Week 34 US Economic Calendar: Is Housing hit the Bottom already?

Weekly Economic Calendar, from Action Economics, Businessweek

This week focus point is Producer Price index, Housing Starts and Leading indicator

Last week, Consumer sentiment index drop and weak retail sales result serve as a good reminder of weak recovery. People are spending cautiously, as the employment outlook is still bleak. The other reason is the stock market has run too far ahead. If you look into some of the US blue chips now, they are trading at 2 digit of Leading P/E (Trailing P/E is Price divided by previous earnings, Leading P/E is Price divided by forecast earnings). In some cases, I personally think that it is over optimistic already. In the end of day, a business value is weighted by its underlying cash flow (Owner’s Cash flow – after deduct any debt/interest). However, more often, people are always misled by the sentiment and buying into the hope of making quick profit!

Housing sector is stabilizing, as the sentiment has been very bullish lately, due to the quick recovery of stock market. People, who are looking for new home will start to buy, as fears of rebound in home sector may send the price flying up again. This not only happen in US, as people in Singapore and Malaysia (Damansara) are queuing for new house launch. Can anyone imagine this at start of the year when everything is postponed?? Construction activity is at nearing zero level.

House is a place for people to rest and re-charging energy after a hard work day. However, people have started to treat house as a commodity now. Bank no longer doing their traditional business, as greedy executive is using mortgage as collateral, securitized it and sell it at the market. The main reason is their bonus is tight with the profit.

Week 33 US Economic Calendar: Fed Meeting & July Retail Sales Dominate the Week

Weekly Economic Calendar, from Action Economics, Busienssweek

July unemployment rate has showed some good positive sign, by dipped to 9.4% from 9.5% last period. Like what i say previously, the traders will be eager to bet along the upside of employment result. Friday was a testament of how bullish the market right now. Dow Jones was trading up 113.81 points and closing at 9370. Technically, the market has broken the previous downtrend and moving upward. The strong resistance for Dow Jones now will be at 9600!

This week, US Fed will have their regular meeting and Wall Street will be closely looking at Fed’s policy statement , due to release at 2.15pm ET, Wednesday. As an investor, we would like to understand the Fed policy. It would be interesting to see how the Fed going to deal with over-flowing liquidity in the market right now.

US July Retail Sales is another interesting figure (Release at 8.30am ET, Thursday). Last month, retail figure has shown good increment growth in foods, electronics, motor vehicles and sporting goods but the dining place, clothing and furniture result are still dismay. Anyway, I think this is pretty normal. If your career are at risk and you don’t know what’s going to happen tomorrow, then, probably, the best solution is to spend as few as you could and building up the buffer. This is exactly what happens now at US; the same things that happen in South-East Asia during the late 90’s recession.

Week 32: US Economic Calendar

Weekly Economic Calendar, from Action Economics, Businessweek

I have to sincerely apologize to my readers for upload this calendar late, as i struggle to set up my desktop and online as well. I had started a new venture today and it going to take out some of my precious time. However, i am always very committed as i do. My goal is to update at least 1 or 2 post each week.

Last 8 months Performance of PMI Index

July ISM Index Component

ISM Manufacturing index for July is 48.9% and beat the forecast of 45.8%. Dow Jones immediately trading at 1% upward range.

Summary of Report as below:

PMI

Manufacturing contracted at a slower rate in July as the PMI registered 48.9 percent, which is 4.1 percentage points higher than the 44.8 percent reported in June. This is the 18th consecutive month of contraction in the manufacturing sector. A reading above 50 percent indicates that the manufacturing economy is generally expanding; below 50 percent indicates that it is generally contracting.


A PMI in excess of 41.2 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the PMI indicates growth for the third consecutive month in the overall economy, and continuing contraction in the manufacturing sector. Ore stated, "The past relationship between the PMI and the overall economy indicates that the average PMI for January through July (40.6 percent) corresponds to a 0.2 percent decrease in real gross domestic product (GDP). However, if the PMI for July (48.9 percent) is annualized, it corresponds to a 2.4 percent increase in real GDP annually."

