This morning, the U.S. Department of Commerce reported that March factory orders rose 1.1% from February—more than the 0.6% expected. Good news? Not if you look back; March factory orders actually declined for the 17th consecutive month on a year-over-year basis, dropping 4.2% from a year ago.
As I reported last month, February’s Durable Goods report was extremely weak. Consequently, expectations were high for a March rebound but what we got this week in the March Durable Goods report was a bounce of just 0.8% month-over-month (M/M), missing expectations of a 1.9% surge. Dead cats bounce better than that.
We are watching the major stock indices flirt with new highs but not quite making them. Most players now seem to be thinking it’s only a matter of time. But the smaller companies may be telling us otherwise.
Market commentators are now embracing the idea that the S&Ps are going to new highs. The financial sector is the largest in the index. Simply put, there will be no new highs without the bank stocks. So, let’s look at how they are doing.
As I wrote back on March 26, there is no better indicator of the health of the US economy than housing. Not that it should be so important. But America is a consumer society and housing is the biggest ticket item there is for most people.
Retail sales numbers released today for March were down a disastrous -0.3% month-over-month. Usually, when you see a number this bad you also see an excuse. The most common excuse recently has been gasoline sales falling because gasoline prices have collapsed. Not this time, baby. Gasoline sales were up 0.9%–just about the only thing that was up.
Mainstream economists and TV talking heads tell us that the current slowdown in economic activity is ‘transitory’. Not to worry, they say, it’s just a slow patch.
Political commentators seem unable to understand why Bernie Saunders and Donald Trump have managed to tap into such rage among average American voters. The talking heads just assume the headline economic numbers reported by Wall Street are real. The economy is fine and getting finer, right? Wrong, and Americans know it.
By now you have probably heard of the latest sensation in the financial media—the so-called Panama Papers. It seems that 11.5 million files were leaked from the Panama-based law firm of Mossack Fonseca which purport to reveal the secret ownership of bank accounts and companies in 21 offshore jurisdictions.
Readers will be familiar with the GDPNow estimates published regularly by the Atlanta Federal Reserve. These estimates have been the most accurate out there, quarter after quarter. The latest forecast for Q1 GDP is just 0.4%, despite the most benign winter weather in decades.You may remember that the “polar vortex” phenomenon was said to have been the reason for lower GDP in Q1 of 2014 and even 2015. This year, you can expect that the unseasonal warmer weather will be the excuse for poor growth because it has suppressed parka sales and home heating and utility revenues. You heard it here first.