“The Institute for Supply Management (ISM) said its index of national factory activity fell to 49.5 in November from 51.7 the month before. The reading was shy of expectations of 51.3, according to a Reuters poll of economists...A reading below 50 indicates contraction in the manufacturing sector, while a number above 50 means expansion.”
Story at… http://www.cnbc.com/id/100270379
US ECONOMY JOINED A GLOBAL
ECONOMIC DOWNTURN (JOHN HUSSMAN, PhD)
“With industrial production,
capacity utilization, real disposable income, real personal consumption, real
sales retail and food service sales, and real manufacturing and trade sales
uniformly declining in their latest reports, coincident economic indicators –
having generally peaked in July – are now following through on the weakness
that we’ve persistently observed in leading economic measures. We continue to
believe that the U.S. economy joined a global economic downturn during the
third quarter of this year…”
“...Interestingly, the past
several weeks have seen a noticeable spike in new claims for unemployment, with
the 4-week average surging to 405,000 from about 360,000 before the storm. Of
course, this spike has been quickly dismissed as being a “distortion” due to
Hurricane Sandy, with the implication that the spike should be ignored. The
problem here is that Sandy very clearly would be expected to affect the
week-to-week distribution of new claims, but Sandy does not explain the
increase in the average level of claims…That’s not a “distortion” –
those are incremental job losses. – John
P. Hussman, PhD, Weekly Market Commentary, 3 Dec 2012 at… http://www.hussmanfunds.com/
Not everyone agrees with
John Hussman. I noted in my last blog
post that the market isn’t pricing in a recession – if anything it seems to be
pricing in the opposite – cyclical growth!
I’ll be watching to see if that trend continues. In the meantime, here is a really good
discussion of the perils of calling a recession too early and then sticking
with the call in spite of evidence to the contrary.
“BEING EARLY AND WRONG ON
THE SUBJECT OF RECESSIONS…”
By Chris Puplava (December
1, 2012)“…some like David Rosenberg, as noted by Business Insider, will pick on a particular data set like CAPEX…or, for example, the Economic Cycle Research Institute (ECRI), which points to a peak in coincident data…to support their views, there are plenty of other figures that show there is no imminent threat of a recession. More importantly, the final arbiter of determining if one is right or wrong, the market, shows no imminent threat either.”
“…What
the market IS
doing is far more important
than what you think the market SHOULD
be doing. Right
now the message of the stock markets, credit markets, and economy is this,
"THERE IS NO NEAR-TERM RECESSION OR BEAR MARKET!" Full story at Advisor Perspectives,
dshort.com…
http://advisorperspectives.com/dshort/guest/Chris-Puplava-121201-Being-Early-and-Being-Wrong.php
MARKET
RECAP
Monday the S&P 500 fell
about 0.5%, to 1409 (rounded). VIX rose
about 5% to 16.64.
NTSM
The
NTSM analysis remained HOLD Monday.MY INVESTED POSITION
Based on the SELL signal, 7 November 2012, I moved out of the stock market at 1377 on the S&P 500. Because of the extreme negativity I have noted from Hussman and others, I am currently invested in a range of near 15% invested in stocks and I am still holding short positions.
