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http://www.forbes.com/sites/shreyaa...-your-usual-economic-indicators/#1431c6d2d245
Jul 1, 2016 @ 12:14 PM 820 views The Little Black Book of Billionaire Secrets
Pickup Trucks, Guns And Bacon Cheeseburgers: Not Your Usual Economic Indicators
Shreya Agarwal, Forbes Staff …l
I write about investing, markets and all things money.
Fewer people Googled ¡§I want to sell my kidney¡¨ in the past quarter than in the last two years. It was among the top three autofill results for Google for as many as eight quarters when you typed in ¡§I want to sell my¡¨ in the search bar. ¡§Kidney¡¨ has since been replaced with ¡§furniture¡¨.
So, can investors trade on that information? Maybe.
Analysts at brokerage firm Convergex track such unorthodox economic indicators each quarter to gauge the health of the economy. While these indicators can¡¦t single-handedly predict the downturns or bumps in the economy they can measure the nuances of the consumer and business behavior, the firm says.
The latest Convergex report examines a basket of eight unconventional economic indicators. Here are some of their conclusions.
Auto Industry The car dealers inventories are in good shape as the dealers have an equivalent of 59 days of sales on hand to show the buyers. Convergex analyst Nicholas Cove said, ¡§When the sales slowdown, dealers are stuck with too much inventory, and when sales grow quickly, they don¡¦t have enough to offer a good selection. So, they typically try to keep 60 days supply. Currently, its good, as it means that inventory and demand are well aligned.¡¨
Used Car Prices The prices of used cars remained robust, according to auto auction company Manheim that publishes an index of used vehicle values. That¡¦s a positive sign for the buyers who are more likely to trade in their old car when its value is better. The Manheim index stood at 124.5 in May up from 123.8 last year and is trending close to 127.6 levels seen in 2011.
Food Stamps the number of people participating in the Supplemental Nutrition Assistance Program has gone down to 44.3 million from 45.6 million a year ago. However, this is still way higher than 25 million people that participated in food stamps before the financial crisis.
Bacon Cheeseburger Index ¡V This index measures inflation. The index tracks the prices of the bacon, ground beef, and cheese. The popular toppings give an idea of year-over-year price trends. For the last two quarters, the bacon cheeseburger index has been showing deflationary warning signals, meaning prices of food products have gone way down and are not showing any signs of bouncing back.
According to Convergex analyst Nicholas Cove, the indicator gave out cautionary signals long before the Fed publicly revised their long-term growth forecasts lower earlier this month.
Spending power According to a Gallup survey, Americans are spending $93 a day versus $91 a day last year. This is still lower than $98 a day in 2014.
Metals over Mutual funds The six-month rolling averages of U.S. Mint sales of gold and silver bullion coins are $65 million and $85 million respectively. Both are higher than a year ago. By contrast, US mutual funds have seen a total of $31 billion in redemptions this year, reflecting the cautious attitude of investors, who have been dumping risky assets for safe havens due to uncertain global economic outlook.
Large Pick-Up Trucks Convergex uses this indicator for small business growth in ¡§Real America¡¨. Sales in May were down 3.1% from last year, one of the worst drops since mid-2011, according to Crain¡¦s Automotive week database.
Gun Sales More people are buying guns than before. FBI reported that there have been 11.7 million background checks for legal purchases of one gun or more, Colas noted. At that rate, Americans could buy 28 million firearms in 2016 sales. That compares to a three-year rolling average of 21.7 million. This increased buying has reflected on the toplines of the gun makers like Smith & Wesson, who reported a 22.2% jump in their quarterly profits earlier this month.
While guns are typically purchased for self-defense or recreational purposes, Colas said, ¡§we can also infer that a portion of the population also feels some uncertainty over their personal security.¡¨
Posted for fair use.....
http://www.forbes.com/sites/shreyaa...-your-usual-economic-indicators/#1431c6d2d245
Jul 1, 2016 @ 12:14 PM 820 views The Little Black Book of Billionaire Secrets
Pickup Trucks, Guns And Bacon Cheeseburgers: Not Your Usual Economic Indicators
Shreya Agarwal, Forbes Staff …l
I write about investing, markets and all things money.
Fewer people Googled ¡§I want to sell my kidney¡¨ in the past quarter than in the last two years. It was among the top three autofill results for Google for as many as eight quarters when you typed in ¡§I want to sell my¡¨ in the search bar. ¡§Kidney¡¨ has since been replaced with ¡§furniture¡¨.
So, can investors trade on that information? Maybe.
Analysts at brokerage firm Convergex track such unorthodox economic indicators each quarter to gauge the health of the economy. While these indicators can¡¦t single-handedly predict the downturns or bumps in the economy they can measure the nuances of the consumer and business behavior, the firm says.
The latest Convergex report examines a basket of eight unconventional economic indicators. Here are some of their conclusions.
Auto Industry The car dealers inventories are in good shape as the dealers have an equivalent of 59 days of sales on hand to show the buyers. Convergex analyst Nicholas Cove said, ¡§When the sales slowdown, dealers are stuck with too much inventory, and when sales grow quickly, they don¡¦t have enough to offer a good selection. So, they typically try to keep 60 days supply. Currently, its good, as it means that inventory and demand are well aligned.¡¨
Used Car Prices The prices of used cars remained robust, according to auto auction company Manheim that publishes an index of used vehicle values. That¡¦s a positive sign for the buyers who are more likely to trade in their old car when its value is better. The Manheim index stood at 124.5 in May up from 123.8 last year and is trending close to 127.6 levels seen in 2011.
Food Stamps the number of people participating in the Supplemental Nutrition Assistance Program has gone down to 44.3 million from 45.6 million a year ago. However, this is still way higher than 25 million people that participated in food stamps before the financial crisis.
Bacon Cheeseburger Index ¡V This index measures inflation. The index tracks the prices of the bacon, ground beef, and cheese. The popular toppings give an idea of year-over-year price trends. For the last two quarters, the bacon cheeseburger index has been showing deflationary warning signals, meaning prices of food products have gone way down and are not showing any signs of bouncing back.
According to Convergex analyst Nicholas Cove, the indicator gave out cautionary signals long before the Fed publicly revised their long-term growth forecasts lower earlier this month.
Spending power According to a Gallup survey, Americans are spending $93 a day versus $91 a day last year. This is still lower than $98 a day in 2014.
Metals over Mutual funds The six-month rolling averages of U.S. Mint sales of gold and silver bullion coins are $65 million and $85 million respectively. Both are higher than a year ago. By contrast, US mutual funds have seen a total of $31 billion in redemptions this year, reflecting the cautious attitude of investors, who have been dumping risky assets for safe havens due to uncertain global economic outlook.
Large Pick-Up Trucks Convergex uses this indicator for small business growth in ¡§Real America¡¨. Sales in May were down 3.1% from last year, one of the worst drops since mid-2011, according to Crain¡¦s Automotive week database.
Gun Sales More people are buying guns than before. FBI reported that there have been 11.7 million background checks for legal purchases of one gun or more, Colas noted. At that rate, Americans could buy 28 million firearms in 2016 sales. That compares to a three-year rolling average of 21.7 million. This increased buying has reflected on the toplines of the gun makers like Smith & Wesson, who reported a 22.2% jump in their quarterly profits earlier this month.
While guns are typically purchased for self-defense or recreational purposes, Colas said, ¡§we can also infer that a portion of the population also feels some uncertainty over their personal security.¡¨
