June 8, 2017
Chris Angle, Editor
222 Boston Post Road, #244
Waterford, CT 06385
Please note that custom economic and/or macro investment research and wealth advisory services are available on request.
PART 1 - STOCKS
1) Macro-Economic Snippets w/Index
2) Indicators for Technical Analysis
3) Overall Investment Strategy Index
PART 2 - HEDGING
1) Hedging and Inflation Snippets
2) Hedging Summary
PART 1 - STOCKS
1) Macro-Economic Snippets
A) Negative Economic and General Business Data Snippets
WSJ: Sales of previously owned U.S. homes fell 2.3% in April from the prior month’s revised level to a seasonally adjusted annual rate of 5.57 million, the National Association of Realtors said Wednesday.
FedReserve: FRED® Series M2V: Velocity of M2 Money Stock Fell - The most recent observation is 1.429 for Q1 2017.
BEA: Real gross domestic product (GDP) increased at an annual rate of 1.2 percent in the first quarter of 2017
ESA: Profits from current production decreased $40.3 billion in the first quarter, following an increase of $11.2 billion in the fourth quarter.
IBD: The U.S. economy continued to grow "modestly" or "moderately" in nearly all regions in recent weeks, though new signs appeared that optimism has waned in some districts, a Federal Reserve survey showed.
The central bank's Beige Book economic report, based on anecdotal information collected by the 12 regional Fed banks through May 22, said several sectors from manufacturing to housing continued to expand slowly. Consumer spending softened, however, with many districts reporting little or no change in non-auto retail sales.
Total of Negative General Business and Economic News Snippets: 5
B) Positive Economic and General Business News Snippets
WSJ: Eurozone’s Economy Continued to Grow in the First Quarter: The currency area’s economy grew 0.5% compared with the final three months of 2016
WSJ: Eurozone’s Recovery Broadens: Encouraging growth figures from Italy, Ireland and Spain could help persuade the European Central Bank to cut its stimulus measures
WSJ: U.K. Economy Revved Up in April Despite Looming Brexit Talks: Surveys showed manufacturing, construction and services all grew strongly in April
BLS: Total nonfarm payroll employment increased by 211,000 in April, and the unemployment rate was little changed at 4.4 percent. Job gains occurred in leisure and hospitality, health care and social assistance, financial activities, and mining.
WSJ: The pace of hiring picked up in April as employers added 211,000 jobs and the headline unemployment rate fell to 4.4%. Here’s a look at some of the other key data points in today’s monthly jobs report.
WSJ: The share of the population in the labor force—defined as those working or actively looking for work—has hovered at or just below 63% for most of the past year. The share of the population with jobs has slowly been rising, and climbed to 60.2% in April, the highest since February 2009.
WSJ: Unemployment rates are coming down for workers at every education level.
WSJ: Unemployment rates have also continued to trend down for different race and gender groups.
IBD: The IBD/TIPP Economic Optimism Index eased to 51.3 in May from 51.7 in April.
WSJ: OECD Tempers Global Growth Expectations: Indicators point to pickups in Germany, Canada, but steady expansions in U.S., U.K.
BLS: Real average hourly earnings increased 0.1 percent in April, seasonally adjusted. Average hourly earnings increased 0.3 percent, and CPI-U increased 0.2 percent. Real average weekly earnings increased 0.4 percent over the month.
USCensus: The U.S. Census Bureau released new data today on building permits in April 2017 showing a seasonally adjusted annual rate (SAAR) of 1,229,000, down 2.5percent from the revised March rate, but up 5.7 percent from April 2016.
USCensus: Housing starts in April 2017 were at a SAAR of 1,172,000, down 2.6 percent from March 2016, but up 0.7 percent from April 2016.
S&P Lifts Indonesia’s Ratings to Investment Grade - The ratings firm raised its long-term sovereign rating on the country to BBB-
WSJ: The eurozone’s economic recovery maintained its recent, stronger momentum in May as the currency area’s manufacturing sector added jobs at the fastest pace in 20 years while German businesses were more optimistic than at any time since 1991.
