Retail Sales vs. Consumer Confidence; Unwarranted Fed Faith in Wrong Surveys

Retail Sales vs. Consumer Confidence; Unwarranted Fed Faith in Wrong Surveys

Conference Board Consumer Survey

The consumer conference board does a paper survey every month on consumer confidence.

The board’s technical notes say (emphasis mine) “The targeted responding sample size – approximately 3,000 completed questionnaires – has remained essentially unchanged throughout the history of the CCI.”

I called up the board with a simple question: How many surveys do you send out to get 3,000 completed questionnaires?

The very snooty person who answered the phone told me to look in the technical notes. However, the information isn’t there or I cannot find it. I had already read the technical notes before I called. Besides, my question was quite simple.

Retail Sales vs. Consumer Confidence

The Fed places a lot of faith in this survey. Yellen cites strong
consumer confidence frequently, as did Bernanke before her.

The numbers are out today. Consumer confidence is up. In general, confidence been high and rising for years.

Happy consumers are supposed to be shopping like mad, especially given the collapse in the price of gasoline.

Let’s investigate those theories from today’s Econoday Report.

Alleged ties of this survey to consumer spending appear to be a complete bunch of hooey.

I keep wondering if paper surveys are part of the problem. Are the people who respond to random paper surveys more likely to be happier than those who don’t?

New York Fed Survey

The New York Fed also does a survey. Every month, the New York Fed interviews a rolling group of 1200 people to produce a detailed Survey of Consumer Expectations.

Here are the results of the Fed’s latest survey.

One Year Look Ahead Household Spending Projections

click on chart for sharper image

Given the Fed places so much faith in various consumer confidence numbers, I have a simple question: Why don’t they believe their own survey?

Mike “Mish” Shedlock

Commodities Technical Analysis, October 24th — October 28th

Commodities Technical Analysis, October 24th — October 28th

The technical analysis, that includes the indicators’ data and major pivot points for WTI Oil, Gold, Silver and Copper as traded on spot market as of October 23rd, 2016:

Crude Oil

Indicators

Moving Averages RSI Parabolic SAR CCI
Long Neutral Long Neutral

Crude Oil - Indicators as of Oct 23, 2016

Floor pivot points

3rd Sup 2nd Sup 1st Sup Pivot 1st Res 2nd Res 3rd Res
46.73 48.10 49.48 50.85 52.23 53.60 54.98

Crude Oil - Floor pivot points as of Oct 23, 2016

Woodie’s pivot points

2nd Sup 1st Sup Pivot 1st Res 2nd Res
48.10 49.50 50.85 52.25 53.60

Crude Oil - Woodie's pivot points as of Oct 23, 2016

Camarilla pivot points

4th Sup 3rd Sup 2nd Sup 1st Sup 1st Res 2nd Res 3rd Res 4th Res
49.36 50.11 50.37 50.62 51.12 51.37 51.63 52.38

Crude Oil - Camarilla pivot points as of Oct 23, 2016

Fibonacci retracement levels

0.0% 23.6% 38.2% 50.0% 61.8% 100.0%
49.46 50.11 50.51 50.84 51.16 52.21

Crude Oil - Fibonacci retracement levels as of Oct 23, 2016

Gold

Indicators

Moving Averages RSI Parabolic SAR CCI
Short Neutral Long Long

Gold - Indicators as of Oct 23, 2016

Floor pivot points

3rd Sup 2nd Sup 1st Sup Pivot 1st Res 2nd Res 3rd Res
1229.53 1239.99 1253.45 1263.91 1277.37 1287.83 1301.29

Gold - Floor pivot points as of Oct 23, 2016

Woodie’s pivot points

2nd Sup 1st Sup Pivot 1st Res 2nd Res
1240.74 1254.94 1264.66 1278.86 1288.58

Gold - Woodie's pivot points as of Oct 23, 2016

Camarilla pivot points

4th Sup 3rd Sup 2nd Sup 1st Sup 1st Res 2nd Res 3rd Res 4th Res
1253.74 1260.32 1262.51 1264.71 1269.09 1271.29 1273.48 1280.06

Gold - Camarilla pivot points as of Oct 23, 2016

Fibonacci retracement levels

0.0% 23.6% 38.2% 50.0% 61.8% 100.0%
1250.46 1256.11 1259.60 1262.42 1265.24 1274.38

