The CBOE Volatility Index posted its biggest daily jump yesterday since the day following Britain’s vote to exit from the European Union, which upset markets around the world last June. The VIX measures expectations for market swings in the S&P 500 index 30 days in the future.
The so-called Fear Index was up about 46 percent on the day. That is its biggest daily move since June 24. when the index jumped 49.3 percent. The S&P Index lost nearly 2 percent on the day.
Still, the level for the so-called fear gauge remains low compared with its long-term average of 20. This one-day climb comes just a week after the fear gauge registered its lowest close since 1993.
Thursday, May 18, 2017
Wednesday, May 17, 2017
Industrial Output: The Latest Good News
U.S. industrial output rose sharply in April, the latest evidence that economic growth is picking up following a lackluster start to the year. Manufacturing output, the biggest component of industrial production, posted its strongest gain since early in 2014, pushing the Fed’s manufacturing index to a new post-recession high.
Industrial production—a measure of output at factories, mines and utilities—jumped 1.0 percent from a month earlier. That might not sound like much, but it was the largest gain in more than three years.
The strong showing follows a string of upbeat April indicators, including the unemployment rate falling to its lowest level since 2007, solid consumer spending gains at online sellers, restaurants and other retailers, and existing-home sales climbing at their fastest pace in a decade.
Industrial production—a measure of output at factories, mines and utilities—jumped 1.0 percent from a month earlier. That might not sound like much, but it was the largest gain in more than three years.
The strong showing follows a string of upbeat April indicators, including the unemployment rate falling to its lowest level since 2007, solid consumer spending gains at online sellers, restaurants and other retailers, and existing-home sales climbing at their fastest pace in a decade.
Monday, May 15, 2017
The Slow Road to 2400
The S&P 500 finished above 2400 for the first time ever yesterday, crossing a barrier that had proven elusive for months. This wasn't the first time it reached 2400, but it was the first time it had closed there.
The benchmark index first topped 2400 in intraday trading more than two months ago, on March 1, but dropped back below that level before the session ended. In the last few trading days, the index held just below 2400 on a closing basis.
The slow rise is a measure of how calm the stock market has been lately. The S&P 500 rose just 0.48 percent on Monday, its 14th straight session without an absolute move of 0.50 percent or more. That matches a streak last seen in 1995.
The benchmark index first topped 2400 in intraday trading more than two months ago, on March 1, but dropped back below that level before the session ended. In the last few trading days, the index held just below 2400 on a closing basis.
The slow rise is a measure of how calm the stock market has been lately. The S&P 500 rose just 0.48 percent on Monday, its 14th straight session without an absolute move of 0.50 percent or more. That matches a streak last seen in 1995.
Sunday, May 14, 2017
The Retail Split
We talked last week about the problems that department store stocks have been having this quarter. It's not about dropping retail sales: A Commerce Department report on Friday showed a seasonally adjusted 0.4 percent jump in retail sales in April, as well as revisions higher to prior data.
But the data also showed a growing divide: sales among nonstore retailers, which includes online shopping, jumped 1.4 percent, while department-store sales had a much smaller increase of 0.2 percent. Nonstore sales are up nearly 12 percent over the past 12 months, while department store sales were down 3.7 percent.
So the news has been good for online retailers; Amazon’s shares climbed 0.6 percent Friday morning. But Nordstrom sank 8.2 percent, Dick’s dropped 6.6 percent, and J.C. Penney fell 7.6 percent. All are down more than 10 percent on the year, and J.C. Penney has fallen more than 40 percent.
But the data also showed a growing divide: sales among nonstore retailers, which includes online shopping, jumped 1.4 percent, while department-store sales had a much smaller increase of 0.2 percent. Nonstore sales are up nearly 12 percent over the past 12 months, while department store sales were down 3.7 percent.
So the news has been good for online retailers; Amazon’s shares climbed 0.6 percent Friday morning. But Nordstrom sank 8.2 percent, Dick’s dropped 6.6 percent, and J.C. Penney fell 7.6 percent. All are down more than 10 percent on the year, and J.C. Penney has fallen more than 40 percent.
Friday, May 12, 2017
Department Store Woes
There's one little segment of the economy that continues to show sign of trouble: Department stores. Big retailers have begun to report results for the first quarter, and the news is not pretty.
Macy’s reported Thursday a worse-than-expected drop in revenue during the first quarter as same-store sales marked a particularly large slide. Kohl’s said same-store sales fell more than expected. Nordstrom reported that same-store sales slipped 0.8 percent versus a year ago.
Macy's promptly sank 15 percent. Nordstrom dropped 8 percent, and Kohl's fell 6.4 percent. The three stocks were the worst performers in the S&P 500 for the session. The SPDR S&P Retail exchange-traded funds fell 2.4 percent on the day.
Macy’s reported Thursday a worse-than-expected drop in revenue during the first quarter as same-store sales marked a particularly large slide. Kohl’s said same-store sales fell more than expected. Nordstrom reported that same-store sales slipped 0.8 percent versus a year ago.
Macy's promptly sank 15 percent. Nordstrom dropped 8 percent, and Kohl's fell 6.4 percent. The three stocks were the worst performers in the S&P 500 for the session. The SPDR S&P Retail exchange-traded funds fell 2.4 percent on the day.
Thursday, May 11, 2017
In the Black
Here's some good news: The federal government ran its second highest monthly surplus on record this April. In its monthly budget report, the Treasury Department said yesterday that the surplus for April totaled $182.4 billion, the second largest surplus after a record $189.8 billion surplus set in April 2001.
Wait a minute, you're thinking: Don't most people pay their taxes in April? Yes they do.The government generally runs surpluses in April, and this year's was inflated because of a deadline change that allowed corporations until April to make their final tax payments for last year.
Through the first seven months of the current budget year, which ends in September, the federal government is running a deficit of $344.4 billion. That's still down 2.4 percent from the same period a year ago.
Wait a minute, you're thinking: Don't most people pay their taxes in April? Yes they do.The government generally runs surpluses in April, and this year's was inflated because of a deadline change that allowed corporations until April to make their final tax payments for last year.
Through the first seven months of the current budget year, which ends in September, the federal government is running a deficit of $344.4 billion. That's still down 2.4 percent from the same period a year ago.
Wednesday, May 10, 2017
The Changing Face of Retirement
American are working longer because they want to, not because they have to. That’s according to Gallup's Economy and Personal Finance survey, which shows that 11 percent intend to work full time once they hit retirement age—while just 25 percent of employed Americans plan to stop working altogether.
Among the would-be full-time retirement workers, the majority plan to do so because they want to, not because they have to, and the proportion of “want to” versus “will have to” explanations has risen slightly since 2013. The percentage who say they want to keep working just part time has also increased, from 34 percent to 44 percent.
Two 1995 polls revealed that an average of 14 percent said they expected to retire after 65 and 49 percent before 65. Current retirees present a different image: 68 percent said they retired before age 65, while just 30 percent worked till 65 or older.
Among the would-be full-time retirement workers, the majority plan to do so because they want to, not because they have to, and the proportion of “want to” versus “will have to” explanations has risen slightly since 2013. The percentage who say they want to keep working just part time has also increased, from 34 percent to 44 percent.
Two 1995 polls revealed that an average of 14 percent said they expected to retire after 65 and 49 percent before 65. Current retirees present a different image: 68 percent said they retired before age 65, while just 30 percent worked till 65 or older.
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