VettaFi | Advisor Perspectives

The second estimate for Q3 GDP came in at 5.15%, an acceleration from 2.06% for the Q2 third estimate. With a per-capita adjustment, the headline number is lower at 4.55%, an increase from 1.60% for the Q2 headline number.

Bitcoin's price hovered about $37,000 this past week as the digital currency closed each day of the past week between $37,000 and $38,000. BTC is now up ~126% year to date. Here's the latest charts on three of the largest cryptocurrencies by market share through 11/28.

Real gross domestic product increased at an annual rate of 5.2% in Q3 2023, according to the second estimate. The latest estimate is higher than the forecasted 4.9% growth and is more than double the pace of the Q2 2023 GDP final estimate of 2.1%.

Gas prices fell for a tenth straight week, the longest streak since the summer of 2022. As of November 27, the price of regular and premium gas each fell by 5 cents from the previous week. The WTIC end-of-day spot price for crude oil closed at $74.86, down 3.8% from last week.

Fifth district manufacturing activity slowed in November, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite manufacturing index fell to -5 in November from 3 in October, marking its 1st negative reading in the past 3 months. This month's reading was worse than the forecasted reading of 1.

The Conference Board's Consumer Confidence Index® bounced back in November following three straight monthly declines. The index increased to 102.0 from October's downwardly revised reading of 99.1. This month's reading was better than expected, exceeding the 101.0 forecast.

Home prices continued to trend upwards in September as the benchmark 20-city index rose for a eighth consecutive month. The S&P Case-Shiller Home Price Index revealed seasonally adjusted home prices for the 20-city index saw a 0.7% increase month-over-month (MoM) and a 3.9% increase year-over-year (YoY). After adjusting for inflation, the MoM was reduced to 0.1% and the YoY was reduced to -2.9%.

The Federal Housing Finance Agency (FHFA) house price index (HPI) continued to increase in September, coming in at 414.8. U.S. house prices increased by 0.6% from the previous month and by 6.1% from one year ago. After adjusting for inflation, the real index is up 0.4% month-over-month and up 4.0% year-over-year.

Five of the eight indexes on our world watch list posted gains through November 27, 2023. Tokyo's Nikkei 225 finished in the top spot with a YTD gain of 28.18%. The U.S.'s S&P 500 finished in second with a YTD gain of 18.99% while France's CAC 40 finished in third with a YTD gain of 9.69%.

The Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for November. The latest general business activity index came in at -19.9, down 0.7 from last month. This is the third consecutive monthly decline in the general business activity index and marks the 19th consecutive month it has been in contraction territory.

The October release for new home sales from the Census Bureau came in at a seasonally adjusted annual rate of 679,000 units. New home sales were down 5.6% month-over-month from a revised rate of 719,000 in September and up 17.7% from one year ago. The median home price is now at $409,300, down 3.0% from September after adjusting for inflation.

FINRA has released new data for margin debt, now available through October. The latest debt level fell for a third straight month to $635.28 billion. Margin debt is down 6.7% month-over-month (MoM) and down 2.2% year-over-year (YoY). However, after adjusting for inflation, debt level is down 6.7% MoM and down 5.3% YoY.

Consumer sentiment fell for a fourth consecutive month in November according to the final report for the Michigan Consumer Sentiment Index. The index came in at 61.3, down 2.5 points (-3.9%) from the October final. This morning's reading was above the forecast of 60.4.

New orders for manufactured durable goods fell more than expected in October, coming in at $279.44B. This is a 5.4% decrease from the previous month and is more than the expected 3.1% decline. The series is up 0.3% year-over-year (YoY). If we exclude transportation, "core" durable goods were unchanged from the previous month and up 1.3% from one year ago.

Existing home sales fell further, remaining at their lowest level since 2010, as lack of inventory and high mortgage rates continued to impact sales. According to the data from the National Association of Realtors (NAR), existing home sales fell 4.1% from September to reach a seasonally adjusted annual rate of 3.79 million units. This figure came in lower than the expected 3.90 million. Existing home sales are down 14.6% compared to one year ago.

The Chicago Fed National Activity Index (CFNAI) dropped to -0.49 in October from -0.02 in September. All four broad categories of indicators used to construct the index decreased from September and all four categories made negative contributions in October. The index's three-month moving average, CFNAI-MA3, fell to -0.22 in October from 0.00 in September.

The yield on the 10-year note ended November 17, 2023 at 4.44%, the 2-year note ended at 4.88%, and the 30-year at 4.59%.

