SKY News Summary 03-11-10
Most of the market has been focused on troubles in the housing market and the resultant effects on the economy. A report from RealtyTrac out today shows the number of foreclosures slowing to 6% year-over-year, the smallest annual rise in four years. If we have gotten a handle on residential lending problems, will commercial lending problems be the next drain on the economy? An answer may be found in a report released by The Census Bureau on March 1, entitled, “Value of Construction Put in Place.” While the report provides data on construction, not on lending, it shows the federal, state and local share of construction (especially highways, up 17.7% yoy) growing, while the private share of construction is shrinking (down 14.3% yoy). The shift in construction spending will mean more government spending, but may not mean a tightening of bank credit and defaults to the extent we experienced when the troubled housing market led us into the recession.
http://www.census.gov/const/C30/release.xls
http://www.realtytrac.com/contentmanagement/pressrelease.aspx?channelid=9&itemid=8695
The Treasury’s deficit report for the month of February shows a $61.8 billion increase in the current fiscal year-to-date deficit to $220.9 billion, from last year’s February year-to-date deficit of $589.8 billion. The increase is mainly due to TARP outlays shown under Treasury Department outlays.
http://www.fms.treas.gov/mts/mts0210.pdf
ICSC- Goldman Sachs reported strong chain store sales for the week ending March 6. In fact, this was “the strongest year-over-year gain in the ICSC-Goldman Sachs (ICSC-GS) chain store sales index, for the week ending March 6, since July 14, 2007 when it also posted a similarly large gain.” Consumers may be using credit to pay for their purchases as a report from the Federal Reserve shows consumer installment credit rising by $ 5 billion in January.
http://www.icsc.org/homepage/research_article.php?id=115
http://federalreserve.gov/releases/g19/Current/
The Mortgage Bankers Association’s Purchase Index increased 5.7 percent from one week earlier in a positive sign for the housing industry. More increases may come with the approach of April’s stimulus expiration date.
http://www.mbaa.org/NewsandMedia/PressCenter/72129.htm
The Department of Labors’ weekly initial unemployment claims report for the week ending March 6, showed very little change from the week before. While weather has wreaked havoc on most of February’s data, this current data should be accurate. The advance figure for seasonally adjusted initial claims was 462,000, a decrease of 6,000 from the previous week’s revised figure of 468,000. The 4-week moving average was 475,500, an increase of 5,000 from the previous week’s revised average of 470,500.
http://www.dol.gov/opa/media/press/eta/ui/current.htm
Sources: MBAA, Census, ReatyTrac, ISCS, Federal Reserve, and Treasury websites.
SKY News Summary 03-04-2010
Strong retail numbers are a very promising sign when combined with Tuesday’s ISM’s Manufacturing survey showing a growing backlog of orders.
The Mortgage Bankers Association released its Weekly Mortgage Applications Survey for the week ending February 26, 2010, showing the Index increased 14.6 percent from one week earlier, due mainly to refinancing. The refinance share of mortgage activity increased to 69.1 percent of total applications from 68.1 percent the week before, as rates dropped to 4.95 percent from 5.03 percent.
http://www.mbaa.org/NewsandMedia/PressCenter/72000.htm
ADP reported that employment decreased 20,000 from January to February 2010 on a seasonally adjusted basis, and was the smallest drop since employment began falling in February of 2008. ADP’s numbers are not affected by the weather, but they do not include the hiring of temporary Census workers which will by included in the BLS estimate out tomorrow.
http://www.adpemploymentreport.com/
U.S. chain store sales rose by a strong 3.7% on a comparable store basis last month, remarkable given February’s weather. Target comparable-store sales, for example, rose 2.4 percent. Nordstrom’s same-store sales rose 10.3 percent in February.
http://www.icsc.org/homepage/research_article.php?id=112
http://investors.target.com/phoenix.zhtml?c=65828&p=irol-newsArticle&ID=1398886&highlight=
http://phx.corporate-ir.net/phoenix.zhtml?c=93295&p=irol-newsArticle&ID=1398888&highlight=
Sources: MBAA, ADP, ICSC, Target, Nordstroms, and ISM websites.
SKY News Summary 03-02-2010
The data being released for the month of February shows the influence of major snow storms around the country. These numbers should make March numbers look great. The January numbers, however, seem to indicate slow improvement.
The ICSC-Goldman Sachs chain store sales index for the week ending February 27 declined by 0.8% on a week-over-week basis, but rose by 0.7% on a year-over-year basis. Given that most of the New England was covered in snow and without power, that number looks pretty good.
http://www.icsc.org/homepage/research_article.php?id=111
On March 5, the Labor Department will release the employment report for the month of February. The report however, is based on the pay period that includes February 12 and is usually just one-week’s worth of data. The week of February 12th, the nation was buried in snow which may significantly skew the “monthly” employment situation report.
http://www.bls.gov/ces/cesprog.htm#Reference_Period
http://www.erh.noaa.gov/lwx/events/?event=20100210
The Department of Commerce released January’s construction spending figures which showed a decline of 0.6 percent in total construction spending. The weakness, however, is in private nonresidential spending which dropped 2.1 percent. Private residential construction was actually up by 0.6 percent as was public highway construction, up 1.2 percent from December. It is interesting to note that, in January, total public construction spending was $306.9 billion, while total private construction spending was $577.3 billion.
http://www.census.gov/const/C30/release.pdf
Personal income increased $11.4 billion, or 0.1 percent, in January according to the Bureau of Economic Analysis. Disposable personal income (DPI) decreased $47.6 billion, or 0.4 percent reflecting an increase in federal income taxes. Farm wages (which dropped $7.9 billion, in contrast to an increase of $5.9 billion in December), rental income (which decreased $0.9 billion in January, in contrast to an increase of $1.9 billion in December), and investment income (which decreased $20.8 billion, in contrast to an increase of $11.0 billion) were partially offset by contributions for government social insurance which increased $16.7 billion in January, compared with an increase of $0.3 billion in December. Employer contributions were boosted by $10.2 billion in January by increases in unemployment-insurance rates. Personal saving — DPI less personal outlays — was $367.2 billion in January, compared with $467.9 billion in December. Personal saving as a percentage of disposable personal income was 3.3 percent in January, compared with 4.2 percent in December.
http://www.bea.gov/newsreleases/national/pi/2010/pi0110.htm
The ISM Manufacturing Survey shows a slight decline in new export and import orders, but a strong increase in backlog of orders which may indicate a rise in employment in the coming months. Backlog of orders rose from 56.0 to 61.0 in February.
http://www.ism.ws/ISMReport/MfgROB.cfm
Applied Materials 1Q2010
http://www.appliedmaterials.com/investors/assets/1Q10fin_web.pdf
CBS FY 2009
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MzIyNDZ8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1
Nestle FY 2009
http://www.nestle.com/Resource.axd?Id=4EF5E333-11BC-47A5-A1A0-754E8257559E
Target
http://investors.target.com/phoenix.zhtml?c=65828&p=irol-newsArticle&ID=1394056&highlight=
Medtronic
http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MzI1OTZ8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1
Warren Buffett’s Chairman’s letter is always interesting to read:
http://www.berkshirehathaway.com/2009ar/2009ar.pdf
Sources: Bureau of Labor Statistics, Berkshire Hathaway, Masco, Medtronic, Target, CBI, Nestle, CBS, Applied Materials, NOAA, ICSC-Goldman Sachs, Bureau of Economic Analysis, Department of Commerce, and ISM Manufacturing websites.