CPB: The CPB World Trade Monitor shows that the volume of world trade increased 1.5% in March, having decreased 0.8% in February
BEA: Personal income increased $58.4 billion (0.4 percent) in April according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $56.5 billion (0.4 percent) and personal consumption expenditures (PCE) increased $53.2 billion (0.4 percent).
IBD: The consumer is on track for a second-quarter comeback after a weak stretch at the start of the year, as Americans kept up spending in line with income gains in April, Commerce Department figures showed Tuesday.
Highlights of Personal Income and Spending (April)
Purchases increased 0.4% m/m (matching est.), most since December, after an upwardly revised 0.3% rise in March.
Incomes rose 0.4% m/m (matching est.) after 0.2% gain.
Price gauge tied to consumption rose 0.2% m/m (matching est.), rose 1.7% y/y (matching est.).
Excluding food and energy, prices rose 0.2% m/m (est. 0.1% rise), rose 1.5% y/y (matching est.).
Key Takeaways: The pickup in nominal consumer purchases shows Americans appear more eager to spend in the second quarter following the weakest gains since 2009 in the January-March period. Household balance sheets that have been strengthening with a tightening labor market and rising wages should help buoy spending as the broader economy gains momentum. Wages and salaries rose 0.7% from the previous month, matching the fastest gain this year.
Total of Positive General Business and Economic News Snippets: 18
Table of Positive v. Negative General Economic & Business News
Month % Neg % Pos
Jan 38% 62%
Feb 38% 62%
March 50% 50%
April 30% 70%
May 36% 64%
June 47% 53%
July 37% 63%
August 24% 76%
Sept 49% 51%
Oct 36% 64%
Nov 43% 57%
Dec 27% 73%
Jan 40% 60%
Feb 41% 59%
March 47% 53%
April 49% 51%
May 42% 58%
June 38% 62%
July 54% 46%
Aug 31% 69%
Sept 38% 62%
Oct 32% 68%
Nov 14% 86%
Dec. 32% 68%
Jan 34% 66%
Feb 04% 96%
Mar 19% 81%
April 30% 70%
May 22% 78%
3) Economic Analysis/Indicator Summary
(DAILY) - HIGH YIELD BONDS (HYG)
Upticked (05/03 - 87.90; 06/07 - 88.18) Positive
(DAILY) - iSHARES SELECT DIVIDEND (DVY)
(05/03 - 91.17; 06/07 - 92.48) Uptick Positive
06/01 - PURCHASING MANAGERS INDEX 54.9
Mfg still Expanding: Positive
06/01 - CONSTRUCTION SPENDING (Census Bureau) Up - 1.4% month to month - Negative; Year over year + 6.7% Positive; Combined - Positive
06/05 - MANUFACTURERS’ SHIPMENTS, INVENTORIES, & ORDERS (Census Bureau): - 0.2%: Negative
06/02 - (BLS) UNEMPLOYMENT Overall: Positive
06/02 - Unemployment Rate (BLS): Downtick to 4.3%: (Positive)
Civilian Labor Force Participation Rate (BLS): Dntick 63.0% - 62.7% (Negative)
Employment-Population Ratio (BLS): Downtick 60.1% - 60.0 (Negative)
06/05 - Employment Trends Index (The Conference Board TM) Increased (Positive)
06/06 - QUARTERLY FINANCIAL REPORT - MFG, MINING, WHOLESALE, SERVICE (Census Bureau) - Manufacturing corporations' seasonally adjusted after-tax profits were $146.5 billion for the first quarter of 2017, up $3.5 (+/- 0.8) billion from fourth quarter of 2016. Positive
05/12 - RETAIL SALES (Dept of Commerce) +0.4% from previous month but +4.5 percent (±0.9 percent) above April 2016 Positive
05/12 - MANUFACTURING AND TRADE INVENTORIES AND SALES (Census Bureau): + 0.2%: Positive
