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EWM Team

May 15
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India Wholesale Inflation Eases in April

By Inflation Watch

India’s wholesale inflation eased slightly in April helped by a decline in fuel prices.

The wholesale price index rose 5.20% from a year earlier, slower than the 5.70% increase in March, commerce ministry data released Thursday showed. That was better than the median 5.80% rise predicted in a poll of 12 economists by The Wall Street Journal.

Economists are now watching for the onset of the June to September monsoon season to track the rainfall the country receives this year. India’s weather department has forecast below-normal rainfall, a prospect that could hurt farm output and push up food prices in coming months.

While wholesale inflation has eased, consumer inflation in April wasn’t as encouraging.

Government data released Monday showed inflation at the retail level accelerated to 8.59% on-year from 8.31% in March.

Economists say the central bank will be under pressure to keep interest rates elevated as inflation is still moderately higher than the 8% level it wants to bring it down to by January 2015.

May 15
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U.S. Producer prices see largest increase in April in over a year

By Inflation Watch

We are keeping a close eye on indicators that might point to a rise in inflationary pressures. Is the outperformance of Real Assets YTD indicating this?

U.S. producer prices saw their largest increase in over a year last month, hinting at some inflation pressures at the wholesale level.

The Labor Department said its seasonally adjusted producer price index (PPI) for final demand advanced 0.6% in April, marking the biggest rise since September 2012. It was the second consecutive month that metric advanced. In March, the index increased 0.5%.

The Department of Labor’s PPI measures a change in selling prices received by domestic producers. The price index for foods reported the largest increase last month, while energy and transportation and warehousing prices also rose.

 

May 14
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Sell in May?

By General

Picture1

 

Statistically it’s true that on average, over the long term, May through September has been comparatively weak. That’s because the months of May and September have been weak. June, July and August, on average, have been good months. However, any given year can prove to be an exception to the long-term averages.

Picture2

 

(Source: Standard and Poor’s, data through May 1, 2014. The Leuthold Group, with permission)

May 14
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India Inflation Watch

By Inflation Watch

Consumer Inflation rose in April to 8.59%. The elevated inflation levels could pressure on the central bank to keep interest rates at current levels despite pressure from Indian industry to bring them down.

The RBI wants to see consumer inflation ease to 8% by January 2015 and 6% in the following year.

The country’s wholesale price index likely rose 5.80% in April from a year earlier, according to a poll of 12 economists by The Wall Street Journal. The index increased 5.70% in March, which was its fastest rise in three months. The government is scheduled to announce the rate on Thursday.

Food prices rose during the month as vegetable and fruit supplies from a bumper crop earlier in the year dried up. Lower fuel prices helped offset some of the higher food prices, economists said. Indian fuel retailers lowered gasoline prices twice in April.

For the rest of this year economists and weather watchers are worried that below-normal rains during the June through September monsoon season could trigger inflation again.

(Source: Wall Street Journal)

May 12
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Our Favorite Donald Rumsfeld Quote
May 09
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China’s Inflation Slows More Than Estimated

By Inflation Watch

Consumer inflation in China moderated to an 18-month low and the decline in factory-gate prices persisted, giving the government more scope to loosen policies if a growth slowdown deepens.

The consumer price index rose 1.8 percent from a year earlier in April, the National Bureau of Statistics said today in Beijing. That compares with the median estimate of 2.1 percent in a Bloomberg News survey and a 2.4 percent gain in March. The producer-price index fell 2 percent, the 26th straight decline, after a 2.3 percent drop the previous month.

Today’s data add to signs that domestic demand remains muted, with falling commodity prices exacerbating overcapacity in industries including steel and cement. The lack of inflationary pressure will allow the People’s Bank of China to relax monetary policy to support the economy if Premier Li Keqiang’s full-year goal of about 7.5 percent is threatened.

(Source: Bloomberg)

May 09
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AAII Investor Sentiment Survey-Wk ending 5/7/2014

By Investor Sentiment

 

The AAII Investor Sentiment Survey measures the percentage of individual investors who are bullish, bearish, and neutral on the stock market for the next six months; individuals are polled from the ranks of the AAII membership on a weekly basis. Only one vote per member is accepted in each weekly voting period.

Survey Results
Sentiment Survey
ResultsWeek ending 5/7/2014   Data represents what direction members feel the stock market will be in the next 6    months.
Bullish  28.3%
down 1.4
Neutral  43.0%
up 2.2
Bearish  28.7%
down 0.8
Note: Numbers may not add up to 100% because of rounding.


Change from last week: Bullish: -1.4
Neutral: +2.2
Bearish: -0.8

Long-Term Average: Bullish: 39.0%
Neutral: 30.5%
Bearish: 30.5%
Here is what Jon Najarian had to say about this high 43% Neutral position:

It’s the highest level of neutrality in more than 10 years.

It takes quite a bit to convince individual investors to not have an opinion about the market but that’s what the last two months have managed to do. “The market is just grinding,” says optionMONSTER’s Jon Najarian in the attached clip. “It’s been very easy to be in the wrong individual stocks.”

Case in point for Najarian is Twitter (TWTR) which he started buying on the way down, defying his own discipline and incurring a loss prior to a much-needed bounce (which came in shortly after this segment was taped). “The people that can’t decide, the ‘meh’ crowd, that’s probably been the right decision.”

