“Americans are snapping up new cars and trucks at the fastest rate in a decade, but cheaper gas prices led to the smallest increase in consumer spending in September in eight months. Consumer spending rose a seasonally adjusted 0.1% last month to mark the smallest gain since January…At the same time, though, the government said income growth also slowed. Personal incomes rose just 0.1% in September, the slimmest gain since March.” Story at…
http://www.marketwatch.com/story/consumer-spending-slows-for-a-good-reason-2015-10-30
My cmt: If gas is cheaper, we pay less for gas (duh) and the Personal Spending stat goes down. At least so it would seem. That doesn’t explain why personal income only rose 0.1% - the same as spending. The is a good-news/bad-news story.
CHICAGO PMI (Briefing.com)
“The Chicago PMI increased to 56.2 in October from 48.7 in September.” Charts and commentary at…
http://www.briefing.com/Investor/Calendars/Economic/Releases/chi.htm
My cmt: This is a good number and the trend is now up with higher highs and lower lows. It’s a regional number so it will be interesting to see if this foreshadows national improvement.
MICHIGAN SENTIMENT (Bloomberg)
"Consumer sentiment rose less than forecast in October as Americans viewed buying conditions as less favorable than they did earlier in the month. The University of Michigan’s final index for the month increased to 90 from 87.2 in September.” Story at…
http://www.bloomberg.com/news/articles/2015-10-30/consumer-sentiment-in-u-s-rose-less-than-forecast-in-october
NXP SEMICONDUCTORS GOT CREAMED THURSDAY - DOWN 20%
NXPI is 35% off its highs. NXP provides chips to APPLE and has the technology that enables pay-by-phone at the cash register so it has been a Wall Street darling. They also make chips for cars and other electronics. I am interested because I sold NXPI back in July at a profit at $97. It is also interesting because the company’s statement hints at broader problems for the economy. Here’s their statement:
"As we entered the third quarter, we noted a weakening of demand as our customers began to communicate concerns with an uncertain economic environment…As the third quarter progressed, our end-customers, across multiple end-markets continued to voice an increased and significant degree of uncertainty around any increase in demand. This has resulted in lower than planned sell-through and an increase of channel inventory. As a result, our guidance for the fourth quarter reflects a much more cautious view of near term sales which may occur during the quarter." A story on this is located at…
http://www.thestreet.com/story/13344469/1/here-s-why-gopro-and-nxp-plunged-today-tech-roundup.html?puc=yahoo&cm_ven=YAHOO
MARKET REPORT / ANALYSIS
-Friday, the S&P 500 was down about 0.5% to 2079 at the close.
-VIX was rose about 3% to 15.07.
-The yield on the 10-year Treasury dropped slightly to 2.15%.
This market continues up, but I am committed to waiting for a better buy point. This may just lead to more missed opportunity, but there is no point in worrying – I’ve become a bear at least for the near term. I’ll post a bit more on this later. The S&P 500 is about 1% above its 200-dMA of 2062. Let’s see if that can hold.
Longer term, I am becoming increasingly concerned about the appearance of the charts, company revenue and earnings weakness, and deterioration in economic conditions. The 50-dMA of Breadth (%-advancing on the NYSE) peaked at 55.8% on 2 March 2015 at the high. The Index only managed to claw about 1% higher after that peak (in May of 2015), but the 50-dMA had dropped to 52.6% at the new high on the S&P. We need to watch for Breadth improvement or THE TOP may be in.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) fell to 50.6% Friday vs. 51.2% Thursday. (A number above 50% is usually GOOD news for the markets. On a longer term, the 50-day moving average of advancing stocks rose to 51.7%. The McClellan Oscillator (a Breadth measure) remained Positive Friday.
New-highs outpaced New-lows Friday. The spread (new-highs minus new-lows) was +16. (It was +38 Thursday.) The 10-day moving average of the change in spread was minus-2 Friday. In other words, over the last 10-days, on average; the spread has decreased by 2 each day. The internals switched to neutral on the markets; only Breadth remained positive.
NTSM
Friday, the NTSM long term indicator was BUY. Price, VIX and Volume indicators are positive. Sentiment is neutral. I am not following this guidance for the time being; I am waiting for a better entry point.
I will wait
before increasing stock holdings; I think there will be a better entry point.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
G-Fund (Cash, risk-free yielding 2.1% over the last 12-months): 70%
C-Fund (S&P 500): 15%
I-Fund (EFA): 15%