Well, the 48.9 index is still below 50, which indicate expansion for manufacturing, but it certainly not far from it now.

The main dish for this week is ISM Manufacturing index and July Employment report (Wed, 8.15am ET). ISM manufacturing has given the market something to cherish on and continue to march towards 10000 for Dow Jones. Employment figure is a lagging indicator and it always recover when; only the business confidence is back. In this case, my opinion is Traders will be eager to bet along the positive upside of Employment figure. Therefore, i foresee that market will continue trend up for time being.

Week 31: US Economic Calendar

Weekly Economic Calendar, from Action Economics, Businessweek

Last week, US Existing Home Sales up 3.6% in June to seasonally adjusted annual rate of 4.89 millions. This is the third straight months up for existing home sales and the highest level since October last year. Market has digested this news well and investors are swarming into the market to push Dow Jones and regional market to new heights in this year.

In the coming week, we will see some several important reports coming out. Traders will closely watching at 3 heavyweights report:

i. New Home Sales report at Monday (10.00 am ET Release)

ii. Consumer Confidence Index at Tuesday (10.00 am ET Release)

iii. GDP at Friday (8.30 am ET Release)

The New Home Sales figure is a good indicator to showcase how far the sentiment at US has recovered. At this time, home buyer is waiting for a bottom before they start to buy house. Based on June Existing Home Sales report, the supply is at 9.4months now. In this case, the housing price will be stable now at 7months supply. Therefore, the mortgage foreclosure should be slowing down. All this are good sign of economy is recovering but albeit at a very slow pace.

Week 22: US Economic Calendar

Weekly Economic Calendar, from Action Economics, Businessweek

Last week, US Leading indicator has increased 1% in April, following a 0.2% decline in March. This is certainly a good sign. Economist at The Conference Board suggests that the leading indicators shows that the recession will continue in the near term, the declines will be less intense. The question is how long before declines in activity give way to small increases. If the indicators continue on the current track, that point might be reached in the second half of the year.

Housing report will dominate in this week activity. Housing activity has show clear signs of stabilizing. As I had stated previously, housing price and activity will determine how fast US economy can recover from contraction. The most badly hit states, like Nevada, Arizona, California and Florida have shown sign of encouraging sales. The existing home inventory has to go down before any significant pick up of new home construction activity.

Like what Warren Buffett say, house is mean for home stay and not mean for speculation!

Wk 21: Economic Calendar

Weekly Economic Calendar, from Action Economics, Businessweek

This week main focus will be the Leading Indicator & the Federal Meeting Minutes. The Federal Minutes most likely will suggest that the worst is over and coherent with the recent market rally tune.

It is interesting to see how the HomeBuilders’ Survey fares this Monday. This survey will showcase Homebuilders’ confidence and giving hints on the housing market. The housing price is still dropping, but no longer as fast as last quarter of 2008.

Week 20: Economic Calendar

Weekly Economic Calendar, From Action Economics, Businessweek

There are several interesting reports coming out this week, like Trade Balance, April Retail Sales, Producer Price index, Consumer Price index and Consumer Sentiment Index.

The first most important one will be April Retail Sales report, due out on this coming Wednesday. This report will show how’s the consumers are doing in April. Are they spending more or less?

Initial Unemployment claims had been steadily lower in this few weeks. The continue sign will be a good news. However, last Friday jobs report gave a mixed picture of overall employment in the US. The pace of layoffs has slowed down in April, but the unemployment rate climbed to 8.9%, the highest since 1983!

Week 19: Economic Calendar

Above are weekly economic calendar, from Action Economics, Businessweek:

There are some interesting events happen in this coming week. Trader will closely watch out for Stress Test result, expected to be released at Thursday.

Labor Dept.'s employment report for April will be released at Wednesday. Unemployment rate is the key for economy recovery. As long as unemployment rate stay high, the consumer spending will be slowed. Therefore, the recovery process will be longer.