As for the market as a whole history suggests a sharp move follows peaks in neutral sentiment. Going back to 2005 AAII neutral sentiment has pushed to 38 on 4 distinct prior occasions (August 2013, December 2011, November 2010 and December 2011). Looking at the S&P 500 (^GSPC) a month later showed greater than 4% moves each time over the subsequent 30 days.

Unfortunately for traders the back-test doesn’t give a clear sign. Three of the 1-month moves were up with one sharp drop. Still it’s a safe bet that American investors aren’t going to stay neutral for long. Look for Mr. Market to knock people into the bullish or bearish camps in short order.

(Source: AAII, Yahoo Finance)
May 09
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Launch of “Endowment Index”

By Endowment Index™

Financial Products News #2014 – 29
NASDAQ OMX Announces Launch of the Endowment Index Effective May 19, 2014

Markets Impacted:

  • All Markets

Data Feeds Impacted:

  • NASDAQ OMX Global Index Data Service (GIDS 2.0)
  • NASDAQ Global Index Watch (GIW)

Contact Information:

What you need to know:

Effective Monday, May 19, 2014, NASDAQ OMX will begin disseminating the Endowment IndexTM(Symbol: ENDOW) on the NASDAQ OMX Global Index Data ServiceSM (GIDS 2.0).

What is the new Index?

The Endowment IndexTM is an objective benchmark for investors who implement a three dimensional portfolio that incorporates alternative investments.  This investable index is used for portfolio comparison, investment analysis, research and benchmarking purposes by fiduciaries such as trustees, portfolio managers, consultants and advisors to endowments, foundations, trusts, DB/DC plans, pension plans and individual investors.  The Endowment IndexTM has been co-created by Endowment Wealth Management, Inc. and ETF Model Solutions, LLC.

How is the Index disseminated?

Effective Monday, May 19, 2014, data recipients will receive real-time index information from the proprietary GIDS 2.0 data feed with the following attributes:

Instrument ID Instrument Name Currency Frequency FP Type Brand
ENDOW Endowment Index USD 1S I CI

 

In addition to the real-time tick messages, NASDAQ OMX will support the following directory messages on GIDS 2.0:

  • Equities Summary (Message Type F): Disseminated at the end of the U.S. and European trading session to relay the summary of the current trading day’s activity for an equity index.
  • Index Directory (Message Type R): Disseminated at the start of each day to relay basic index information.

Will the components and weightings data be made available?

Yes. For access and more information on the Endowment  on NASDAQ Global Index Watch (GIW), please contact NASDAQ OMX Global Data Sales.

Where can I find additional information?

For questions about NASDAQ OMX Index products, please contact NASDAQ OMX Global Indexes at +1 301 978 8284.

Subscribe to Email Alerts:
NASDAQ OMX is offering customers the ability to self select news delivery across various NASDAQ OMX markets. Create and maintain a profile for updating alert preferences and contact information. Visit the enrollment form on the NASDAQ Trader website and sign up today! Please note that if you choose to unsubscribe from an email list, you may no longer receive potentially critical emails from the NASDAQ Stock Market regarding NASDAQ’s trading and data products, regulatory issues or marketplace initiatives.

About the NASDAQ OMX Group:

The NASDAQ OMX Group, Inc. is the world’s largest exchange company. It delivers trading, exchange technology and public company services across six continents, with more than 3,600 listed companies. NASDAQ OMX offers multiple capital raising solutions to companies around the globe, including its U.S. listings market, NASDAQ OMX Nordic, NASDAQ OMX Baltic, NASDAQ OMX First North, and the U.S. 144A sector. The company offers trading across multiple asset classes including equities, derivatives, debt, commodities, structured products and exchange-traded funds. NASDAQ OMX technology supports the operations of over 70 exchanges, clearing organizations and central securities depositories in more than 50 countries. NASDAQ OMX Nordic and NASDAQ OMX Baltic are not legal entities but describe the common offering from NASDAQ OMX exchanges in Helsinki, Copenhagen, Stockholm, Iceland, Tallinn, Riga, and Vilnius. For more information about NASDAQ OMX, visit www.nasdaqomx.com.

May 07
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US Dollar Index-DXY

By Inflation Watch

US Dollar Index

Is the US dollar headed for a fall despite positive economic data recently?

Stronger than expected non-farm payrolls and a surging composite PMI data were not enough to send real interest rates higher. Treasury yields have fallen due to Ukrainian tensions and weaker than expected PMI data from China. The net effect of these developments has been a weaker US dollar, which looks to be in danger of falling to its lowest levels in two years on a trade-weighted basis.

May 06
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1Q-2014 US GDP Growth Estimate

By Uncategorized

1Q-2014 US GDP Growth Estimate

The Commerce Department reported that the gross domestic product (GDP) only advanced at a 0.1 percent annualized rate in the first three months of the year. According to the Wall Street Journal, economists on average were anticipating at least 1.1 percent growth. While this proved to be one of the weakest quarters for economic growth in the last five years, there were some bright spots in the report, such as total consumer spending rising by 3 percent. Most of the drag was a result of a 2.1 percent decline from business investment spending, which is being attributed to poor weather conditions. While weak business spending could prove to be temporary, the most concerning part of the report was that U.S. exports declined by 7.6 percent, the largest decline since the recession. This portion of the report should be met with some concern considering weakness in other economies around the world could end up being a rather large deterrent to U.S. economic growth, just as domestic consumption is starting to show some durability.

(Source: Wall Street Journal)