The Conference Board’s Composite Index of Leading Economic Indicators increased 0.6% (4.0% y/y) during June following a 0.2% May gain, revised from 0.3%. It was the strongest increase since January. Three-month growth improved to 4.5% (AR) versus 3.5% in May.
Most of the component series contributed positively to the leading index last month, including an increased number of building permits, a higher ISM new orders index, a steeper interest rate yield curve, the leading credit index, improved consumer expectations for business & economic conditions and higher stock prices. More initial unemployment insurance claims contributed negatively and the workweek was stable.
The Index of Coincident Economic Indicators rose 0.2% last month (2.0% y/y) after an upwardly revised 0.3% May gain. The latest rise strengthened three-month growth to 2.5% (AR), its best since December.(…)
The Index of Lagging Economic Indicators also increased 0.2% during June following an unrevised 0.1% May uptick. Three-month growth held steady at 2.3%. A higher prime rate and a higher consumer installment credit/personal income ratio were offset last month by slower growth in the services CPI and fewer commercial & industrial loans outstanding.
The ratio of coincident-to-lagging indicators also is a leading indicator of economic activity. It measures excesses in the economy relative to its ongoing performance. This ratio has been fairly steady since early last year.
No signs of recession just yet as these Advisor Perspectives charts show. Looks more like a reacceleration than anything else.
AND NOW, THE MIDDLE MARKET REPORT
RSM US LLP (RSM) and the U.S. Chamber of Commerce have joined forces to present the RSM US Middle Market Business Index (MMBI)—a first-of-its-kind middle market economic index developed by RSM in collaboration with Moody’s Analytics. We publish the MMBI on a quarterly basis as a means to give voice to the middle market and raise awareness of this crucial, yet underrepresented segment of the economy.
The survey panel, the Middle Market Leadership Council, consists of 700 middle market executives, and is designed to accurately reflect conditions in the middle market. The data for each quarter are weighted to ensure that they correspond to the U.S. Census Bureau data on the basis of industry representation.
Middle market executives are asked a total of 20 questions patterned after those in other qualitative business surveys, such as those from the Institute of Supply Management and National Federation of Independent Businesses.
The RSM US Middle Market Business Index posted a high of 132.1 in the second quarter. This is the second consecutive record-high reading for the index and reflects underlying improvement in economic conditions during the past year, as well as strong corporate earnings and respondent expectations for significant tax reform and regulatory relief this year.
Based on our quarterly RSM US Middle Market Business Index, the labor market is far tighter than topline data implies. Middle market executives noted in a series of special questions that they intend to use above-market compensation, flexible schedules and opportunities for increased training with respect to recruitment and retaining workers. (…)
More importantly, 62 percent indicated they would turn to a greater integration of information technology to boost overall output per worker from their current workforce. (…)
The European Central Bank left interest rates and its quantitative easing programme unchanged at its July meeting, and also made no change to its forward guidance. (…)
As previous bouts of policy tightening in 2008 and 2011 were swiftly reversed, as the timing proved inappropriate, it’s no surprise that the ECB is in no rush to make the same mistake again.
With PMI survey gauges of both business activity and inflationary pressures falling in June, albeit still at historically high levels, the dovish stance becomes even more understandable. The softer survey data perhaps also helps explain why the ECB reiterated that it could increase its €60 billion per month asset purchases if the economy worsens. (…)
The chart below shows the “fiscal breakeven” for major oil exporters. Below these oil price levels, the governments of these countries run a deficit. This breakeven point has been moving lower for many exporters as their governments do some belt tightening. (The Daily Shot)
76 S&P 500 companies have reported, 74% beat rate with a +4.6% surprise factor.
Blended Q2 EPS: +8.6% on +4.6% revenue growth.
Trailing 12-m EPS: $125.01 per Thomson Reuters.
Short Sellers Give Up as Stocks Run to New Records Flummoxed by a rally that this week produced its 27th S&P 500 record of the year, investors are backing off bets that major indexes are headed downward.
Tech Is No Bubble, But the Stock Market Might Be Neither tech stocks nor mega-capitalization companies stand out as particularly frothy when looking at performance
(…) There could be an everything bubble lifting the entire market, but stock performance doesn’t suggest over-enthusiastic investors have inflated a tech bubble or even a broader bubble of disrupters. Yet.