The RITE REPORT
The following RITE Report generates indices from the monthly compilation of business, economic, & political news snippets from the Wall Street Journal, IBD, U.S. Government, et al.
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
CENSUS BUREAU: July 2017 sales of merchant wholesalers were $465.1 billion, down 0.1 percent (+/- 0.2 percent)* from last month. End-of-month inventories were $602.4 billion, up 0.6 percent (+/- 0.4 percent) from last month.
BLS: Real average hourly earnings decreased 0.3 percent in August, seasonally adjusted.
BLS: Real average weekly earnings decreased 0.6 percent over the month.
CENSUS BUREAU: U.S. retail and food services sales for August were $474.8 billion, a decrease of 0.2 percent (+/-0.5%)* from the previous month. August 2017: -0.2* % change; July 2017 (r): +0.3 % change
ESA: Housing starts in August 2017 were at a SAAR of 1,180,000, down 0.8 percent from July 2017, and up 1.4 percent from August 2016.
U.S. Census: New Residential Construction - Privately-owned housing starts in August 2017 were at a seasonally adjusted annual rate of 1,180,000. This is 0.8 percent (+/- 9.6%)* below the revised July 2017 estimate of 1,190,000. August 2017: -0.8* % change; July 2017 (r): -2.2* % change
WSJ: Existing-Home Sales Tumble for Third Straight Month - A sharp drop in sales in Houston, which was racked by Hurricane Harvey, accounted for most of the overall decline - Existing-home sales declined 1.7% from a month earlier to a seasonally adjusted annual rate of 5.35 million, the National Association of Realtors said Wednesday.
IBD: China's Credit Rating Cut As S&P Cites Risk From Debt Growth
CPB: The CPB World Trade Monitor shows that the volume of world trade decreased 0.4% in July, having increased 0.0% in June (initial estimate: 0.5%).
U.S. CENSUS: Sales of new single-family houses in August 2017 were at a seasonally adjusted annual rate of 560,000. This is 3.4 percent (+/- 13.0%)* below the revised July 2017 estimate of 580,000.
Total of Negative General Business and Economic News Snippets: 10
B) Positive Economic and General Business News Snippets
CENSUS BUREAU: Quarterly Financial Report - Retail Trade: Seasonally adjusted after-tax profits for retail corporations with assets of $50 million and over were $23.2 billion for the second quarter 2017 (the 3 months ending July 31, 2017), up $4.3 (+/- 0.1) billion from first quarter 2017 (the 3 months ending April 30, 2017). 2nd Qtr 2017: +4.3 $ billion; 1st Qtr 2017 (r): -9.2 $ billion
CENSUS BUREAU: Quarterly Financial Report (QFR) - Manufacturing, Mining, Trade, and Selected Service Industries: Manufacturing corporations' seasonally adjusted after-tax profits were $150.0 billion for the second quarter of 2017, up $0.5 (+/- 0.3) billion from first quarter of 2017. 2nd Qtr 2017: +0.5 $ billion; 1st Qtr 2017 (r): +12.3 $ billion
CENSUS BUREAU: The estimate of U.S. selected services total revenue for the second quarter of 2017, not adjusted for seasonal variation or price changes, was $3,684.6 billion, an increase of 3.2 percent (+/- 0.6 percent) from the first quarter of 2017 and up 6.2 percent (+/- 0.6 percent) from the second quarter of 2016. 2nd Qtr 2017: +3.2 % change; 1st Qtr 2017: -1.3 % change
WSJ: Chinese Exports Grow Again - China’s exports increased 5.5% from a year earlier in August, according to customs data released Friday.
IBD: IBD/TIPP Economic Optimism Index Finally Snaps This 12-Year Slump - For the first time since early 2005, the IBD/TIPP Poll has now recorded positive economic sentiment for 12 months running.
WSJ: U.S. Household Incomes Rose in 2016 to New Record - Income for the average American household reached a new high last year for the first time this century
BLS: Average hourly earnings increased 0.1 percent, and CPI-U increased 0.4 percent.
