A quick look at the LEIs:

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Leading Economic Indicators for July

Lei_july

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via Jake at Econompic

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Via the Conference Board:

The leading index declined sharply in July, the second decrease in the index in the past three months. Building permits, stock prices, and weekly initial claims (inverted) made very large negative contributions to the index this month, more than offsetting positive contributions from the interest rate spread and consumer expectations. The six-month change in the index stands at -0.9 percent (about a -1.8 percent annual rate), up from the 3.4 percent annual rate of decline at the end of the first quarter of 2008. However, the weaknesses among the leading indicators continue to be very widespread.

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Sources:
U.S. LEADING ECONOMIC INDICATORS July 2008
10:00 A.M. ET, Thursday, August 21, 2008
http://www.conference-board.org/pdf_free/economics/bci/LEI0808.pdf

Leading Economic Indicators Index in U.S. Falls 0.7%
Shobhana Chandra
Bloomberg, Aug. 21 2008
http://www.bloomberg.com/apps/news?pid=20601087&sid=aTzqOnZDJIW8&

Category: Data Analysis, Economy, Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

14 Responses to “Chart of the Day: LEI”

  1. NOR says:

    Well, its probably uberbullish news for the US markets..
    I dont get it…
    Now Dow is close to 0 again, who the f..k is buying stocks these days?
    I dont get it…

  2. NOR says:

    I swear I only posted once!

  3. VoiceFromTheWilderness says:

    The leading economic indicators are lagging!

    Less flipantly (slightly): That thar’ looks to be bad news acomin’

  4. leftback says:

    NOR:

    I think with a $6 hike in oil they are buying the energy sector. It has become much larger as a percentage of late, and can make the overall market appear stronger than it really is. You ain’t seen nothing yet, wait for the buying stampede in the last hour.

    Of course there is no HINT of speculation involved in today’s move and not even a whiff of desperation from the hedge fund cowboys trying desperately to deleverage some of their long positions.

    A short squeeze in oil? There is a first time for everything I guess. Applying the usual Ritholtz Rule, an 8-10% bear market rally in oil gets us conveniently from support at 91 to resistance at 100 ($125/barrel). At that point the $ turns up again and the trade reverses….

  5. Mike in NOLa says:

    leftback:

    Please explain the 91 and 100 to which you are referring? It’s probably something obvious, but I’m not a pro. Current rally is beating up on my DUG and SMN. But, I have “conviction.” :)

    BTW, my SRS position has risen in value significantly. Only underwater 1.35% at the moment. :)

  6. km4 says:

    McCain: ‘I Still Believe The Fundamentals Of The Economy Are Strong’
    http://thinkprogress.org/2008/08/20/mccain-econ-strong/

    Jack Cafferty CNN on Bush and McCain

    He will leave office with the country $10 trillion in debt, fighting two wars, our international reputation in shambles, our government cloaked in secrecy and suspicion that his entire presidency has been a litany of broken laws and promises, our citizens’ faith in our own country ripped to shreds. Yet Bush goes bumbling along, grinning and spewing moronic one-liners, as though nobody understands what a colossal failure he has been.

    I fear to the depth of my being that John McCain is just like him.

    Well there’s no and, ifs, or buts and he may be more clueless !

  7. Jonny says:

    DUG hit my stop loss today, a 15% loser, and the Financial Ninja makes a compelling technical case for it to run some more. In tandem, he’s predicting broad equity weakness, which would do nicely for my EEV and SKF.

    Thanks for the great work, Barry. You’ve been a daily read for almost a year and I’m exponentially more well informed today in part as a result.

  8. Jeff says:

    So the only LEI items that are up from printing money and stuffing the channel.

  9. leftback says:

    Mike in NOLa: 91 and 100 are the USO (United States Oil Fund) which is how a lot of people are trading this. USO 100 is more or less equivalent to $125/barrel WTI crude oil.

    BTW, when I trade DUG I usually buy at the very end of the day. After the oil trade closes up, there is usually a big buying frenzy in oil stocks so if you buy earlier during the day you can often incur losses unnecessarily (voice of experience).

    My SRS is where yours is – I see this as a long term play, waiting for the next bubble to burst. Early, as usual. Watch out for that “conviction”.. but nobody is going to be right all of the time – if this was easy we’d all be rich.

  10. I still don’t understand why ETF traders, seemingly, aren’t using Options, as well.

    All the same things, entry points, stop orders, exit points…etc. apply to those Contracts, as well as Shares/ETFs. To say nothing about the ability to, foursquare, predict max. downside..

    Playing with Equity, when “the Market” is playing with Leverage is a good way to get shaken down/out..

    IMO..
    http://www.thefreedictionary.com/foursquare

  11. Gwyan Rhabyt says:

    It seems like the big change was building permits. Isn’t that the spike up (in June) and corresponding fall (in July) due to the New York City building code change on July 1st?

  12. Jonny says:

    Mark,

    My employer forbids me to trade options or hold uncovered shorts. I would most certainly be doing so otherwise. It’s been quite painful to watch many opportunties slip by, most notably FNM and FRE.

  13. Jeff M. says:

    On another note and potential “economic indicator” – I just got my first cold call in the three+ years I’ve lived here from a construction company in the Twin Cities offering 20% off of any home projects for the remainder of the summer.

    After dropping $18K+ for a new roof and another $8K (paid in cash) on other miscellaneous projects (our hourse is nearly 90 years old), I politely declined and asked him to call back next year.

  14. Jonny,

    I hear ya, those restrictions are part of your Economic compensation, that may reduce the Financial value, thereof, for you Labor/Skills.

    just fodder for thought(-er)