Research & Analysis

Chicago PMI Indicates Contracting Economy

The sugar high may be wearing off sooner then I expected.

A measure of U.S. business activity unexpectedly shrank in September, indicating companies are likely to limit spending and production.

The Institute for Supply Management-Chicago Inc. said today its business barometer decreased to 46.1, worse than the lowest estimate of economists surveyed by Bloomberg News, from 50 in August. Readings below 50 signal contraction.

Near-record excess capacity and gains in spending induced almost solely by government stimulus programs are likely to prevent companies from ramping up assembly lines. The manufacturing recovery may be uneven as federal assistance begins to wind down.…

1Oct2009 | The Real Deal | 0 comments | Continued

Four Big Economic Indicators to Watch

There are many items that influence the day-to-day moves in a stock, bond, or commodity’s price — earnings news, corporate financials, simple supply and demand, and a whole lot more. Heck, I’ve even read an academic study that argued the weather has a huge influence on whether markets close up or down!

But when it comes to figuring out the bigger-picture, longer-term moves for whole investment classes, there’s nothing better than watching a few key economic indicators.

And since this week is going to be a very busy one for data releases, I wanted to spend a little time today talking…

30Sep2009 | Money and Markets | 0 comments | Continued

Gold Continues to Underperform Against Related Assets

By: Lorimer Wilson
www.PreciousMetalsWarrants.com & www.InsidersInsights.com

In spite of the excessive, in-your-face, rhetoric in the hundreds, if not thousands, of newspaper and on-line articles this past week on gold bullion it does not warrant the hype – at least not yet. All one has to do is examine the performance of gold relative to the broad stock market indices and the various commodity-related indices to see that its rise above $1000/oz. is not really that impressive. Don’t get me wrong, I think gold has a very bright future but what has happened over the past week, other than the fact that it is closing…

14Sep2009 | Lorimer Wilson | 0 comments | Continued

Company Insiders are Telling You to Do This Now

Insiders are dumping shares at record pace.

So is it time to sell?

After all, no one knows a company better than insiders. They see the day-to-day operations, the sales figures, expenses, and everything else. They know their business better than anyone else. Their business is what they do every day.

So it makes sense to track when insiders are buying and selling their own shares. Buying is bullish and selling is bearish, right?

Well, it may be. But if we take a look at history, it’s not as clear cut as many analysts make it out to be. More importantly, the…

11Sep2009 | Q1 Publishing | 0 comments | Continued

Has the LEI Given an All Clear Signal?

Last Thursday the Conference Board released the July reading of its Index of Leading Economic Indicators (LEI). Year-over-year it was up by 0.2 percent. This is the first reading in the plus column since 2007.

So … what does this clear improvement tell us? How important is it? Does it give us an all clear signal that a strong recovery is on its way?

The LEI Is a Very Successful
Recession Predictor …

The LEI is the most successful recession predictor I know of. It has forecast every recession since 1960, an accomplishment the vast majority of well-known economists and the…

26Aug2009 | Money and Markets | 0 comments | Continued

Will Asia Unseat Detroit as Global Center of the Auto Industry

Asia is poised to become the “new” Detroit.

Here in the United States, at a cost of a mere $3 billion, the “Cash-for-Clunkers” program appears to have given new hope to the U.S. auto industry.

But that new hope is destined to be short-lived.

It’s true that – in terms of value delivered for the money invested – “Cash for Clunkers” has eclipsed every other stimulus program that has been tried. But the program has a projected lifespan of only three months, meaning it can’t reverse the powerful global forces that are destined to turn the U.S. auto market from leader to laggard…

19Aug2009 | Money Morning | 0 comments | Continued

Fast Track Profits in China

Understanding that high-speed rail (HSR) could provide millions of Americans with a cleaner, more efficient way to travel, President Barack Obama allocated $13 billion to its development over the next five years as part of the American Recovery and Reinvestment Act (ARRA) passed in February.

But Obama’s high-speed rail initiative has gotten off to a sluggish start, while a much bigger, $300 billion plan to create the world’s largest and most sophisticated high-speed rail network is already rapidly unfolding in China.

“Railroads were always the pride of America, and stitched us together. Now Japan, China, all of Europe have high-speed rail systems that…

18Aug2009 | Money Morning | 0 comments | Continued

U.S. Banking Stocks in 2009

Can U.S. bank stocks continue their winning streak?

In February, I analyzed the top 12 U.S. banks to determine whether they really needed $1.5 trillion in taxpayer-provided bailout capital. I concluded that only a few of those banks seemed to be in any danger of collapse, and actually recommended several.

Policymakers and the market later came to agree with me: The Standard & Poor’s 500 Financial Index has more than doubled from its March low and several bank stocks have posted triple-digit returns.

An April review of the first-quarter financial results of the top 13 U.S. banks (I added Fifth Third Bancorp (NYSE: FITB),…

30Jul2009 | Money Morning | 0 comments | Continued

Eight Consumer Confidence Catalysts You Need to Know About

Burned by credit defaults, unemployment, and fewer income gains, consumer confidence is tepid at best.

Despite a growing belief that the recession is at or near its nadir – and a string of upbeat corporate profit reports that have sent stocks up to their highest levels this year – consumer confidence dropped to its lowest level since April. According to the Reuters/University of Michigan Survey of Consumers, the final sentiment level for this month dropped to 66.0, down from 70.8.

"People are a little more worried about the economy, especially over the labor market and what’s happening in Washington,” David Wyss, chief…

28Jul2009 | Money Morning | 0 comments | Continued

Unemployment, Not the Stock Market, Distinguishes a Recession From a Depression

What are the most important and enduring characteristics of the Great Depression? And what should we monitor to determine how severe today’s situation really is?

The stock market will give important clues. But the economy, especially unemployment, defines depressions.

That should be obvious. However, after the stock market rallied off its March 2009 low, the media and many pundits seem to be fixated on the financial markets to determine the severity of the crisis and to call its end.

To see if the bulls’ hopeful thinking holds water, let’s go back to 1929 and have a look at the stock market’s behavior…

10Jul2009 | Money and Markets | 0 comments | Continued