CENSUS BUREAU: Manufacturing & Trade Inventories & Sales - U.S. total business end-of-month inventories for July 2017 were $1,873.9 billion, up 0.2 percent (+/- 0.1 percent) from last month. U.S. total business sales were $1,358.8 billion, up 0.2 percent (+/- 0.1 percent) from last month. July 2017: +0.2 % change in Inventories; June 2017 (r): +0.5 % change in Inventories
WSJ: Eurozone Wage Growth Hits Two-Year High
CPB: The Dutch economy is flourishing. The Netherlands is a front runner in Europe, with growth figures of 3.3% (this year) and 2.5% (2018). Government finances are healthy. For both years, there is a budget surplus, and the government debt is below the maximum budget deficit set by the EU. In addition, the labour market is improving, which means it is tightening.
ESA: The U.S. Census Bureau released new data today on building permits in August 2017 showing a seasonally adjusted annual rate (SAAR) of 1,300,000, up 5.7 percent from the revised July rate, but up 8.3 percent from August 2016.
CENSUS BUREAU: New orders for manufactured durable goods in August increased $3.9 billion or 1.7 percent to $232.8 billion. August 2017: +1.7° % change; July 2017 (r): -6.8° % change 09/28 CENSUS BUREAU: August 2017 end-of-month inventories were $625.0 billion, up 0.7 percent (+/- 0.2%) from last month.
BEA: Real gross domestic product (GDP) increased at an annual rate of 3.1 percent in the second quarter of 2017, according to the "third" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 1.2 percent.
BEA: Profits from current production (corporate profits with inventory valuation adjustment and capital consumption adjustment) increased $14.4 billion in the second quarter, in contrast to a decrease of $46.2 billion in the first quarter.
CENSUS BUREAU: The advance international trade deficit in goods decreased to $62.9 billion in August from $63.9 billion in July as exports increased and imports decreased.
CENSUS BUREAU: August end-of-month inventories were $608.4 billion, up 1.0 percent (+/- 0.2 percent) from last month.
BEA: Personal income increased $28.6 billion (0.2 percent) in August according to estimates released today by the Bureau of Economic Analysis.
BEA: Disposable personal income (DPI) increased $14.9 billion (0.1 percent) and personal consumption expenditures (PCE) increased $18.0 billion (0.1 percent).
BEA: The personal saving rate as a percentage of DPI was 3.6 percent in August.
U.S. CENSUS: Total construction activity for August 2017 ($1,218.3 billion) was 0.5 percent (+/-1.3 percent)* above the revised July 2017 ($1,212.3 billion).
U.S. Census Bureau: Manufacturers' Shipments, Inventories, and Orders - New orders for manufactured goods in August increased $5.4 billion or 1.2 percent to $471.7 billion.
BLS: The unemployment rate declined to 4.2 percent in September; total nonfarm payroll employment changed little (-33,000). A sharp employment decline in food services and drinking places and below-trend growth in some other industries likely reflected the impact of Hurricanes Irma and Harvey.
U.S. Census Bureau: August 2017 sales of merchant wholesalers were $473.4 billion, up 1.7 percent (+/- 0.4 percent) from last month. End-of-month inventories were $608.1 billion, up 0.9 percent (+/- 0.2 percent) from last month.