The Conference Board Leading Economic Index (LEI) fell for a 19th consecutive month in October as the LEI resumed signaling a recession in the near term. The index dropped 0.8% from last month to 103.9, the index's lowest reading since May 2020.

I've updated this series to include the October release of the consumer price index as the deflator and the monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $49,185, down 8.1% from over 50 years ago. After adjusting for inflation, hourly earnings are below their all-time high from April 2020.

In October, housing starts rose to a seasonally adjusted annual rate of 1.372 million, surpassing the forecasted 1.345 million. This marks a 1.9% increase from September and a 4.2% decline compared to one year ago.

In October, building permits reached a seasonally adjusted annual rate of 1.487 million, surpassing the forecasted 1.450 million. This marks a 1.1% increase from September and a 4.4% decline compared to one year ago.

In October, nominal home values increased for a 7th straight months while "real" home values fell for a 2nd straight month. Last month's ZHVI came in at $346,653, up 0.26% from the previous month and up 1.75% from one year ago. However, after adjusting for inflation, the real figures are -0.14% month-over-month and -4.77% year-over-year.

The latest Kansas City Fed Manufacturing Survey composite index declined again in November and the future outlook inched down. The composite index came in at -2, up from -8 in October, while the future outlook dropped to -1.

High mortgage rates continue to impact builder confidence as the National Association of Home Builders (NAHB) Housing Market Index (HMI) fell for a fourth consecutive month. With that said, recent macroeconomic data suggest improved conditions in the coming months. The index dropped 6 points from last month to 34, the index's lowest level since December 2022.

Industrial production declined for the first time in four months in October. On a monthly basis, industrial production fell 0.6%, a larger drop that the projected 0.3% decline. Additionally, compared to one year ago, industrial production showed a decrease of 0.68%.

The latest Philadelphia Fed manufacturing index rose this month but remained in negative territory for the 3rd straight month, indicating a continued decline overall. In November, the index increased to -5.9, coming in above the forecast of -9.0. The six-month outlook fell to -2.1, its first negative reading in 6 months.

Month-over-month nominal retail sales in October were down 0.1% and up 2.48% year-over-year. However, after adjusting for inflation, real retail sales were down 0.2% MoM and down 0.73% year-over-year.

Manufacturing activity grew modestly in New York State, according to the Empire State Manufacturing November survey. The diffusion index for General Business Conditions rose 13.7 points from last month to 9.1. This morning's reading was better than the forecast of -2.8 and pushes the index back into expansion territory.

The Census Bureau's Advance Retail Sales Report for October revealed a 0.1% decrease in headline sales compared to September, marking the first month consumers have pulled back their spending since March. The latest figure was less than the anticipated 0.3% monthly decline. Core sales (ex Autos) beat expectations by increasing 0.1% in October compared to the expected 0.2% decline.

Wholesale inflation rose less than expected in October as producer price growth slowed for the first time in four months. The producer price index for final demand was down 0.5% month-over-month (s.a.). On an annual basis, headline PPI decelerated from 2.2% in September to 1.3% in October.

Over the last year and a half, we have seen some of the highest inflation rates since the second of the two recessions in the early 1980s. Over the past year we have slowly made our way back down but core CPI remains elevated, sitting at a level last seen in the early 1990s, while headline CPI is near levels seen in the early 2010s.

The Consumer Price Index for Urban Consumers (CPI-U) released for October puts the year-over-year inflation rate at 3.24%. The latest reading keeps inflation below the 3.75% average since the end of the Second World War for the 5th straight month. However, inflation remains above the 10-year moving average which is now at 2.71%.

Let's do some analysis of the Consumer Price Index, the best-known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U.

The headline number for the NFIB Small Business Optimism Index fell to 90.7 in October, as small business owners continued to not feel optimistic about current business conditions. The latest reading was better than the forecast of 90.5 but marked the 22nd straight month the index has been below the series average of 98.1.

Inflation cooled in October with both headline and core CPI readings coming in lower than expected. According to the Bureau of Labor Statistics, the headline figure for the Consumer Price Index dropped to 3.2% year-over-year, slightly lower than the 3.3% forecast. The core CPI reading came in at 4.0%, just below the 4.1% forecast.

Travel on all roads and streets increased in September. The 12-month moving average was up 0.1% month-over-month and was up 1.4% year-over-year. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) was unchanged MoM and up 0.2% YoY.

The 20th century Baby Boom was one of the most powerful demographic events in the history of the United States. We've created a series of charts to show seven age cohorts of the employed population from 1948 to the present.

