There is been a lot of
speculation about what tipped the Fed to do QE3. Here’s good possibility: the Aruoba-Diebold-Scotti
Business Conditions Index, has been quite negative recently and is below levels
seen at the start of the last recession.
There is a slight uptick in the most recent data, so perhaps there is
hope after all.
Here’s what
the Fed has to say about its makeup:
“We construct the ADS Index using the latest data
available as of September 14, 2012. This includes
(1) initial jobless claims through the week ending
September 8, 2012,
(2) payroll employment through August 2012,
(3) industrial production through August 2012, (4) real personal income through July 2012,
(5) real manufacturing and trade sales through June 2012, and
(6) real GDP through the second quarter of 2012.
Gray shading indicates NBER-designated recessions. The limits used on the y axis reflect the minimum and maximum values of the index over its entire history.”
CHART FROM…
http://www.philadelphiafed.org/research-and-data/real-time-center/business-conditions-index/
MARKET
RECAP
Monday the S&P 500
finished down 0.31% to 1461 (rounded).
VIX rose 1/2% to 14.59.
NTSM
The
NTSM analysis remained BUY Monday.
MY INVESTED POSITION
Based on the BUY signal, 6
July, I moved back into the market on 9 July (after the weekend) at S&P 500
1352.
I currently have a 50%
stock allocation overall. For my age,
that is what most advisors recommend as a fully invested position, however, I
am normally much more aggressive. I have
less invested in stocks now because there’s a lot of risk.
