Monday, April 23, 2012

Monday Morning Economic Assessment

The US Industrial economy inched ahead again last week (if pipeline scheduling is correct), as consumption turned and added to its recent strength.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) rose for its third week in a row, rising to 122.6 (from last weeks revised 122.1). In its raw dailies (above) the week actually was quite soft throughout, with the "Official" index rising mainly due to a softer week dropping off the end of its moving average.

The Consumption Index broke its recent string of three consecutive down-weeks and advanced, edging up to 145.8 (from last weeks 145.5). In its dailies the measure appeared unusually steady and (overall) averaged about the same as the prior week.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index), continued its long-term decline.

Overall, however, the internals retain that "sickly" look that they have exhibited throughout 2012, and as we emerged from the Easter Holidays looked somewhat bland (neither good nor bad).

Very disappointing how that March consumer-surge was ignored by the industrial side of the flows... as if that consumer-optimism was wasted on the productive end of US society.

Did note a sharp weakening in refinery scheduling (more than seasonals would imply) over the week and (in the latest days preliminary flows) a bearish sharp tightening in food-group flows and sharp weakening in industrial flows, that (as I saw no news) I am hoping to be bad data that gets revised tomorrow.



-Robry825

Monday, April 16, 2012

Monday Morning Economic Assessment

The US Industrial economy pushed forward again last week (if pipeline scheduling is correct), while consumption continued to back away from its March surge.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) advanced for its second week in a row, rising to 122.0 (from last weeks 121.0). In its raw dailies (above) the week started firm on Sunday but quickly gave ground and finished off the week soft.

The Consumption Index declined (its third consecutive down-week) to 145.5 (from last weeks record 151.3). In its dailies the week started somewhat firm (to the previous week) but softened late.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index), continued its long-term decline.

The split between industrial bearishness and consumptive bullishness (that dominated 2012's first quarter) should be conducive to healthy (and growing) 1st quarter earnings, though the defensiveness (so evident in the industrial flows) looks to be trying to seep into equities.

A lot of uncertainty remains this week as we emerge from the cross-currents of the Easter-Holiday period to settle into trends as the workweek unfolds.




-Robry825

Monday, April 9, 2012

Monday Afternoon Economic Assessment

The US Industrial economy turned and advanced last week (if pipeline scheduling is correct), while consumption again backtracked off of its March surge.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) broke its string of four down-weeks in a row, rising to 121.0 (from last weeks 120.0). In its raw dailies (above) the week started strong (on the changeover to the 2nd quarter) and built on that strength as the week progressed.

The Consumption Index, conversely, declined (for its second week) to 151.3 (from last weeks record 155.6). In its dailies the week had a somewhat soft look but was much more stable than the prior weeks roller-coaster look.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index), continued its long-term decline.

A lot of uncertainty the next couple of weeks on the numbers in this report as we tread through the cross-currents of the Easter-Holiday period, as consumers jostle with seasonal norms and we just don't know what the consumers mood will be once the holiday is over and statistics can settle into trends.

Very much liked (however) the way the industrial gas-flows popped on the beginning of the second quarter (nice bounce in scheduling April first-on), and consumption and production are starting to (predictably) trend toward each-other.



-Robry825

Monday, April 2, 2012

Monday Morning Economic Assessment

The US Industrial economy declined again last week (if pipeline scheduling is correct), while consumption finally rolled over and joined in with the bearishness elsewhere.

The Production Index (In terms of its 28-day moving average of gas-flow scheduling into US industrial facilities) backtracked for its fourth week in a row, declining to 120.0 (vs last weeks 120.8), and is now at its lowest level since November 16rd (2011). In its raw dailies (above) the week started slightly firm early then softened midweek.

The Consumption Index also gave ground (breaking its prior string of four up-weeks in a row), declining to 155.6 (from last weeks record 160.3). In its dailies the week was dramatic, with the measure starting slightly soft (to the prior week) then plunging nearly 50% midweek.

The Inventories measure (the cumulative weekly difference between the Production Index and the Consumption Index), continued its long-term decline. The chart (above) this week was redrawn to cut the sensitivity to changes within the inventories measure.

The previous alarming growth (that gap between consumer-bullishness and industrial bearishness... worried about in last weeks economic post) is trying to resolve itself for the moment on the bearish side, and the next week will be crucial... especially given that we are passing through the first-quarter's end... a period of time when industrial books are closed on the quarter, and managers can reassess and change production (and purchasing) scheduling according to the newly-known prior quarters results.

The negatives in place (negative-economic-phase of production leading consumption, bearish food-group scheduling, listless steel-group scheduling, etc) are a grave threat to the economy.

One possibility of additional worry... that spike in paperboard scheduling might be indicative not of consumption at all, but merely a "bet" by retailers on a strong Easter Holiday... which may or may not materialize... based upon prior media bullishness which (so far) in 2012 has not been well-supported within the gas-flows.

If that were to be the case... than retail inventories are bloated and (if the consumer does not come in as anticipated) could produce a vicious snap-back.

Overall, I am still very worried and out of the markets in my trading accounts (though that is nothing to crow about so far as I have been out since the beginning of January) and recently (for the first time in years) toyed with a small short-position.

Next three weeks (as we proceed through the cross-currents of quarters-end and the Easter-holiday swings) will be crucial.



-Robry825