Tag: Evidence

Weighing The Week Ahead: Investors Need Some Objective Evidence

We have a light economic calendar with important data on home sales, jobless claims, and durable goods orders. None of these is likely to stimulate higher heartbeats.

I expect politics and the election to get plenty of attention in the financial media, especially with an open Supreme Court seat as a new issue.

These are important long-term issues, but the answers (which no one knows anyway) shed little light on key questions we all face right now.

Investors need an evidenced-based assessment of the economic rebound.

And then they need to ask if their portfolios are aligned with the answer.

Last Week Recap

In my last installment of WTWA, I took note of market declines and considered whether this might be the “start of something big.” We still do not know, but it is worth paying attention to the most important indicators.

The Story in One Chart

I always start

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Weekly High Frequency Indicators: First – Ambiguous – Evidence Of Consumer Spending Downturn

Purpose

I look at the high frequency weekly indicators because while they can be very noisy, they provide a good nowcast of the economy and will telegraph the maintenance or change in the economy well before monthly or quarterly data is available. They are also an excellent way to “mark your beliefs to market.” In general, I go in order of long-leading indicators, then short-leading indicators, then coincident indicators.

A Note on Methodology

Data is presented in a “just the facts, ma’am” format with a minimum of commentary so that bias is minimized.

Where relevant, I include 12-month highs and lows in the data in parentheses to the right. All data taken from St. Louis FRED unless otherwise linked.

A few items (e.g., Financial Conditions indexes, regional Fed indexes, stock prices, the yield curve) have their own metrics based on long-term studies of their behavior.

Where data is seasonally adjusted,

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