Gold - Fibonacci retracement levels as of Oct 23, 2016

Silver

Indicators

Moving Averages RSI Parabolic SAR CCI
Short Neutral Long Neutral

Silver - Indicators as of Oct 23, 2016

Floor pivot points

3rd Sup 2nd Sup 1st Sup Pivot 1st Res 2nd Res 3rd Res
16.84 17.07 17.30 17.53 17.76 17.99 18.22

Silver - Floor pivot points as of Oct 23, 2016

Woodie’s pivot points

2nd Sup 1st Sup Pivot 1st Res 2nd Res
17.07 17.30 17.53 17.76 17.99

Silver - Woodie's pivot points as of Oct 23, 2016

Camarilla pivot points

4th Sup 3rd Sup 2nd Sup 1st Sup 1st Res 2nd Res 3rd Res 4th Res
17.28 17.40 17.45 17.49 17.57 17.61 17.66 17.78

Silver - Camarilla pivot points as of Oct 23, 2016

Fibonacci retracement levels

0.0% 23.6% 38.2% 50.0% 61.8% 100.0%
17.30 17.41 17.48 17.53 17.58 17.76

Silver - Fibonacci retracement levels as of Oct 23, 2016

Copper

Indicators

Moving Averages RSI Parabolic SAR CCI
Short Neutral Short Neutral

Copper - Indicators as of Oct 23, 2016

Floor pivot points

3rd Sup 2nd Sup 1st Sup Pivot 1st Res 2nd Res 3rd Res
202.98 205.26 206.65 208.93 210.32 212.60 213.99

Copper - Floor pivot points as of Oct 23, 2016

Woodie’s pivot points

2nd Sup 1st Sup Pivot 1st Res 2nd Res
205.04 206.20 208.71 209.87 212.38

Copper - Woodie's pivot points as of Oct 23, 2016

Camarilla pivot points

4th Sup 3rd Sup 2nd Sup 1st Sup 1st Res 2nd Res 3rd Res 4th Res
206.01 207.02 207.36 207.69 208.37 208.70 209.04 210.05

Copper - Camarilla pivot points as of Oct 23, 2016

Fibonacci retracement levels

0.0% 23.6% 38.2% 50.0% 61.8% 100.0%
207.55 208.42 208.95 209.39 209.82 211.22

Copper - Fibonacci retracement levels as of Oct 23, 2016

If you have any questions or comments on this commodity technical analysis, please, feel free to reply below.

The Most and Least Reliable Car in Each Class

The Most and Least Reliable Car in Each Class

Reliability is an important consideration when purchasing a vehicle. Not only do reliable vehicles require less maintenance and therefore save time and money, but also they keep a higher resale value. According to Consumer Reports, 19% of new vehicles will have a reliability problem inside the first five years of ownership.

While some classes of vehicles tend to be more reliable than others, reliability can vary dramatically even within the same class. To determine the most and least reliable vehicles in each class, 24/7 Wall St. reviewed reliability ratings from Consumer Reports’ “Annual Auto Reliability Survey.” The ratings organization reviewed over the course of 16 years more than 500,000 vehicles to create a Predicted Reliability Score for the latest models. The score is based on 17 possible vehicle problems varying in severity from minor inconveniences to major flaws that often require expensive repairs.

The reliability ratings are on a 0 to 100 point scale. Of the 14 car classes reviewed by Consumer Reports, compact cars have the the widest reliability gap. While the Toyota Prius has a reliability rating of 94 — the best score of any vehicle — the least reliable compact car is the Ford Focus with a rating of only 6.

Click here to see the most and least reliable car in each class.

The largest difference in customer satisfaction in a single class is also between these two vehicles. While 88% of Toyota Prius owners are satisfied with their vehicle, this is true of only 55% of Ford Focus owners.

Some brands are consistently more reliable than others. Toyota and Lexus together hold the most reliable vehicle in nine of the 14 classes on this list. However, most brands have large variations in reliability between models. While the Ford Expedition is the most reliable large SUV, Ford also produces the least reliable vehicle in three of the 14 categories.

