Wednesday, January 16, 2013

Fundamental Stock Market Indicator

The first week of 2013 saw our FSMI--a good coincident indicator that can confirm or raise doubts about stock market swings--slide 2.1% after climbing a total of 12.2% the final four weeks of 2012. Our FSMI is the average of our Boom-Bust Barometer (BBB) and Bloomberg’s Weekly Consumer Comfort Index (WCCI). The BBB dipped 1.3% after a four-week jump of 17.2%. Jobless claims--a BBB component--rose to 365,750 (4-wa) after falling steadily from a Hurricane Sandy-related spike of 408,250 to 359,000 the prior four weeks. The CRB raw industrials spot price index component bounced off recent lows but is moving sideways currently. The WCCI slumped 3.8%, after hovering around eight-month highs.

Today's Morning Briefing: Reviving Revenues. (1) Looking for positive revenue surprises. (2) Record high dividends. (3) Another new record high for business sales. (4) Tracking S&P 500 revenues with world crude oil demand and US tax receipts. (5) Commodity prices and the dollar no longer weighing on revenues. (6) Q3’s revenue losers: Utilities, Materials, & Energy. (7) Top three revenue winners: Telecom, Consumer Discretionary, and Tech. (8) Q4 retail sales boosted real GDP. (9) Retailers should continue to shine. (More for subscribers.)

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