Today, one in three of the 65-69 cohort, nearly one in five of the 70-74 cohort, and nearly one in ten of the 75+ cohort are in the labor force.

The labor force participation rate (LFPR) is a simple computation: You take the civilian labor force (people aged 16 and over employed or seeking employment) and divide it by the civilian non-institutional population (those 16 and over not in the military and or committed to an institution). As of October, the labor force participation rate is at 62.7%, down from the previous month.

Our monthly workforce analysis has been updated to include the latest employment report for October. The unemployment rate rose to 3.9% and the number of new non-farm jobs (a relatively volatile number subject to extensive revisions) came in at 150K.

Let's take a close look at October's employment report numbers on Full and Part-Time Employment. The latest data shows that 83.5% of total employed workers are full-time (35+ hours) and 16.5% of total employed workers are part-time (<35 hours).

Multiple jobholders account for 5.3% of civilian employment. The survey captures data for four subcategories of the multi-job workforce, the relative sizes of which we've illustrated in a pie chart.

Household debt rose by $228 billion (1.34%) to $17.29 trillion in Q3 2023. The increase in debt this month was largely driven by mortgage, credit card, and student loan balances. Mortgage balances increased to $12.14 trillion, credit card balances to $1.08 trillion, and student loan balances to $1.6 trillion.

What does the ratio of unemployment claims tell us about where we are in the business cycle and recession risk?

The U.S. international trade in goods and services is published monthly by the Bureau of Economic Analysis with data going back to 1992 and details U.S. exports and imports of goods and services. In September, the trade deficit expanded by 4.9% to $61.54B. The latest reading was above the forecast of $59.90B.

There is a general belief that there are four big indicators that the NBER Business Cycle Dating Committee weighs heavily in their cycle identification process. This commentary focuses on one of those indicators, nonfarm employment. October saw a 150,000 increase in total non-farm payrolls and the unemployment rate increased to 3.9%.

The Institute of Supply Management (ISM) has released its October services purchasing managers' index (PMI). The headline composite index is at 51.8, which was below the 53.0 forecast. The latest reading marks the 10th straight month the index has been expansion territory.

The October US services purchasing managers' index (PMI) conducted by S&P Global came in at 50.6, just below the 50.9 forecast. The latest reading keeps the index in expansion territory for the 9th straight month.

The moving average for vehicle sales per capita series peaked in August 1978. Fast forward 45 years, it is down 38.7% from that peak.

The latest employment report showed 150,000 jobs were added in October, less than the expected addition of 180,000 new jobs. Meanwhile, the unemployment rate increased to 3.9%.

Here is a look at real (inflation-adjusted) charts of the S&P 500, Dow 30, and Nasdaq composite since their 2000 highs. We've updated this through the October 2023 close.

Here's an interesting set of charts that will especially resonate with those of us who follow economic and market cycles. Imagine that five years ago you invested $10,000 in the S&P 500. How much would it be worth today, with dividends reinvested but adjusted for inflation? The purchasing power of your investment has increased to $13,791 for an annualized real return of 6.45%.

The S&P 500 real monthly averages of daily closes peaked in November of 2021 and 2022 was a bear market. Let's examine the past to broaden our understanding of the range of historical trends in market performance.

With the Q3 GDP advance estimate and the October close data, we now have an updated look at the popular "Buffett Indicator" -- the ratio of corporate equities to GDP. The current reading is 180.6%, up from 173.1% the previous quarter.

Our monthly market valuation updates have long had the same conclusion: US stock indexes are significantly overvalued, which suggests cautious expectations for investment returns. On August 4, 2020, the 10-year Treasury yield hit its all-time low of 0.52%. As of October 31, it was 4.88%.

Here is a summary of the four market valuation indicators we update on a monthly basis.

• The Crestmont Research P/E ratio
• The cyclical P/E ratio using the trailing 10-year earnings as the divisor
• The Q ratio, which is the total price of the market divided by its replacement cost
• The relationship of the S&P composite price to a regression trendline

Based on the October S&P 500 average of daily closes, the Crestmont P/E of 31.8 is 113% above its arithmetic mean, 131% above its geometric mean, and is at the 96th percentile of this 14-plus-decade series.

Here is the latest update of a popular market valuation method, Price-to-Earnings (P/E) ratio, using the most recent Standard & Poor's "as reported" earnings and earnings estimates, and the index monthly average of daily closes for the past month. The latest trailing twelve months (TTM) P/E ratio is 22.1 and the latest P/E10 ratio is 28.7.

