Sunday, August 7, 2016

MAD Weekly Review

It seems like the dog days of summer for sure.  Great breeze, sun, ice cold drinks, and plenty of time spent with family and friends.  Quietly things keep humming along economically. Although I wish I got that $400 million plane load of cash like the Iranians did to make my economy run a bit better!!!

Anyway let's get to it. The ISM Index and Services both came in above 50 this week with readings of 52.6 and 55.5 respectively. That's lower than prior readings of 53.2 and 56.5. Still these are quite adequate numbers.  Attentive readers may recall from last weeks Durable Goods down 4%, which might sound conflicting considering the ISM Index includes manufacturing. That's not exactly an apples to apples comparison as the ISM Index includes non-durable goods, and thus a broader manufacturing base. Still it's good to keep an eye on both numbers. Durable Goods are an essential part of the economy.

Construction spending notched down just a bit to $1.13 trillion(previously $1.14 trillion). I'd personally like to see some stronger numbers here.  Also note the difference between non-residential/residential spending. I adjusted the graph so it's indexed from the first time period available.

We are still a long way off from the peak in residential spending.  Fitting that commercial property did not participate in the bubble years to the same extent as residential.  Normally with commercial properties an analysis is done to determine ROI, IRR, etc. Not so much in the residential space when anyone breathing was getting a loan, or plunking down their hard earned cash at will. My real estate update will be completed soon. Did I mention we offer a complete Real Estate analysis to people interested in investment properties? You'll get an estimated P&L for 5 years, and all the major real estate metrics.

There was also a jobs report showing an Unemployment Rate below 5% still. The audacity!!! Don't these people know the jobs situation is horrible here? Additionally Average Hourly Earnings edged up another 0.3% to $25.69. Which means if you work a 40 hour week you can expect to be paid $53k for the year. Not bad.

Internationally the Bank of England increased it's bond buying program by 60 billion(GBP), and also announced they'd plan on buying corporate debt.  Additionally they cut their key rate by 0.25% to 0.25%.  

US stock markets continue to march higher. The market action this week looks like the S&P will continue to breakout to new highs. There is seemingly nothing that will get in the way of this bull right now so let's enjoy it for a bit. That's all for now!
IndexStarted WeekEnded WeekChange% ChangeYTD %
S&P 5002173.602182.879.270.46.8
Russell 20001219.941231.0911.150.98.4

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