to account for the share of non-diet "regular" beverages that are consumed each year, since these are where the vast bulk of the sugary calories are to be found. If you're reading this article on a site that republishes our RSS news feed, please click here to access a working version of this tool. If you would rather not click through, you can view a screenshot of the tool's results with the default data. Population and Beverage Distribution Data Input Data Values Population Change in Quantity of Beverages Distributed to Population [Ounces] Portion of Change Offset by Tax-Avoidance [%] Beverage Nutrition and Consumption Data Regular Soft Drink Calories per 12-Fluid Ounce Serving Market Share of Regular (Non-Diet) Beverage Consumption [%] Impact of Changes in Soft Drink Consumption Calculated Results Values Total Change in Calories Consumed per Capita per Year Average Change in Body Weight per Capita Using the default data in our tool, we find that the reduction in the amount of sweetened beverages distributed in Philadelphia would have been sufficient to reduce the weight of every man, woman and child in the city by five pounds, assuming that none of these people increased their consumption of other calorie containing beverages and foods, and also assuming that they didn't leave the city to buy sweetened beverages that were not subjected to the city's controversial soda tax, or acquired them from bootleggers who smuggled them in. We've already run the numbers for the increased calories of alcohol-based beverages sold within the city, whose sales surged during 2017, which totaled the equivalent of an additional 114 12-ounce containers of beer consumed by each Philadelphian over the year. Assuming 149 calories per container per person, the average Philadelphian consumed an additional 16,986 calories during 2017. With 3,500 calories corresponding to the gain or loss of a pound of body weight, that increased alcohol consumption would, when spread over every man, woman and child in the city, put an average of 4.9 pounds back onto the bodies of every Philadelphian! [In reality, a larger amount of weight would be gained by the legal drinking age portion of the city's population, but you get the idea....] When you consider that we haven't yet accounted for sweetened beverage consumers shifting their shopping to outside the city to avoid the Philadelphia Beverage Tax, or the smuggling of untaxed soda into the city for sale by bootleggers, it's pretty clear that Philadelphia's soda tax failed as meaningful health improvement measure for the city's population, where the average calorie consumption per capita almost certainly was either flat or rising during 2017. One detailed marketing study found that sales of sweetened beverages increased by anywhere from 5% to 38% depending on beverage type in Philadelphia's suburbs during the first five months the tax was in effect, but we don't know the net extent to which this increased sales volume of sweetened beverages not subject to Philadelphia's soda tax offset reduced sales in the city for the full year. In our tool, we initially set the default value of the tax avoidance factor to 0%, but we believe a conservative estimate would fall between 10% and 20% - you're more than welcome to substitute these percentages or your own estimate into our tool to take this particular factor more realistically into account. Update 12 October 2018: 10-20% proved to be a very conservative estimate - based on new information that was published after this article, the actual share may be in the ballpark of 59%-79%, where we would again seek to err toward the low side of the estimate. Other factors that we're not considering is the extent to which reduced soft drink consumption may have offset by purchases of bottled water and untaxed packets of sweetened drink powders, where consumers could blend their own calorie-rich sugary beverage. Likewise, we're also not considering whether consumers in the city, instead of buying taxed soda pop, instead opted to increase their consumption of any of the many inexpensive, calorie-laden treats that are exempt from Philadelphia's soda tax to satisfy their sweet tooth. Since reduced calorie consumption would have provided the primary health benefit of having imposed such a tax, the absence of any significant reduction would mean that no positive benefits through reduced medical costs for the treatment of excessive calorie consumption-related health conditions were realized on average among Philadelphia's population as a result of the city's soda tax. But then, since the Philadelphia Beverage Tax was never intended to improve the health of Philadelphians, this outcome should not be a surprise.