Generally, the most reliable vehicles in each class share a few common traits. While there are some exceptions, the most reliable vehicle tends to cost more than the least reliable vehicle in the same class. Also, the share of satisfied customers tends to be higher for the most reliable vehicles.

To determine the most and least reliable cars in 14 vehicle classes, 24/7 Wall St. reviewed the Predicted Reliability Score for each 2017 model in Consumer Reports’ “Annual Auto Reliability Survey.” The survey collected data from more than 500,000 vehicles for up to 16 model years to create a Predicted Reliability Score for each model. Satisfied owners is the share of current vehicle owners who would repeat the decision to buy their current vehicle if given the opportunity to decide again — also from Consumer Reports. Starting vehicle prices, or MSRP, are the current starting prices for the newest model year as listed on the manufacturer’s website at the time of this writing.

These are the most and least reliable cars in 14 different vehicle classes.

Price of Oil Softens Further

Price of Oil Softens Further

Price of Oil Softens Further

October 26, 2016

It appears that Russia will probably not join OPEC’s effort to cut production. In response, West Texas Intermediate crude oil fell another 1.4% to $49.25 per barrel.

Stocks in Europe and the Pacific Rim have performed weakly overnight, depressed by a number of weaker-than-expected corporate earnings reports.

  • Equities lost 1.5% in New Zealand and Australia, 1.2% in Hong Kong, 1.1% in South Korea, and 0.9% in India and Singapore, but Japan’s Nikkei closed up 0.2%.
  • In European trading so far, share prices have fallen 1.0% in the U.K. and Germany, 0.8% in Switzerland and France, 0.5% in Italy and 0.2% in Spain.

Gold is marginally lower at $1,272.10 per troy ounce.

Ten-year sovereign debt yields jumped six basis points in Great Britain and 5 bps in Germany. Futures trading points to an increase in the U.S. as well.

The dollar rose 0.3% against the euro overnight but lost 0.4% relative to the Australian currency, 0.3% vis-a-vis the Swissie, 0.2% against the yuan and sterling, and 0.1% versus the kiwi. Dollar/yen is steady.

A poll is out giving Trump a marginal lead in Florida, but Clinton still appears to have a comfortable national lead.

Australian consumer price data for the last quarter are higher than forecast, dampening prospects that the Reserve Bank of Australia  official cash rate might be cut further. The overall CPI rose 0.7% on quarter and accelerated to a 12-month 1.3% increase, same as in the first quarter, from 1.0% in 2Q. Measures of core inflation were the same in 3Q as in 2Q.

Japanese corporate service prices stagnated on month in September and were only 0.3% higher on year. The CSPI had risen 0.4% in the prior year to September 2015.

Japanese small business sentiment, measured by the Shoko Chukin index, increased to a 7-month high of 48.3 in October from 47.7 in September and 46.3 in August.

Industrial production in Singapore advanced for a second straight month, posting a buoyant 3.3% increase between August and September and surpassing the year-earlier level by 6.7%.

Chinese consumer sentiment according to the Westpac MNI measure printed 1.6% higher in October at a 6-month high of 117.1.

French consumer confidence climbed a point to a 5-month high of 98 in October.

But German consumer confidence fell 0.3 to 9.7 in November, a 6-month low.

German import price deflation narrowed to 1.8% in September from 2.6% in August and a recent lowpoint of -6.6% in the year to April. Energy prices fell 9.6% on year versus a drop of 11.7% recorded in the year to August. Non-energy import prices were 0.9% lower than in September 2014. Export prices in Germany dropped 0.6% in the year to September versus a 0.3% on-year rise in the prior year to September 2015.

Italian retail sales unexpectedly slipped both on month (0.1%) and from a year earlier (0.2%) during August.

The British Bankers Association estimate of U.K. mortgage approvals in September rose to a 3-month high of 38,252. Net mortgage lending was 2.6% lower than a year earlier, but consumer credit growth continues on its best trend since the Great Recession.

Norway recorded an SEK 3.2 billion trade surplus in September, but the year-to-date tally remains in the red.

Icelandic unemployment edged higher in September but remained low at 3.2% on a seasonally adjusted basis.

U.S. new home sales data will be released today.

