The good news is it is Tuesday. Monday is long gone. The bad news is Tuesday is no better than Monday relative to market news.
- Growth in the U.S. manufacturing sector moderated in June for a third month in a row, slipping to its slowest pace since late 2013, according to an industry report released on Tuesday.
Blah, blah, blah … We already know this stuff. It is about durable goods (commercial aircraft mostly), it is old information, and it really means little. Did we already forget about the Paris Air Show where Boeing and Airbus cleaned up?
- The European aerospace giant received orders for a total of 421 aircraft, worth $57 billion at list prices. Boeing received orders and commitments for 331 planes valued at $50.2 billion.
Now that is meaningful information, leading to be sure, but it points to the future, the same place the market looks for its information.
- The National Association of Realtors said Monday that sales of existing homes climbed 5.1 percent last month to a seasonally adjusted annual rate of 5.35 million. May was the third consecutive month of the sales rate exceeding 5 million homes.
Yes, the above is lagging information, but within it is a strong suggestion of a leading indicator – consumer confidence relative to employment.
- Home sales are on pace for their best year since 2007. First-time buyers are streaming back into the market. Prices are skyrocketing, aided by a stronger job market and tantalizingly low mortgage rates that are creating pressure for buyers to act fast.
The five-million home-sales bar is a big one, and when you combine that with the recent surge in home-building permits, it is more reasonable to assume the US economy is doing better than it is to assume it is not from the durable goods numbers.
Yet, me thinks the market is more concerned with the durable goods numbers, rather than the homes sales, as the former is of greater value to the breathless media, relative to the ad nauseum Fed/interest rate story line.
No matter, anyway, the market is looking toward earnings, and, as of now, the Q2 earnings and the projected earnings for Q3 look good enough to keep the market wanting to go up …
- Yes, the world is inundated with mobile phones, flat screen TVs, and air conditioners. But growth in demand for electricity is slowing. The reason: efficiency. To cram huge amounts of processing power into pocket-sized gadgets, engineers have had to focus on how to keep those gadgets from overheating. That’s meant huge advances in energy efficiency. Switching to an LED light bulb, for example, can reduce electricity consumption by more than 80 percent.
As to the market future, the above is indicative of direction, at least in the energy sector. It speaks to the diminishing stature of fossil fuels in our collective energy production and it speaks to opportunity in the alternative-energy sector.
- About $8 trillion, or two thirds of the world’s spending on new power capacity over the next 25 years, will go toward renewables.
See what I mean? Money is pouring into renewables and the costs are crashing, especially in solar. The actual numbers and future projections suggest rooftop solar alone will make a huge difference in production needs in a mere 10 years. Now, add to that the trajectory of commercial solar plants and voila, you have opportunity …
- El Ninos have the potential to affect weather and harvests around the globe by baking parts of Asia, dumping rain across South America and bringing cooler summers to North America. The event poses a risk for the global economy in the second half as it can hurt crops and boost inflation.
Yup, here come the dire predictions about El Nino. A new boogeyman, for sure, but for many, at least those of us in the American west, El Nino is not scary; it is welcome, as it will bring much needed rain. So, let’s hope the meteorologists are right on this one …
- The world’s most populous nation will overtake the U.S. as early as 2026 in nominal gross domestic product in dollar terms.
Let’s just say, for arguments sake, China’s GDP is $9 trillion, high by most estimates, but close enough for comparative purposes. Let’s just say the US is $17 trillion. Now, if China grows at annual clip of 7.2% over the next ten years and the US grows at 3%, where will each be?
Using the Rule of 72 (compounding interest), China’s GDP will have doubled to $18 trillion, give or take. The US will be at $23 trillion, more or less. How is it that folks keep saying China is on the way to overtaking the US economy in 10 years? Can someone please enlighten me?
Trade in the day; invest in your life …