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13 сентября 2018, 11:31

Visualizing the U.S. Cumulative Distribution of Income in 2018

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The U.S. Census Bureau has published its annual report on Income and Poverty in the United States, which we've used to visualize the cumulative distribution of income for U.S. individuals, families and households in the following animated chart. The cumulative income data applies for the 2017 calendar year - if you're looking for income data for the 2018 calendar year, it will not be collected until March 2019 and will not published until September 2019. We set up the animation to present each of the frames for 7.5 seconds each, but if you'd prefer more time to inspect them, here are links to the static cumulative income distribution charts for U.S. individuals, families, and households. If you would like to estimate where you fall on the the income distribution spectrum in the U.S. using these charts, all you need to do is find your income on the horizontal axis, trace a vertical line up to where it intercepts the curve on the graph, then trace a horizontal line to the left side of the chart where you can roughly approximate your income percentile ranking on the vertical scale. But if you would like a more precise estimate, we have updated our "What Is Your Income Percentile Ranking?" tool with the 2017 income distribution data. Our tool can also estimate what your income percentile would have been in any calendar year from 2010 through 2016. Finally, if you would like more current estimates of median household income, we've been happy to accommodate your information needs since August 2017! We produced the chart above, covering through July 2018, just a few weeks before the Census Bureau published its annual report for 2017. If you've been following our series, you were not in any way surprised by what the U.S. Census Bureau reported for that year!

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12 сентября 2018, 11:06

Visualizing Trends in Major U.S. Household Expenditures

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How much, and on what, does the average American household spend each year? And how has that changed over time? The Consumer Expenditure Survey (CEX) for 2017 has been released, which provides the answers to these questions for each year from 1984 through 2017! Produced as a joint product of the U.S. Bureau of Labor Statistics and the U.S. Census Bureau, the CEX compiles the information collected through tens of thousands of surveys, diaries and interviews with by U.S. households, or "consumer units" as the BLS' data jocks affectionately calls them, which provides a tremendous amount of insight into how they allocate their limited resources. That data isn't just filed away. The results of each year's CEX are used to determine how to set the relative weightings of different types of expenditures within the Bureau of Labor Statistics' Consumer Price Index, which is used to estimate the rate of inflation in the U.S. economy. With that introduction now out of the way, let's visualize the major categories of U.S. household expenditures for each year from 1984 through 2017. The following chart shows the average amount that some 130 million American household consumer units have collectively spent on things like housing, transportation, food, financial products, health care, clothing, entertainment, charitable contributions, and education. In the next chart, we show all those same expenditures, but this time as a percent of the average annual expenditures of a U.S. household/consumer unit: Finally, we'll present an update to one of our favorite charts that we've ever made showing how all these expenditures fit together as a percentage share of all expenditures. Here, the expenditures shown on the bottom of the chart (in shades of purple) show those expenditures whose share among the total has increased over time, while the expenditures shown toward the top of the chart (in shades of green) show the household expenses shose share has fallen. Here's the list of major categories of consumer expenditures whose share has risen from 1984 through 2017: Housing Financial Products (Life Insurance, Pension Savings, Social Security) Health Care (Health Insurance and Medical Expenses) Charitable Contributions Education And here's the list of major categories of consumer expenditures whose share has declined over the 34 years for which the data is available: Apparel and Other Products Food and Alcoholic Beverages Transportation Entertainment Data SourcesU.S. Bureau of Labor Statistics and U.S. Census Bureau.  Consumer Expenditure Survey.  Multiyear Tables.  [PDF Documents: 1984-1991, 1992-1999, 2000-2005, 2006-2012, 2013-2017]. Reference Directory: https://www.bls.gov/cex/csxmulti.htm. Accessed 11 September 2018. 