05/16 - INDUSTRIAL PRODUCTION INDEX (INDPRO) - Positive
Uptick: 104.0998 - 105.1241 Positive
(Year over Year 102.8697 - 104.0998 Positive
05/16 - HOUSING STARTS (Dept of Commerce): Neutral
(month over month) - 2.5% Negative
(yr over yr) + 5.7% Positive
05/18 - CONFERENCE BOARD
LEADING ECONOMIC INDICATORS ™ Increased: Positive
05/18 - CONFERENCE BOARD
COINCIDENT ECONOMIC INDICATORS ™ Increased: Positive
05/23 - NEW RESIDENTIAL SALES (Census Bureau) - 11.4% Negative
(Overall in uptrend)
0/24 - EXISTING HOME SALES (NAR) - 2.3%: Negative
(Overall in uptrend: + 1.6% yr over yr)
05/26 - REAL GDP (BEA) + 1.2%: Positive
05/30 - PERSONAL CONSUMPTION EXPENDITURES (Dept of Commerce - BEA) + 0.4%: Neutral
05/30 - PERSONAL INCOME (Dept of Commerce - BEA) + 0.4%: Positive
05/30 - CONSUMER CONFIDENCE
(Conference BoardTM) Declined: Negative
05/31 - RESTAURANT PERFORMANCE INDEX: 99.1 - Contracting: Negative
4) RITE Investment Strategy Index
0 = Neutral;
+10 = High Opportunity Environment;
-10 = Extreme Negative Risk Miasma
EFFORT, RISK, FREEDOM,
1) Domestic Political Risk + 8 Excellent: New adm proposals look good.
2) Tax Risk + 6 Taxes to go down but when is not clear
3) Individual Incentive (Freedom) + 8 Regulations are to decrease in 2017
4) Production of Knowledge + 5 Economy positive, Just barely GDP +1.2
5) Technical Analysis + 8 Market: Bullish
of the U.S. Stock Markets
6) General Business
& Economic Snippets + 7 Positive Snippets 78%
7) Economic Indicators + 7 Slight decrease:
15 Pos; 5 Neg; 1 Neu
Sum of Total + 49
Average of Total + 7.0
RITE Strategy Index: 85.0%
EQUITY MARKET CONCLUSION:
Stocks: Stay Long
The RITE Index is high. This indicates strong bull market forces present.
PART 2: HEDGING
1) HEDGING/INFLATION SNIPPETS FROM THE WSJ
DEFLATION SNIPPETS 0/0%
INFLATION SNIPPETS 4/100%
The price index for U.S. imports advanced 0.5 percent in April, after ticking up 0.1 percent the previous month. Higher fuel prices and nonfuel prices both contributed to the increase in April. U.S. export prices rose 0.2 percent in April following a 0.1-percent advance in March.
The Producer Price Index for final demand advanced 0.5 percent in April. Final demand prices edged down 0.1 percent in March and climbed 0.3 percent in February. In April, the final demand services index increased 0.4 percent, and prices for final demand goods rose 0.5 percent.
BLS: On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers increased 0.2 percent in April after falling 0.3 percent in March. The index for all items less food and energy rose 0.1 percent in April after declining 0.1 percent in March.
BEA: The core PCE price index (excluding food and energy) was up 0.2 percent.
(RITE Report Issue Date is the first of the month; Statistical Data is the latest closing price which is noted in the WSJ on the close of the last day of the month, but the RITE Report does not represent that these data are accurate.)
Month Inflationdata.com CRB
Annual Inflation Rate
Sept 02 0.84% 179.99
Sept 30 1.06% 186.32
Nov 02 1.46% 184.29
Dec 01 1.64% 191.41
Dec 31 1.69% 192.512
Feb 09 2.07% 192.756
Mar 01 2.50% 190.81
April 04 2.74% 185.59
May 2.38% 176.96
June 2.20% 176.30
2) HEDGING SUMMARY
Inflation remains subdued.
Gold: No call
Oil: No call.
