The Tycoon Report

Insider Buys and Sells: Weekly Wrap-Up

Monday, March 9, 2009 | Tycoon Staff




Economic Calendar for the Week of March 09 - March 13

Tuesday, March 10

10:00 - Wholesale Inventories

Release Details

    * Importance (A-F):  This release merits a D-.
    * Source: The Census Bureau of the Department of Commerce.
    * Release Time: 10:00 ET around the fifth business day of the month (data for two months prior).
    * Raw Data Available At: http://www.census.gov/svsd/www/mwts.html.

In Brief

The wholesale trade report includes sales and inventory statistics from the second stage of the manufacturing process. The sales figures say close to nothing about personal consumption and therefore do not move the market.

Wholesale inventories sometimes swing enough to change the aggregate inventory profile (aggregate inventory is the sum of inventory at the manufacturing, wholesale, and retail levels), which may affect the GDP outlook. In that event they can elicit a small market reaction. More often than not, however, this release goes unnoticed except by market economists.


Wednesday, March 11

14:00 - Treasury Budget

Release Details

    * Importance (A-F): This release merits a D.
    * Source: U.S. Treasury Department.
    * Release Time: 14:00 ET, about the third week of the month for the prior month.
    * Raw Data Available At: http://www.fms.treas.gov/mts/index.html.

In Brief

The monthly Treasury budget data follow strong seasonal patterns which produce huge month-to-month fluctuations in the deficit. These fluctuations tell us little about long term budget trends. To the extent that the market analyzes the monthly Treasury data, the focus is on year/year changes in receipts and outlays, since the data are not seasonally adjusted. Only in April, the most important month for tax inflows to the Treasury, does the market pay any attention to this report. The data can be predicted with reasonable accuracy by using daily data in the Daily Treasury Statement.


Thursday, March 12

8:30 - Retail Sales, Retail Sales ex-Auto

Release Details

    * Importance (A-F): This release merits an A-.
    * Source: The Census Bureau of the Department of Commerce.
    * Release Time: 8:30 ET around the 13th of the month (data for one month prior).
    * Raw Data Available At: http://www.census.gov/svsd/www/advtable.html.

In Brief

The retail sales report is a measure of the total receipts of retail stores. The changes in retail sales are widely followed as the most timely indicator of broad consumer spending patterns. Retail sales are often viewed ex-autos, as auto sales can move sharply from month-to-month. It is also important to keep an eye on the gas and food components, where changes in sales are often a result of price changes rather than shifting consumer demand.

Retail sales can be quite volatile and the advance reports are subject to rather large revisions. Retail sales do not include spending on services, which makes up over half of total consumption. Total personal consumption is not available until the personal income and consumption reports are released, typically two weeks after retail sales.

Highlights

    * Perhaps it was the seasonal factors. January retail sales were much stronger than expected, increasing 1.0% as there was strength across many sectors.
    * General merchandise store sales were up 1.1% and clothing stores posted a 1.6% increase.
    * Nonstore (online) retailers posted a 2.7% increase.
    * Also contributing to the overall increase was a 1.6% increase in auto sales and a 2.6% increase in gasoline sales.

Key Factors

    * These data are surprising given the soft January same-store sales data already reported for January. Of course, January is, on a not seasonally adjusted basis, a very slow month. So some post-holiday bargain shopping would be magnified by the seasonals.
    * The data have to be taken as good economic news, but also taken with a great deal of skepticism. Perhaps economic conditions are not quite as bad as the worst fears, but there is little likelihood that the January retail sales data signal a new trend or a bottoming in economic activity.


10:00 - Business Inventories

Release Details

    * Importance (A-F): This release merits a C-.
    * Source: The Census Bureau of the Department of Commerce.
    * Release Time: 08:30 ET around the 15th of the month (data for two months prior).
    * Raw Data Available At: http://www.census.gov/mtis/www/current.html.

In Brief

The business inventories report includes sales and inventory statistics from all three stages of the manufacturing process (manufacturing, wholesale, and retail). But by the time it is released all three of its sales components and two of its inventory components have already been reported. Because retail inventory is the only new piece of information it contains, the market usually ignores the business inventories report.

However, sometimes retail inventories swing enough to change the aggregate inventory profile. This may affect the GDP outlook. When it does, the report can elicit a small market reaction.

The aggregate sales figures are dated and they say little about personal consumption. They are actually a good coincident indicator, but the market is far more interested in forward-looking statistics.

The inventory-to-sales (I/S) ratio measures the number of months it would take to deplete existing inventory at current sales rates. A relatively low (high) I/S ratio may mean that manufacturers will have to build up (draw down) inventory levels. Depending on the strength of final demand and the degree to which recent inventory changes have been intended or unintended, this can have an effect on the industrial production outlook. Note that this information is much more useful to market economists than it is to other market participants.


Friday, March 13

8:30 - Export Prices ex-Ag, Import Prices ex-Oil

Release Details

    * Importance (A-F): This release merits an D.
    * Source: Bureau of Labor Statistics, U.S. Department of Labor.
    * Release Time: Typically in the second week of the month at 8:30 ET for the prior month
    * Raw Data Available At: http://www.bls.gov/news.release/ximpim.nr0.htm.

In Brief

Though not a market-moving release, export/import prices are a useful indication of inflation pressures created by changes in foreign exchange rates. For example, when the dollar is strong, import prices tend to be under downward pressure. If an item in Japan costs 500 yen and the exchange rate is 100 yen to the dollar, the US$ price $5. If the dollar then strengthens to Y120, the US$ price falls to $4.17. Because US exports must compete with foreign goods, there is also downward pressure on export prices when the dollar is strong.

Economists typically look at import prices excluding oil and export prices excluding agricultural. In each case, the category in question is excluded because prices for those items are volatile and the swings are unrelated to foreign exchange rates. Oil prices tend to swing in response to OPEC decisions, and agricultural prices are often affected by weather, neither of which say much about long-term trends in traded goods prices.


8:30 - Trade Balance

Release Details

    * Importance (A-F): This release merits a C .
    * Source: The Census Bureau and the Bureau of Economic Analysis of the Department of Commerce.
    * Release Time: 8:30 ET around the 20th of the month (data for two months prior).
    * Raw Data Available At: http://www.census.gov/foreign-trade/www/press.html.

In Brief

The trade report is most widely watched for trends in the overall trade balance. But trends in both exports and imports of goods and services bear watching as well. The export data in particular are important to watch for indications that a strengthening competitive position at home and/or strengthening economies overseas are boosting U.S. growth. Imports provide an indication of domestic demand, but given the severe lag of this report relative to other consumption indicators, it is not particularly valuable for this purpose.

The volatility in the monthly trade balance can play an important role in GDP forecasts. Net exports are a relatively volatile component of GDP, and the trade report provides the only early clues to the net export performance each quarter.


10:00 - Mich. Sentiment-Prel.

Release Details

    * Importance (A-F): This release merits a B-.
    * Source: The University of Michigan.
    * Release Time: Preliminary: 10:00 ET on the second Friday of the month (data for current month); Final: 10:00 ET on the fourth Friday of the month (data for current month).

In Brief

The Michigan index is almost identical to the Conference Board Consumer Confidence index, though there are two monthly releases, a preliminary and final reading. Like the Conference Board index, it has two subindexes - expectations and current conditions. The expectations index is a component of the Conference Board's Leading Indicators index.