“The Institute for Supply Management’s non-manufacturing index increased to 56, exceeding all forecasts in a Bloomberg survey, from a more than three-year low of 52.2 in June …“It’s a number suggesting moderate growth and that’s pretty much what we’ve seen, particularly on the spending side and the hiring side,” Julia Coronado, chief economist for North America at BNP Paribas in New York...“We do think the second half should be a bit stronger.”
http://www.bloomberg.com/news/2013-08-05/ism-non-manufacturing-index-increased-to-56-in-july-from-52-2.html
MORE ON JOBS (Bloomberg)
Employees took home less pay and worked fewer hours in
July and job growth was the weakest in four months…Payrolls rose by 162,000
last month, while unemployment dropped to 7.4 percent from 7.6 percent …[BUT]…(t)he
workweek on average was the shortest in six months and hourly earnings fell for
the first time since October.
“We are losing a bit of momentum in the labor
market,”said Gennadiy Goldberg, a New York-based strategist at TD Securities
Inc…Consumers really need to see wage growth to help accelerate their
spending.” Full story at…
http://www.bloomberg.com/news/2013-08-03/wages-fell-in-july-as-hiring-slowed-in-uneven-u-s-job-market.htmlIn the end…it’s all about profits.
FACTSET: EARNINGS – FEWER SURPRISES…REVENUES LAG
(FactSet)
“With 79% of the companies in the S&P 500 reporting
actual results, the percentage of companies reporting earnings above estimates
(73%) is in line with the four-year average, while the percentage of companies
reporting revenues above estimates (55%) is below the four-year average.”
“…In aggregate, companies are reporting earnings that are
2.2% above expectations. This surprise percentage is below the average over the
past year (4.3%) and the average over the last four years (7.0%). If this is
the final surprise percentage for the quarter, it will mark the lowest surprise
percentage since Q4 2008 (-62%).” Full
release at…
http://www.factset.com/websitefiles/PDFs/earningsinsight/earningsinsight_8.2.13
JEFF SAUT: MARKET TOP IS IN, BRACE FOR CORRECTION (Reiterating
a previous call)
"Between mid-July and mid-August I think the markets
are vulnerable to the first meaningful pullback of the year," says Saut in
the attached video. " [In the video he said, “I am pretty confident” of a
correction in that time frame.] That
said, confidence remains high that we are in the midst of a secular bull market
that has many years yet to run."
Beyond an extended run that's taken stocks 18% higher in 2013, Saut says
the technical picture is eroding, the economic data is flagging, stocks are in
a seasonally weak period, and there's a slew of economic data still to come
this week that he expects to be weak.”
Video at…http://finance.yahoo.com/blogs/breakout/market-top-brace-correction-jeff-saut-135324129.html
FLECKENSTEIN – 25% CRASH EXPECTED ANYTIME
“At some point the bond markets are going to say, ‘We are
not comfortable with these policies.’ Obviously you can’t print money forever
or no emerging country would ever have gone broke. So the bond market starts to
back up and the economy gets worse than it is now because rates are rising. So
the Fed says, ‘We can’t have this,’ and they decide to print more (money) and
the bond market backs up (even more)….All of the sudden it becomes clear that
money printing not only isn’t the solution, but it’s the problem. Well, with
rates going from where they are to 3%+ on the 10-Year, one of these days the
S&P futures are going to get destroyed. And if the computers ever get loose
on the downside the market could break 25% in three days.” Full story at…http://nationalforex.com/2013/07/30/bill-fleckenstein-says-25-stock-market-crash-expected-any-time/
6% TREASURY YIELDS? …MAY COME
SOONER THAN YOU THINK (CNBC)
“The Federal Reserve will lose control of interest rates
as the "great rotation" out of bonds into equities takes off in full
force, according to one market watcher, who sees U.S. 10-year Treasury yields
hitting 5-6 percent in the next 18-24 months.
“It is our opinion that interest rates have begun their
assent, that the Fed will eventually lose control of interest rates. The yield
curve will first steepen and then will shift, moving rates significantly higher,’
said Mike Crofton, President and CEO, Philadelphia Trust Company told CNBC on
Wednesday.” Story at…
http://www.cnbc.com/id/100926417
MARKET REPORT
Monday, the S&P was down 0.2% to 1707 (rounded).
VIX fell more than 1% to 11.84.Monday, the S&P was down 0.2% to 1707 (rounded).
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks
advancing on the NYSE is 47%. Usually a
value below 50% signals additional trouble for the markets. Only 41% of stocks on the NYSE were advancing
today (Monday), but the index only fell 2.5 points.
Perhaps the index will play catch-up tomorrow and drop some more.
New-high/new-low data is mixed. Overall, “Internals” remain negative (and
suggest further downside), but not by much.
The topping process is continuing and some retracement may be underway.
NTSM
Monday, the overall NTSM analysis was HOLD at
the close.
MY INVESTED POSITION
I remain about 20% invested in stocks as of 5 March (S&P 500
-1540). The NTSM system sold at
1575 on 16 April. (This is just another
reminder that I should follow the NTSM analysis and not act emotionally – I am
under-performing my own system by about 2%!)
I have no problems leaving 20% or 30% invested. If the market is cut in half (worst case) I’d
only lose 10%-15% of my investments. It
also hedges the bet if I am wrong since I will have some invested if the market
goes up. No system is perfect.
I am committed to this course of action…now, I think I just
need to be committed!