The U.S. Dollar: Stay Long (Economy to go up)
For your reference we include a directory of:
The RITE Report Major Trade Advice Summary
Mrkt Level Market Advice
2009/05/01 8,212 Stocks Go long.
2009/05/01 895 Gold Go long.
2009/05/01 USD Go short
2009/06/01 51.12 Oil Go long
2010/02/01 USD Stop going short;
Take profits. get out.
2011/04/01 12,376 Stocks Market to go sideways;
end of bull.
2011/05/01 12,763 Stocks Take profits 55.4% Gain
2011/06/01 102.7 Oil Go Neutral 100.9% Gain
2011/06/01 12,441 Stocks Take profits (re-confirmation)
2011/07/01 USD Go short
2011/08/01 USD Cover the short; no direction
2011/08/01 12,240 Stocks Trading Range
2012/03/01 107 Oil Go long
2012/05/01 104 Oil Go neutral 2.8% Loss
2012/06/01 12,772 Stocks Take profits; a downtrend started
2012/06/01 1,564 Gold Sell: Take profits 74.7% Gain
2012/07/01 1,604 Gold Buy: Go long
2012/08/01 13,090 Stocks Advised not to be in the Stock Market at all
2012/09/01 80.025 USD Go short
2012/11/01 13,096 Stocks Confirmation: Not to be in Stock Market
2013/01/02 13,104.30 Stocks Go Long
2013/03/01 82.47 USD Index Take loss; go neutral
2013/05/31 15,115.57 Stocks - Take profits 15.3% Profit
2013/08/01 15,499.54 Stocks Go Long
2013/12/01 92.78 Oil Go Short
2014/01/02 98.70 Oil Take off short: Go Neutral 6.38% Loss
2014/02/28 16,321.71 Stocks Take profit; go to cash 5.0% Increase
2014/03/01 16,532.61 Stocks Go long (Unrealized gain potential)
2014/10/31 1,173.5 Gold Sell (1,604 to 1,173.5 loss of 430.5) 36.8% loss
2015/01/30 1,283.0 Gold Go long
2016/04/04 35.32 Oil Go long
2016/07/01 49.05 Oil Take Profit - 38% Gain
2016/12/02 1,176.3 Gold Sell - Loss 8.3%
2016/12/02. 91.50 WSJ Dollar Index Go Long
Stocks (DJIA) 21,173.69 Stay Long (Unrealized gain potential)
Gold 1,293.2 No call
US Dollar 88.10 Stay Long (Unrealized loss potential)
Oil 45.92 Neutral; No Call
Please note that custom economic and/or macro investment research and advisory services are available on request.
1) Past performance is not indicative of future results.
2) Trading stocks, futures, and options involves substantial risk of loss and is not suitable for all investors.
222 Boston Post Rd., #244
Waterford, CT 06385
(The RITE Report’s name was derived from the acronym of the four variables inherent in all economic transactions; Risk, Information/Knowledge, Time, and Effort. Of course, this would be for a service, and if the product were a material good, there would be an additional factor of Material - or Land as the economist would say. See The Philosophical Equations of Economics at www.philosophypublishing.com for further info on this subject.)
FOR YOUR REFERENCE
1) Chris Angle is the author of:
The Nature of Aesthetics - 978-0-9661126-4-1
Defining Ethics Good & Evil - 978-0-9661126-5-8
Truth and the Nature of Decisions - 978-0-9661126-6-5
The Philosophical Equations of Economics - 978-0-9661126-3-4
These books may be viewed at: www.philosophypublishing.com
2) Chris Angle is the host of The Philosophical Angle, a TV and Podcast Program, which discusses concepts in current media.
1) Past performance is not indicative of future results.
2) Trading stocks, futures, and options involves substantial risk of loss and is not suitable for all investors. Carefully consider the suitability based upon your experience, objectives, financial resources and other relevant circumstances. Alternative investment products, including hedge funds and managed futures, involve a high degree of risk. Alternative investment performance can be volatile and are not suitable for all investors. An investor could lose all or a substantial amount of his or her investment.
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