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11 сентября 2018, 11:09

Dividends by the Numbers for August 2018

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Standard and Poor's market attributes report came out a bit late this month, but with its release, we find that like the previous month, August 2018 has been a fairly solid month for the U.S. stock market. The following chart shows the number of dividend increases and decreases that have been declared in each month since January 2004. Let's run through the U.S. stock market's dividend numbers for August 2018: 3,552 firms issued some kind of declaration about their dividend policies during August 2018, which was up by 299 from the 3,253 that issued annoucements about their dividends in the previous month, and also up by 98 from the 3,454 that declared dividends in August 2017. August 2018 had 31 U.S. firms announce that they would pay an extra, or special, dividend to their shareholders, which was up by from the 22 that make special arrangements to pay the owners of their stock in July 2018, and up by 6 from the number that did in the same month a year ago. If there was disappointing news to be found for the month, it was in the 128 companies that announced they would increase their dividends in August 2018. This figure was down by 46 from the number that announced dividend rises in July 2018, but was down by just 4 from the figure recorded in August 2017. The best news of the month was that there were only 15 U.S. companies announcing dividend cuts in August 2018, which was eight less that the amount cutting dividends in July 2018 and one less than in August 2018. In fact, August 2018 saw the lowest number of dividend cuts reported since April 2017's total of 14. Just 2 firms declared that they would omit paying dividends, up from July 2018's null entry and down by 13 from August 2017. Because it was such a good month from the perspective of dividend cuts, and also from the perspective of omitted dividend payments, we put together the following chart showing the combined total of each, which provides a pretty good picture of the overall level of distress within the publicly-traded portion of the private sector of the U.S. economy, and as it happens, when infrequent changes in U.S. tax laws affect how companies set their dividend paying policies. We're afraid that we don't have any details on which firms omitted paying dividends during the month, but we were able to identify 12 of the 15 companies that announced dividend reductions, which can provide some insight into what sectors of the U.S. economy are potentially experiencing at least some level of distress. Carlyle Group (NYSE: CG)  R.R. Donnelley & Sons (NYSE: RRD)  Sabine Royalty Trust UBI (NYSE: SBR)  Farmland Partners (NYSE: FPI)  New Senior Investment (NYSE: SNR)  Orchid Island Capital (NYSE: ORC)  Marine Petroleum Trust (NASDAQ: MARPS)  Permian Basin Royalty Trust (NYSE: PBT)  PermRock Royalty Trust (NYSE: PRT)  Cross Timbers Royalty Trust (NYSE: CRT)  Annaly Capital Mgmnt (NYSE: NLY)  Spirit Realty Capital (NYSE: SRC)  Of the 12 dividend cutting firms in our sample, half are either financial firms or real estate investment trusts, five are monthly dividend paying firms out of the oil and gas sector whose dividend payouts are a fixed percentage of their variable earnings, and one, R.R. Donnelley & Sons, makes money in the business services and marketing industries. Update 14 September 2018: A very knowledgeable reader reports that Annaly Capital Management doesn't properly belong in this tally, writing that "NLY is not a dividend cut. Since the merger with MTGE the dividend was split. NLY dividend still 0.30 for the quarter; paid September (0.222) and October (0.078) of this year. This fakes out a lot of data gathering tools." Data SourcesStandard and Poor. S&P Market Attributes Web File. [Excel Spreadsheet]. Accessed 7 September 2018. Seeking Alpha Market Currents. Filtered for Dividends. [Online Database]. Accessed 3 September 2018. Wall Street Journal. Dividend Declarations. [Online Database]. Accessed 3 September 2018.

