“U.S. consumer spending was unexpectedly flat in April…The Commerce Department report on Monday also showed no inflation pressures, with a price index for consumer spending recording its smallest gain since late 2009 on an annual basis…Consumer spending in April was also curbed by weak demand for utilities as the temperatures warmed up….In April, personal income rose 0.4 percent after being flat the prior month.” Story at…
http://www.foxbusiness.com/economy-policy/2015/06/01/personal-income-rises-but-spending-flatlines/
ISM INDEX UP (NASDAQ.com)
“Economic activity in the manufacturing sector expanded in May for the 29th consecutive month, and the overall economy grew for the 72nd consecutive month, say the nation's supply executives in the latest Manufacturing ISM(R) Report On Business(R).” Press release at…
http://www.nasdaq.com/article/press-release-pmir-at-528-may-manufacturing-ismr-report-on-businessr-new-orders-production-20150601-00780
CONSTRUCTION SPENDING UP (Reuters)
“U.S. construction spending surged in April to the highest level in nearly 6-1/2 years as outlays increased broadly, pointing to some pockets of strength in the economy. Construction spending jumped 2.2 percent…” Story at…
http://www.reuters.com/article/2015/06/01/us-economy-construction-idUSKBN0OH2M420150601
MARKET REPORT
-Monday, the S&P 500 was up about 0.2% to 2112 at the close. (The close was disappointing since the Index faded about 0.3% late in the day.)
-VIX rose about 2% to 14.1 (nothing to fear here.).
-The yield on the 10-year Treasury Note rose to 2.18%.
The S&P 500 chart is not looking great now, but it has not broken below its lower trend line so the trend remains up. The problem is that it has not broken to significant new highs either, so the great stall is continuing. It’s going to break up or down. I’m guessing up, but it’s a guess.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) slipped to 46% at the close Monday. (A number below 50% is usually BAD news for the markets. New-highs outpaced New-lows Monday. The spread (new-highs minus new-lows) was +6. (It was -5 Friday.) The 10-day moving average of change in the spread rose to -6. In other words, over the last 10-days, on average; the spread has decreased by 6 each day.
Internals remain negative on the markets.
Market Internals are a decent trend-following analysis of
current market action, but should not be used alone for short term trading.
They are usually right, but they are often late. They are most useful when they diverge from
the Index. In 2014, using these internals
alone would have made a 9% return vs. 13% for the S&P 500 (in on Positive
out on Negative – no shorting). Of
course, few trend-following systems will do well in an extreme low-volatility,
nearly straight-up year like 2014.
NTSM
Monday, the NTSM analysis remained HOLD. PRICE is positive. VOLUME, VIX and SENTIMENT indicators are neutral, although (as always) sentiment remains extremely high.
MY INVESTED STOCK POSITION
I remain fully invested at 50% invested, mostly in smaller
cap-stocks in the long-term portfolio with some international stocks. 50% is
conservative, but appropriate for a conservative retired guy. The Dow Jones US Completion Index (all stocks except the S&P 500 – the “S” fund in the TSP) remains ahead of the S&P 500. Since 1 February it is 2.7% ahead of the S&P 500. Since 1 March the Euro-Pacific ETF (EFA) (“I”-fund) is 1.7% ahead of the S&P 500.
THRIFT SAVINGS PLAN (TSP) MEMBERS
My new TSP Allocation: 50%-G; 10%-C; 20%-S; 20%-I. (50% cash is too high for non-retirees, however, the “G”-fund did return 2.2% over the last 12-months and that is exceptional for risk-free money.)