Total of Positive General Business and Economic News Snippets: 24
Table of Positive v. Negative General Economic & Business News
Month % Neg % Pos
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%
June 44% 56%
July 40% 60%
August 17% 83%
Sept 29% 71%
3) Economic Analysis/Indicator Summary
(DAILY) - HIGH YIELD BONDS (HYG)
Downticked (9/1 - 88.32; 10/06 - 88.40) Positive
(DAILY) - iSHARES SELECT DIVIDEND (DVY)
(9/1 - 92.43; 10/06 - 94.04) Positive
10/02 - PURCHASING MANAGERS INDEX
Mfg still Expanding: 58.8 to 60.8 Positive
10/02 - CONSTRUCTION SPENDING (Census Bureau) Dn + 0.5% month to month - Positive; Year over year + 2.5% Positive; Combined: Positive
10/05 - MANUFACTURERS’ SHIPMENTS, INVENTORIES, & ORDERS (Census Bureau): New orders for manufactured goods in August increased $5.4 billion or 1.2 percent to $471.7 billion. Positive
10/06 - (BLS) UNEMPLOYMENT Overall: Positive
- Unemployment Rate (BLS): Downtick at 4.2%: (Positive)
-Civilian Labor Force Participation Rate (BLS): Unchanged 63.1% (Positive)
-Employment-Population Ratio (BLS): Downtick 60.1 - 60.4% (Positive)
- 09/05 Employment Trends Index (Conference Board TM) Increased (Positive)
09/07 - (BLS) PRODUCTIVITY Increased 1.5% Positive
-Productivity increased 1.5% percent in the nonfarm business sector;
-unit labor costs increased 0.2 percent (seasonally adjusted annual rates).
-In manufacturing, productivity increased 2.9 percent and unit labor costs decreased 0.4 percent.
09/06 - QUARTERLY FINANCIAL REPORT - MFG, MINING, WHOLESALE, SERVICE (Census Bureau) - Manufacturing corporations' seasonally adjusted after-tax profits were $150.0 billion for the second quarter of 2017, up $0.5 (+/- 0.3) billion from first quarter of 2017. Positive
09/15 - RETAIL SALES (Dept of Com.) -0.2% from previous month: Negative
09/15 - MANUFACTURING AND TRADE INVENTORIES AND SALES (Census Bureau): + 0.2%: Positive
08/17 - INDUSTRIAL PRODUCTION INDEX (INDPRO) - Negative
Downtick: 104.7390 Negative
(Year over Year 103.1459 - 105.4757) Positive
09/18 - HOUSING STARTS (Dept of Commerce): Neutral
(month over month) - 0.8% Negative
(yr over yr) + 1.4% Positive
09/21 - CONFERENCE BOARD
LEADING ECONOMIC INDICATORS ™ Increased: Positive
09/21 - CONFERENCE BOARD
COINCIDENT ECONOMIC INDICATORS ™ Unchanged: Neutral
09/26 - NEW RESIDENTIAL SALES (Census Bureau) - 3.4% Negative
(Overall in uptrend)
09/20 - EXISTING HOME SALES (NAR) - 1.7%: Negative
(Overall in uptrend: + % yr over yr)
09/28 - REAL GDP (BEA) + 3.1%: Positive
09/29 - PERSONAL CONSUMPTION EXPENDITURES (Dept of Commerce - BEA) + 0.1%: Positive
09/29 - PERSONAL INCOME (Dept of Commerce - BEA) + 0.2%: Positive
09/26 - CONSUMER CONFIDENCE
(Conference BoardTM) Decreased: Negative
09/29 - RESTAURANT PERFORMANCE INDEX: 100.2 - Expanding (Caveat- rate of expansion is falling) Positive
08/30 - Corporate Profits BEA Increased: Positive
Corporate Profits from current production increased $26.8 billion in the second quarter (2Q) juxtaposed to a decline of $46.2 billion in the first quarter (1Q). They rose 8.1% year-on-year in 2Q 2017 to an annualized $1.785.9 trillion, up from $1.652.1 trillion in 2Q 2016.
4) RITE Investment Strategy Index
0 = Neutral;
+10 = High Opportunity Environment;
-10 = Extreme Negative Risk Miasma
EFFORT, RISK, FREEDOM,
1) Domestic Political Risk + 7 Good: A tax reduction package will pass
2) Tax Risk + 6 Taxes to go down but when is not clear
3) Individual Incentive (Freedom) + 8 Regulations are decreasing
4) Production of Knowledge + 6 Economy positive, GDP increased to +3.0
5) Technical Analysis + 8 Market: Bullish
of the U.S. Stock Markets
6) General Business
& Economic Snippets + 5 Positive Snippets 83%
7) Economic Indicators + 7 Slight decrease: From 16/4/1 to
15 Pos; 6 Neg; 1 Neu
Sum of Total + 47
Average of Total + 6.7
RITE Strategy Index: 83.5%
History of Strategy Index (Started 2009) Statistics noted below are approximate.