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10 сентября 2018, 11:16

The S&P 500 Backs Off Its Record High in Week 2 of September 2018

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The S&P 500 (Index: SPX) declined during the second week of September 2018, where the prospects for escalating interest rates in the U.S. and for tariffs to negatively impact the earnings of the S&P 500's largest component closed the week on a low note. While news related to the increased likelihood of rate hikes continuing longer than had previously been expected was spread out over the week, the trade news was concentrated on Friday, where ZeroHedge captured the negative sentiment from the market's reactions to the day's trade-related news the way that only the Tylers can. And yet, the damage to the overall S&P 500 wasn't as bad as it could have been, with the magnitude of the daily negative changes falling well within the market's typical day-to-day volatility. Unless something changes dramatically before the end of Tuesday, 11 September 2018, the redzone forecast that we first introduced back on 13 August 2018 is set to expire without the trajectory of the S&P 500's daily closing value having fallen anywhere outside of it while it ran. When it does expire, we anticipate that the level of the S&P will be consistent with investors looking forward to the future quarter of 2019-Q1. At least, in the absence of a news or noise event that might prompt them to suddenly focus on another point of time in the future and the expectations associated with it as they go about setting current day stock prices. As for what might influence investors to shift their forward-looking focus, here are examples of kinds of things that we look for from the news of the Labor Day holiday-shortened second week of September 2018. Tuesday, 4 September 2018 Oil steady ahead of Storm Gordon; weighed by dollar, Cushing build Amazon touches $1 trillion, on pace to overtake Apple Facebook, Nike drag Wall Street lower; trade concerns linger Facebook shares fall after downgrade on 'toxic brew' of slowing sales growth and regulation risk Nike shares dip as Kaepernick ad spurs boycott Wednesday, 5 September 2018 Oil falls more than 1 percent as storm fears ease, demand concerns mount Fed's Bullard makes case again for halting interest rate rises Fed's Bullard says timely to reassess balance sheet size Nasdaq falls as U.S. lawmakers grill Facebook, Twitter executives Thursday, 6 September 2018 Fed likely to need to hike rates 'a bit beyond neutral': Evans NY Fed's Williams says economy 'as good as it gets' for U.S. central bank Possible yield curve inversion not deciding factor in rate debate: Fed's Williams Fed's Rosengren calls for better ammunition for downturns Meanwhile, some QE hobbles on... U.S. Fed buys $1.8 billion of mortgage bonds, sells none Trade jitters and tech woes weigh on S&P, Nasdaq Friday, 7 September 2018 Oil falls with weaker equities, stronger dollar U.S. job growth surges; annual wage growth largest since 2009 Cleveland Fed's Mester: Wage bump signals Fed, economy on track Fed's Loretta Mester Says Strong Economy Supports Further Rate Hikes Fed's Kaplan sees 2019 as decision time on rate hike path Fed's Kaplan: too early to decide when to end rate hikes Wall Street drops on tariff worries, with Apple in crosshairs Trump says has tariffs ready for further $267 billion worth of Chinese imports Apple says proposed tariffs to hit a range of products Meanwhile, the week's trade data and President Trump's threats of new tariffs both made the negative side of the ledger in Barry Ritholtz's succinct summary of the positives and negatives in the week's broader news of the economy and markets.

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07 сентября 2018, 11:00

A Universal Pattern in Math, Biology and Physics

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What do the eyes of chickens, the nuclei of uranium atoms, the distribution of prime numbers and the profit maximization scheme of Cuernavaca, Mexico's bus drivers have in common? Quanta kicks off the second season of its video series In Theory with the surprising universality of a mathematical pattern hidden within all these things! The emergence of a pattern of universality between random and ordered systems will often represent an optimized solution for a hybrid system where complex interactions are involved, which can have immense practical applications. For example, it is the sort of thing that might be used in setting adequate staffing levels for more rapidly processing international travelers through an airport's immigration customs facility. Or to accurately predict whether social conflicts may arise in a public setting. Or in the case of artificial intelligence, to replace the Cuernavaca bus drivers' spies in developing more responsive methods for setting bus stop arrivals and departures. Or if you really want to go out on the edge, where the "disordered hyperuniformity" discovered in chicken retinas is being applied in newly developed materials that may be "potentially useful for energy-saving materials that prevent heat accumulation by allowing the free transmission of infrared radiation", which would lead to more efficient batteries among other real-world applications.

