Thursday, June 2, 2011

MacroAdvisers 2Q GDP @ 2.6%, down from 2.8%, Jobless Claims

And MacroAdvisors downgrades their US 2Q11 GDP growth with a worse mix: more inventories, less consumption, from 2.8% to 2.6%.

And now with those Jobless Claims. As I guessed (no tool to forecast here... just a guesstimate, like Mr. Gartman usually says) that if this week's claims came in @ 420k and that horrible +470k+ number dropped out of the 4wk moving average we'd still see a very bad trend.

And here we are. INJC @ +422k, last week's number revised up +4k.
Below the NSA (those seasonal adjustments are tought, huh!) 4 and 6k average compared to LAST year.
Is it Japan? Is it the accumulation in inventories making rounds and 'firing people'?
I do not know nor do I forecast, but I still think that this pause in the upward movement of risky-markets is bad for the economy. That it will cause numbers to come in worse than before, therefore bringing markets down and feeding into the loop (markets down, economy down, markets down...) until more stimulus comes.

For now I will leave this post with the excerpt below, from the Factory Orders report released earlier this morning:
Inventories of manufactured durable goods in April, up sixteen consecutive months, increased $3.3 billion or 0.9 percent to $350.6 billion, unchanged from the previously published increase. This was at the highest level since the series was first published on a NAICS basis and followed a 1.7 percent March increase.

*Disclaimer: charts and data are presented as I receive/see them. Sources are usually not checked for validation and my own calculations are of 'back of the envelope'-type. I am aware that some math that I do myself might be wrong and/or misleading to some extent. In financial markets the rate of change of economic data is often more important than the actual level and the perception of 'what is priced in' is more important than 'what is actually going to happen'. This is actually the way people pick entry and exit points. So... yes, sometimes you might say 'This guy is an idiot, this is way wrong!' with a high conviction, being right. Not to worry. Markets are made of expectations and the clash of conviction between its participants. Portfolio managers know that being an idiot is sometimes profitable and being smart is often a bad choice. It is all reality, sometimes good, sometimes bad. By the way: corrections to my analysis and intelligent debate is welcome. theintriguedtrader AT gmail do com

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