Thursday, December 17, 2009

Future Stat of the Week: Leading Economic Indicators

Ok these numbers have already been reported earlier today. If time permitted, we would have talked earlier this week about how the expectations were for a 0.7% increase in the leading indicators and nearly a 10% annual growth rate. With all the noise in the market, its important to step back and reflect on how positive these numbers are for the economy. All the worries about the dollar and this and that are just non sense noise.

On to the report since we have it already. The Conference Board reported today that the leading indicators actually increased by 0.9%. This was above the expectations of 0.7% as mentioned earlier. The 6 month growth rate is now 4.7% or a 9.4% annual rate. Just slightly below the 5% numbers reported the last 2 months.

The interest rate spread (what we've harked on for a while), Average weekly jobless claims, Average workweek, building permits, and stock prices continue to remain very positive. Easily off setting the declines in supplier deliveries and consumer expectations. Money supply and Manufacturers orders were both basically flat.

What really sticks out to us is that even though most of the numbers are extremely bullish and have been for over 6 months now, consumer expectations remain extremely low. This number will be positive in Dec and could be set up for a bullish trend that will last for a while.

The market is down nearly 0.7% as of writing this report which continues to show how the market ignores one of the most important reports around. Does a bad pricing my Citigroup (C) really matter? Does sandbagging by FedEx (FDX) really matter? Does a debt downgrade of Greece really matter? Well, it might if it was new news versus just a 2nd rating agency repeating what the 1st one already told us. What should really matter is what the leading economic indicators tells us about the future. They tell us the future is bright. They tell us that C and FDX will have a wind at their back and not to worry about the spin going on today.

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