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06 сентября 2018, 11:00

The Impact of the U.S.-China Trade War on Their Trade to Date

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According to the U.S. Census Bureau, the United States' trade deficit with China hit a record high in July 2018, with U.S. imports of Chinese goods rising year over year and Chinese imports of U.S. goods falling over the same period. The following chart shows what the year over year growth rate of trade in goods and services between the two nations looks like after adjusting for the relative value of the exchange rate between the U.S. dollar and Chinese yuan. In the absence of its strategy to minimize its economy's intake of U.S. goods and services, the near-zero growth rate of China's imports of U.S. goods in July 2018 would be consistent with recessionary conditions being present in that country, which was certainly suggested in early 2018 prior to the implementation of any new tariffs being imposed by either nation on the other's goods. However, since China's political leaders have adopted that strategy, it is contributing to the appearance of slow growth in China's economy from this particular data series. We can however use that data to get a sense of the extent to which the tit-for-tat tariffs that both nations have imposed on each other since the trade war between them began after mid-March 2018 by looking at the combined value of the U.S.' imports to and exports from China, where we can use the trend established in the months before any tariffs were first imposed as a counterfactual to tell us what the value of trade would be in the absence of their budding trade war with each other. The following chart shows the combined value of that trade from January 2008 through July 2018, with the counterfactual shown as a projection of the linear trend that was established in the trailing twelve month average of the monthly data over the period from March 2017 through March 2018. Based on this very simple counterfactual, we think that in the absence of the U.S.-China trade war, the combined monthly value of goods and services traded between the two nations would be roughly $1 billion, or 2%, higher through July 2018 that what actually has been recorded. Assuming that China's organic economic growth hasn't itself also slowed, which is a real possibility. ReferencesBoard of Governors of the Federal Reserve System. China / U.S. Foreign Exchange Rate. G.5 Foreign Exchange Rates. Accessed 5 September 2018. U.S. Census Bureau. Trade in Goods with China. Accessed 5 September 2018.

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05 сентября 2018, 11:30

Between Order and Chaos in the S&P 500

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Since December 1991, the S&P 500 has gone through 10 distinct periods of order and chaos when measured against the index' trailing year dividends per share.... Now for the latest trillion dollar question: Is the current trend, which we're marking from April 2016 onward, made up of one period of order, or two? Better still, is the inflation and deflation of what we've identified as the Corporate Tax Cut Speculative Bubble of September 2017 through April 2018 a simple disruptive event within a longer period of order, like the Apple Dividend Speculation Bubble of January 2012 through May 2012, or is it a harbinger of a breakdown in order, like the chaotic period that took hold after December 2007? Which option do you hope is the answer?

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04 сентября 2018, 11:23

New Record Highs for S&P 500 in Final Week of August 2018

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The S&P 500 (Index: SPX) continued setting new highs during the fifth and final week of August 2018, with its highest closing value to date set at 2,914.04 on Wednesday, 29 August 2018. The index went on to finish the week slightly lower at 2,901.52. The recent uptrend in stock prices has lifted the trajectory of the S&P 500 toward the upper end of our redzone forecast, which has just five trading days left to run. Overall, we think that investors are splitting their forward-looking focus between 2018-Q4 and 2019-Q1 in setting today's stock prices, which we think will continue in the absence of news that might more definitively focus their attention on one of these points of time in the future. As for what news might be behind the market's recent upward momentum, here are the headlines that we weighted more heavily for their effect upon investor outlook in Week 5 of August 2018. Monday, 27 August 2018 Oil gains, supported by rising stock market, U.S.-Mexico trade deal U.S., Mexico reach NAFTA deal, turn up pressure on Canada S&P 500, Nasdaq hit new highs on U.S.-Mexico trade deal Tuesday, 28 August 2018 Oil dips on profit-taking, trade deal limits decline Wall Street ekes out gains as Canada takes trade spotlight Wednesday, 29 August 2018 Oil rises to multi-week highs on U.S. stock draw, falling Iran exports Wall Street extends rally, tech leads S&P, Nasdaq to record highs Thursday, 30 August 2018 Crude rises to highest since July on sanction concerns Trump threatens to withdraw U.S. from World Trade Organization: Bloomberg Trump says he could link cap gains taxes to inflation: Bloomberg U.S. stocks drop on fear of escalated trade spat; Argentine peso roiled Friday, 31 August 2018 Oil slips as trade war worries outweigh Iran sanctions U.S. to move ahead with Mexico trade pact, keep talking to Canada Wall Street mixed as U.S.-Canada trade talks end Meanwhile, since that's not all of the news of the week that was, Barry Ritholtz identified more positives than negatives in the economy and markets news for the week ending August 2018. Hope you all had a great Labor Day holiday weekend - it's time to buckle up for fall!