Month/Yr Index % DJIA Gold Oil WSJ Dollar Index
Feb 29 56.1% 16,516.50 1,244.7 33.74 89.88
Mar 31 55.6% 17,685.09 1,233.1 37.79 86.58
April 30 53.3% 17,773.64 1,294.9 45.99 84.98
May 31 57.2% 17,787.20 1,220.4 48.82 87.50
July 1 57.8% 17,929.99 1,344.9 49.28 86.58
July 29 55.5% 18,432.24 1,357.9 41.38 86.50
Sept 02 58.9% 18,491.96 1,328.8 44.20 86.84
Sept. 30 57.9% 18,308.15 1,318.8 48.05 86.37
Nov 2 60.7% 17,959.64 1,305.7 45.81 87.70
Dec 1 77.1% 19,191.93 1,176.3 50.64 91.50
Jan 2 77.1% 19,762.60 1,152.0 53.89 92.94
Feb 9 87.8% 20,172.40 1,232.9 53.03 90.94
Mar 1 90.0% 21,142.85 1,243.0 53.93 91.41
April 4 88.5% 20,689.24 1,257.2 51.32 90.29
May 3 85.7% 20,579.90 1,248.5 47.82 89.89
June 7 85.0% 21,173.69 1,293.2 45.92 88.10
June 30 82.1% 21,349.63 1,241.2 46.29 87.74
Aug 4 83.5% 22,092.81 1,264.3 49.52 86.32
Sept 1 83.5% 21,987.56 1,338.6 47.39 85.60
Oct 6 83.5% 22,773.67 1,278.9 49.25 86.95
EQUITY MARKET CONCLUSION:
Stocks: Stay Long
The RITE Index remains high.
PART 2: HEDGING
1) HEDGING/INFLATION SNIPPETS FROM THE WSJ
DEFLATION SNIPPETS 1/25%
IBD: Flood Warning: Federal Reserve, Treasury Both Set To Unload Debt
INFLATION SNIPPETS 3/75%
BLS: In August, the Consumer Price Index for All Urban Consumers increased 0.4 percent seasonally adjusted; rising 1.9 percent over the last 12 months, not seasonally adjusted. The index for all items less food and energy rose 0.2 percent in August (SA); up 1.7 percent over the year (NSA)
ESA: The PCE price index rose 1.4 percent from August 2016. The core PCE price index (excluding food and energy) was up 1.3 percent over the same period. IBD: The Fed Doubles Down: Reverses QE, Keeps Hawkish Tilt
(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
June 30 1.87% 174.776
July 31 1.63 180.68
Sept 4 1.73% 180.95
October 6 1.94% 180.95
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) 22,773.67 Stay Long (Unrealized gain potential)
Gold 1,278.9 No call
US Dollar 86.95 Stay Long (Unrealized loss potential)
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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4) The RITE Report has been prepared either from publicly available information or reflects the opinions of the author. Information contained in this report is believed to be reliable but may not have been independently verified. The RITE Report does not guarantee, represent or warrant, or accept any responsibility or liability as to, the accuracy, completeness or appropriateness of the information contained herein. At no time will the RITE Report make specific recommendations for any specific person, and at no time may a reader, caller or viewer be justified in inferring that any such advice is intended. Information contained herein may not be current due to, among other things, changes in the financial markets or economic environment. Opinions reflected in the materials are subject to change without notice. Forecasts represent estimates. Information provided by the RITE Report is expressed in good faith, but it is not guaranteed. Long-term success, trading or investing in the markets, demands recognition of the fact that error and uncertainty are part of any forecasting effort. Investing carries risk of losses. Information provided by the RITE Report does not constitute, and should not be used as a substitute for tax, legal, or investment advice. Please ask your broker or your advisor to explain all risks before making any trading and investing decisions.
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