GDP data was reported today. I trust Consumer Metrics Institute to analyze the full report.
Summary and Commentary
Our observations this month are focused on the BEA's revisions to the historic data:
-- The revisions follow a recent annual pattern of the BEA revising historic quarterly growth rates lower. This revision removed -0.22% on average from previously reported growth rates, while the 2014 revisions removed -0.19% on average from the then previously published growth rates (and another -0.09% was removed on average in 2013). The cumulative impact of the successive hair-cuts has reduced historic growth rates by an average approaching one half percent relative to "final" headline numbers -- representing an optimistic bias of about a half percent in the BEA's "final" estimates. It is worth noting that this optimistic bias has been getting progressively worse.
-- Especially hard hit in the revisions were the real per-capita disposable income numbers. The cumulative compound annualized growth rate for real disposable income has been only +0.45% since the second quarter of 2008. And these figures represent mean incomes that are skewed by disproportionate growth at the upper end. According to Sentier Research, median incomes during the same time span have contracted by roughly 4%.
-- And household savings rates have been weaker than previously suspected, confirming the lower incomes.
A conclusion from the above? The BEA has been persistently optimistic about the "Great Recovery" while the median household has been hammered. Sadly, nothing in this report suggests that things are getting better.
It’s controversial to add new revisions to important data but it’s happily done to inflation and employment data routinely. Now we see a better GDP report which Consumer Metrics Institute can thankfully tear apart and report.
Stocks opened lower Thursday but the trusty dip buying crowd was there to boost indexes off their lows to close mostly unchanged. Beneath the surface, and globally, selling dominated overall once again. Commodities fell once again as the dollar rallied modestly. Bonds were well-bid.
Leading market sectors higher included: Tech (QQQ), Retail (XRT), Homebuilders (ITB), Utilities (XLU), UK (EWU), Taiwan (EWT), Vietnam (VNM), India (EPI) and Bonds (TLT).
Leading market sectors lower included: Energy (XLE), Oil & Gas Exploration (XOP), REITs (IYR), Emerging Markets (EEM), European Monetary Union (EZU), Germany (EWG), Spain (EWP), South Korea (EWY), Brazil (EWZ), Russia (RSX), China (FXI), Shanghai (ASHR), Gold (GLD), Gold Stocks (GDX), Silver (SLV), Crude Oil (USO), Natural Gas (UNG), Commodity Tracker (DBC) and Base Metals (DBB).
The top 20 market movers by percentage change in volume whether rising or falling is available daily.
Volume was light and breadth per the WSJ was mixed.
Thursday’s comeback rally was transparent to me anyway. The opening decline was quickly bought and we’re heading to the close of July as buyers are desirous of saving the month. The have a slight win thus far but shares overall remain in the long 2015 trading range.
Let’s see what happens.
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Dave Fry is founder and publisher of ETF Digest and has been covering U.S. and global ETFs since 2001. ETF Digest was named one of the most informative ETF websites in the 10th Annual Global ETF Awards.
Disclaimer: The charts and comments are only the author's view of market activity and aren't recommendations to buy or sell only any security. Market sectors and related ETF's are selected based on his opinion as to their importance in providing the viewer a comprehensive summary of market conditions for the featured period. Chart annotation's aren't predictive of any future market action rather they only demonstrate the author's opinion as to a range of possibilities going forward. More detailed information, including actionable alerts, are available to subscribers at www.etfdigest.com
|WTI Crude Futr||48.44||-0.35||-0.72 %||17:14|
|US Dollar||97.60||-0.02||-0.02 %||17:00|
|Brazil||1454.377||3.16 %||-11.45 %||-20.63 %|
|Russia||471.115||3.40 %||-8.14 %||16.35 %|
|India||500.719||0.76 %||-0.01 %||0.87 %|
|China||66.368||0.70 %||-10.77 %||0.50 %|