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31 августа 2018, 11:00

July 2018 Median Household Income

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Median household income in the United States rose to $62,450 in July 2018, with Sentier Research reporting a 0.4% increase over its June 2018 estimate of $62,175. The following chart shows the nominal (red) and inflation-adjusted (blue) trends for median household income in the United States from January 2000 through July 2018, as given by Sentier Research's monthly estimates. The inflation-adjusted figures are presented in terms of constant July 2018 U.S. dollars. U.S. median household income is setting new monthly records in both nominal and real terms. In July 2018, it is also now seeing some of its fastest-on-record nominal year-over-year growth rates. Our second chart shows that data from January 2001 through July 2018. The nominal rate of year over year growth for median household income has reached 5.6% in July 2018, which ranks fifth for the monthly data we have going back to January 2001. The inflation-adjusted year-over-year growth rate of median household income was also up for July 2018. Analyst's NotesOur alternative method for estimating median household income turned in a preliminary figure of $62,152 for July 2018, within 0.5% of Sentier Research's Current Population Survey-based estimate. This figure is up from the $61,891 preliminary figure that we had previously reported for June 2018, which we would revise upward this month to be $61,929. The BEA's monthly revision of its personal income data affected data from January 2018 through June 2018. Looking forward, September 2018 will be another big month on the U.S. income data calendar, with the U.S. Census Bureau set to publish its annual income figures for the 2017 calendar year, following months of compiling and analyzing all the income data that it collected through the Annual Social and Economic Supplement of its Current Population Survey in March 2018. Data SourcesU.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Population. [PDF Document, Online Database (via Federal Reserve Economic Data)]. Last Updated: 30 August 2018. U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Compensation of Employees, Received: Wage and Salary Disbursements. [PDF Document, Online Database (via Federal Reserve Economic Data)]. Last Updated: 30 August 2018. U.S. Department of Labor Bureau of Labor Statistics. Consumer Price Index, All Urban Consumers - (CPI-U), U.S. City Average, All Items, 1982-84=100. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 10 August 2018. ReferencesSentier Research. Household Income Trends: January 2000 through May 2017, March 2018 through July 2018. [Excel Spreadsheet with Nominal Median Household Incomes for January 2000 through January 2013 courtesy of Doug Short]. [PDF Document]. Accessed 24 August 2018. [Note: We've converted all data to be in terms of current (nominal) U.S. dollars to develop the analysis presented in this series.]

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30 августа 2018, 10:51

Midsummer Scenes from the U.S. New Home Market

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We're going to tell the story of the United States' new home market primarily through pictures today, where our first chart visualizes the median and average sale prices of new homes in the U.S. from January 2000 through the just-reported preliminary data for July 2018. There's quite a bit of month-to-month volatility in the sales price data, but what we find is that both median and average new home sale prices peaked in December 2017, where they have run under those record values in the months since. In our next picture, we're going to present the trailing twelve month average of the median new home sale price data, which will smooth out some of that month-to-month volatility, which we'll plot against the trailing twelve month average of median household income over the period from December 2000 through July 2018. Visualizing the data this way, we can see that the trailing year average of median new home sale prices has been largely flat since April 2018, even though median household incomes have been rising. What that tells us is that the median new home sold in the U.S. is becoming relatively more affordable for the typical American household. We can confirm that observation in our next chart, which shows the ratio of the trailing twelve month averages of median new home sale prices and median household income, where we're showing annual data going back to 1967, and monthly data since December 2000. The combination of a flat trend for median new home sale prices with a rising trend median household incomes means that the typical new home sold in the U.S. has become slightly more affordable for the typical income-earning American household. We should also recognize that ratio remains at a highly elevated level, where new homes overall are considerably less affordable than have been historically. The data we've presented represents national level data for the United States. Real estate is all about location, location, location, so regional markets can experience very different trends. As an example, check out the California Association of Realtors' July 2018 housing market update, where we find that median housing prices in the state (covering both existing and new housing units) have been rising, although with falling sales volumes, as shortage conditions continue to play havoc in that state's real estate markets.