Let’s start this rather lackluster market morning with some interesting economic data, more data that points to the US economy moving out of its soft patch.
US industrial production increased 0.6 percent in July with factory output up 0.5 percent
Higher production potentially means more jobs and with wages incrementally but steadily climbing this year, the following data means the US consumer will have more dollars to spend.
US consumer prices unchanged in July for 3rd time in 4 months, evidence that inflation is tame.
With the first of the big two shopping seasons just beginning, it is time to search out those opportunities in the market, the ones found in “back to school” necessities, such as teen clothing, computer tablets, computer notebooks, athletic gear, and sportswear for school athletes.
Now, the above points to the future, a leading indicator of what might come, but the data below points to what has happened, which is good, but the better news is what it portends.
In August, homebuilders reported seeing the best sales level since February 2007. Their outlook for sales in the next six months is at the highest level since March 2007and turnout by prospective buyers returned to levels not seen since May 2006.
Of course, new home sales will drop as autumn and winter roll in and as banks roll out more short sales and foreclosures, but the fact that homebuilders see future sales on the upswing and more prospective buyers are looking speaks to a brighter economic outlook nevertheless, as does the news below.
Builders’ improved confidence has fueled a surge in new construction this year. Builders broke ground in June on the most new homes and apartments in nearly four years. And permits to build single-family homes rose to the highest level since March 2010.
Construction on the upswing is good for the US economy and the market. A stronger US economy portends a more stable market, and that will be welcome after the market we have seen this year, last year, and the three years before that. Take your time, ignore the breathless media, do your own work, and find the opportunities. Once you do that, develop your strategy and execute. Now is the time to put all the pieces in place, for both near- and long-term plays.
U.S. natural gas production will expand to a record this year and oil output swelled in July to its highest point since 1999.
As I have pointed out before, the US market for natural gas is improving, but it is the overseas markets that will drive the sales. The cost in both Asia and Europe is appreciably higher than in the US, and the distribution network is growing in leaps and bounds. This is the near-term. Here is a thought for the longer term.
A surge in U.S. natural gas development has spurred $226 billion in spending plans on pipelines, storage, processing facilities and power plants, most slated for the next five years, according to Industrial Info Resources, a market-intelligence provider in Sugar Land, Texas.
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