This morning's release of industrial production and capacity utilization numbers sparked some early interest in the markets as the index perked up in April.  Utilities played a key role along with a bump in manufacturing pushing the industrial production index higher by 1.1 percent.  The rise offset the sharp decline of 0.6 percent in March, however, excluding motor vehicles, which are still be shoved onto dealer lots, the manufacturing component only gained back half of the 0.6 percent decline last month.  Capacity utilization improved to 79.2 percent from 78.4 percent in March.  This isn't necessarily all good...

The bad news is that commodities, and related commodity stocks from energy to miners, continue to be hammered due to the retraction of the liquidity pump by the Fed.  The decline in liquidity, the resurging crisis in Europe and general concerns about the U.S. economy is leading to commodities being dumped across the spectrum as money moves back to the "safety" trade of the U.S. Dollar and government treasuries.

Today's release of CPI showed the index to be virtually flat from last month but up 2.3% on a year over year basis. This is down from 2.7% and the slowest pace of gains (CPI is at a record high) since February...

Retail sales slowed sharply in April rising only 0.1 percent, following a 0.7 percent increase in March (originally up 0.8 percent).  No real surprise here but it is interesting to see retailers beginning to show signs of strain in recent earnings' reports. The concern continues to be the pressure on consumers from rising energy and food prices without commensurate increases in wages.  While the current trend of consumption is encouraging it is where the consumption is being derived that is concerning.

As we reported yesterday we see very disturbing trends in disability claims, school loans and consumer credit rising...

"Sex" and "Money" are probably two of the most powerful words in the English language.  First, those two words got you to look at this article.  They also sell products, books and services from "How To Have Better Sex" to "How To Make More Money" — ostensibly so you can have more of the former. Unfortunately, they are also the two primary causes of divorce in the country today.

Behind the mainstream media's attention to the daily economic numbers there is a hidden economic depression running along the underbelly of the country.  High levels of unemployment have kept pressures on wages even as work hours have...

When the first estimate of Q1 GDP was released we wrote:  "Given the impact from higher oil and gas prices on the economy, which is a real and pervasive tax on the consumer as discussed recently, it is highly likely that we will see downward revisions to Q1 GDP in the next two months."  Today's release of the trade data confirms this will be likely.

The U.S. trade deficit widened much more than expected in March as imports surged to a record high.  This is a negative to the GDP calculation which takes into account net exports (exports minus imports) as part of the calculation.  Furthermore, the trade gap grew 14.1...

The battle lines have been drawn as the next evolution of the crisis in the Eurozone will likely be determined in the next 12-18 months as austerity runs up against the socialist agenda. The problems are real and the solutions are evident. In order for the Eurozone to survive the shift from a fragmented confederacy of states to a constitutional union with a primary central bank with the ability to issue its own currency is crucial. However, without unification under a binding agreement the future of the Eurozone is bleak and the next crisis will sweep the globe.

The problem today is "too many chiefs and no Indians"...

In last weekend's newsletter we wrote,"The good news is that the market is currently hovering just above support at 1360 with further support at 1350 just below it. This has been the case for the bulk of the current correction and consolidation process.  The bad news is that the market has now issued an initial 'sell' signal as of Friday’s close which brings our level of alert up sharply.

It is rare that our initial weekly sell signal does not give way to a confirmed sell signal – it can happen, it just does not happen often, so we need to pay attention.  The market is currently playing out very similar to 2010...

The National Federation of Independent Business (NFIB) released their monthly survey for April today.  The good news is that the index increased 2 points this month to 94.5 from March's reading of 92.5.  The bad news is that the index is exactly where it was in February of last year and still at levels well entrenched in a normal recessionary environment.  As stated in the release this really isn't much a surprise "since nothing much happened during that time [last 12 months] that would make owners more optimistic about the future."

In the last month attitudes about making plans to increase employment, make capital...

Last week was spent in Carlsbad, California at the 9th Annual Strategic Investment Conference.  Because of my absence I did not have a chance to follow up with many of the very important economic reports that hit the wires.  Over the last several months we have been cautioning against the bullish exuberance due to the varied anomalies that were skewing the economic data.   This past week is showing the early development of those warnings on a variety of different measures from manufacturing related data to employment. 

Manufacturing

We wrote early last week after the release of the ISM report that: "This [ISM]...

STRATEGIC INVESTMENT CONFERENCE - DAY 1

May 3, 2012

If you have not read the notes of the first three presentations here are the links to Niall Ferguson on "Civilization", Dr. Woody Brock on "American Gridlock" and David Rosenberg from Gluskin Sheff. The last presentation I will report on from Day 1 of the conference is Dr. Lacy Hunt from Hoisington Research. Dr. Hunt was a previous member of the Federal Reserve board and is the Executive Vice President of Hoisington Investment Management who has run arguably one of the best performing bond funds over the past 25 years. With that I present the notes from Dr. Lacy...