Copyright 2016, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

 

Tags: Australian consumer prices, German and French consumer confidence, OPEC




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Manufacturing activity in Europe surprises to the upside

Manufacturing activity in Europe surprises to the upside

Manufacturing activity in the eurozone strengthened sharply in October, beating expectations, according to “flash,” or preliminary, purchasing manager’s index (PMI) data. The region is growing at its fastest pace so far this year, having climbed to its highest reading since April 2014.

The news follows positive September readings in emerging European countries that we track closely, an encouraging sign that the continent’s economy might finally be picking up steam after an extended period of sluggish growth.

Hungary, volatile as always, was the largest gainer last month, leaping ahead 5.3 points to a nearly three-year high. Historically, the Central European country has bumped up when the transport sector, which represents a big share of production, gets a new large order.

I’ve written numerous times on why we monitor PMI. Unlike gross domestic product (GDP), which is a backward-looking indicator, PMI gives us a foreshadowing of manufacturing activity three and six months out. This is important for investors because as manufacturing accelerates, so too does demand for commodities and natural resources, helping to support prices.

Not only do we like to see the monthly reading come in above 50—the threshold separating industry expansion from contraction—but it’s exceptionally positive when the reading appears above its three-month moving average.

This was the case for all countries except Greece and Turkey, both of which shrank slightly in September.

All in all, the Eurozone’s positive October PMI encourages me, even if it is preliminary. Whether you like it or not, ours is a global economy, and it’s impossible for any country, even one as strong as the U.S., to do all the heavy lifting alone. What we need now is synchronized global growth, and this is definitely a step in the right direction.

About the Author

Frank Holmes is CEO and chief investment officer of US Global Investors. This first appeared in his Frank Talk blog. For more updates on global investing from Frank and the rest of the U.S. Global Investors team, follow on Twitter at www.twitter.com/USFunds or like on Facebook at www.facebook.com/USFunds. You can also watch exclusive videos on what research overseas has turned up on the U.S. Global YouTube channel at www.youtube.com/USFunds.

US Global Investors, Inc. is an investment management firm specializing in gold, natural resources, emerging markets and global infrastructure opportunities around the world. The company, headquartered in San Antonio, Texas, manages 13 no-load mutual funds in the U.S. Global Investors fund family, as well as funds for international clients.

Tesla beats expectations, posts first quarterly profit in three years $TSLA

Tesla beats expectations, posts first quarterly profit in three years $TSLA

Tesla Inc. Wikipedia

Tesla Inc. Wikipedia

SAN FRANCISCO — Tesla proved naysayers wrong Wednesday, posting a profit for the third quarter — its first profitable quarter since early 2013. A near doubling of revenue and a much lower growth in expenses produced the positive net income of $111.4 million, or 71 cents a share, when adjusted for one-time events. For the same…

DOT: Vehicle Miles Driven increased 3.4% year-over-year in August

DOT: Vehicle Miles Driven increased 3.4% year-over-year in August

by Bill McBride on 10/24/2016 01:37:00 PM

The Department of Transportation (DOT) reported:

Travel on all roads and streets changed by 3.4% (9.3 billion vehicle miles) for August 2016 as compared with August 2015.

Travel for the month is estimated to be 284.9 billion vehicle miles.

The seasonally adjusted vehicle miles traveled for August 2016 is 268.6 billion miles, a 2.5% (6.5 billion vehicle miles) increase over August 2015. It also represents a 0.8% decrease (-2.2 billion vehicle miles) compared with July 2016.

The following graph shows the rolling 12 month total vehicle miles driven to remove the seasonal factors.

The rolling 12 month total is moving up – mostly due to lower gasoline prices – after moving sideways for several years.

Vehicle Miles Click on graph for larger image.

In the early ’80s, miles driven (rolling 12 months) stayed below the previous peak for 39 months.

Miles driven (rolling 12) had been below the previous peak for 85 months – an all time record – before reaching a new high for miles driven in January 2015.

The second graph shows the year-over-year change from the same month in the previous year.  Miles driven are up 3.4% year-over-year.

Vehicle Miles Driven YoY In August 2016, gasoline averaged $2.28 per gallon according to the EIA.  That was down from August 2015 when prices averaged $2.73 per gallon.

Gasoline prices aren’t the only factor – demographics are also important. However, with lower gasoline prices, miles driven on a rolling 12 month basis, is setting a new high each month.