The Q Ratio is the total price of the market divided by the replacement cost of all its companies. The latest Q-ratio is at 1.47, down from 1.53 in September.

Quick take: At the end of October, the inflation-adjusted S&P 500 index price was 118% above its long-term trend, down from September.

About the only certainty in the stock market is that, over the long haul, over-performance turns into underperformance and vice versa. Is there a pattern to this movement? Let's apply some simple regression analysis to the question.

The latest job openings and labor turnover summary (JOLTS) report showed that job openings were little changed in September from August's downwardly revised level. Vacancies inched up to 9.553 million, higher than the expected 9.250 million vacancies.

The ADP employment report showed that 113K nonfarm private jobs were added in October, a pickup from the 89K private jobs added in September. The latest figure is lower than the expected 150K new private jobs and is the second smallest monthly increase since January 2021.

Over the last decade, the general trend has been consistent: The rate of homeownership has struggled. The Census Bureau released its latest quarterly report for Q3 2023 showing the latest homeownership rate is at 66.0%, up 0.1% from Q2 2023.

The latest Underlying Inflation Gauge full data set for September is 2.9%, down 0.1% from last month, while the prices-only measure is 2.2%, down 0.2% from last month. Current Headline CPI is now 3.7% and Core CPI is 4.2%.

This chart series features an overlay of four major secular bear markets: the Crash of 1929, the Oil Embargo of 1973, the Tech Bubble, and the Financial Crisis. The numbers are through the September 29, 2023 close.

Five out of the 12 Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia. The September average of the five districts is -6.5, down from the previous month.

We've updated our periodic look at the Philly Fed ADS Index which includes real GDP (Q2 2023 third estimate) and initial jobless claims through 9/23.

The Census Bureau has posted its advance report on new orders for durable goods for August. This series dates from 1992 and is not adjusted for either population growth or inflation. Let's review durable goods data with those two adjustments.

The Chicago Fed's National Activity Index is based on 85 economic indicators drawn from four broad categories of data. Two of the four broad categories of indicators used to construct the index decreased from July. All four categories made negative contributions in August.

The U.S. Census Bureau and the Department of Housing and Urban Development published their August findings for new residential housing starts and building permits. Over the long haul, the two series offer a compelling study of trends in residential real estate. Here is an overlay of the two series since the 1959 inception of the starts and permits data, which was tracked beginning a year later.

Earlier this week we posted an update on the median household income for the 50 states and DC based on the Current Population Survey, a joint undertaking of the Census Bureau and Bureau of Labor Statistics, which includes annual data from 1984 to 2022. Let's now look at the actual purchasing power of those median incomes. For this adjustment, we're using the "C2ER Cost of Living Index" produced by C2ER, the Council for Community and Economic Research.

The median US income in 2022 was $74,580, up from $22,420 in 1984 — a 233% rise over the 38-year time frame. However, if we adjust for inflation chained in 2022 dollars, the 1984 median is $56,780, and the increase drops to 31%.

This month, the Census Bureau released its annual report on household income data for 2022. Last year the median (middle) average household income fell by 2.3% to $74,580. Let's take a closer look at the quintile averages, which dates from 1967, along with the statistics for the top 5%.

What is the value of education for household income? The Census Bureau's annual survey data for 2022 published in earlier this month gives us some interesting insights into this question. The median income for all households with a householder age 25 and older was $75,980.

The median household is the statistical center of the Middle Class. Let's take a closer look at the Census Bureau's latest annual household income data, issued earlier this month, with a focus on middle class income. In this update, we'll focus on the growing gap between the median (middle) and mean (average) household incomes across the complete time frame of the Census Bureau's annual reporting, which began in 1967, to the release of the annual data for 2022.

Our commentary on household income distribution focuses on average household incomes over the 50+ year history of this data series. The analysis offers some fascinating insights into U.S. household incomes, but misses the implications of age for income. In this update, we examine household income from a different perspective with a focus on age bracket.

Pop Quiz! Without recourse to your text, your notes, or a Google search, what line item is the largest asset in Uncle Sam's financial accounts?

• A) U.S. Official Reserve Assets
• B) Total Mortgages
• C) Taxes Receivable
• D) Student Loans

The latest monthly employment report showed 187,000 nonfarm jobs were added in August. An industry breakdown of that number shows a gain of 151,000 service-providing jobs and a gain of 36,000 goods-producing jobs.

Here's the top 10 most popular AP Charts of 2022.