Tuesday, April 17, 2012


When the bull market first started in 2009, the bears growled that the rebound in earnings was all attributable to cost cutting. So it wasn’t sustainable, in their opinion. They didn’t believe, and couldn’t imagine, that revenues might actually have a normal recovery too. I track three measures of business revenues, which are all at record highs now:

(1) Manufacturing & Trade Sales is a monthly series compiled by the US Bureau of the Census. It combines manufacturing shipments, wholesalers’ sales, and retail sales. During February it rose to a new record high of $14.8 trillion (saar), exceeding the previous cyclical high by 1.7%. It isn’t comprehensive because it includes revenues from the sale of all goods, but not services. While the comparable GDP measure is limited to final sales of goods, business sales includes intermediate sales as well.

(2) S&P 500 Revenues is available quarterly. During Q4-2011, it rose to a record high of $2,468 billion. The four-quarter sum was $9,571 billion, slightly exceeding the previous cyclical peak of this series during Q3-2008.
(3) S&P 500 Forward Revenues is a weekly series that I calculate on an aggregate basis in billions of dollars. It is a time-weighted average of industry analysts’ consensus revenue expectations for the current and coming years. It is a proxy for 52-week expected forward revenues, and it rose to a record high of $10,026 billion during the week of March 16.

Today’s Morning Briefing: America’s Consummate Consumers (1) The US is still the greatest show on earth. (2) This year won’t be 2010 and 2011 if US economy performs well. (3) Consumer Discretionary leading bull market’s shopping spree. (4) Earnings driving consumer cyclical stocks. (5) Retailers are getting a bit pricey. (6) S&P 500 revenues have fully recovered. (7) Consuming is more fun than retrenching and deleveraging. (8) Lots of pent-up demand. (9) Slicing and dicing retail sales and Retailing earnings and valuation.  (More for subscribers.)

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