Bespoke Stock Seasonality: 4/17/17
This content is for members onlyETF Trends: US Indices & Styles – 4/17/17
Steel, metals and mining, and banks continue to provide the worst returns in the ETF universe we track. Energy companies have also suffered. The best performers have come from South Africa, Turkey (where President Erdogan won a referendum expanding his presidential powers over the weekend), long-term bonds, and precious metals.
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Empire Manufacturing Drops to Lowest Level Since November
Today’s Empire Manufacturing report for the month of April came in weaker than expected on the headline reading, but the report wasn’t all bad. While economists were forecasting the headline index to come in at a level of 15.0 from last month’s reading of 16.4, the actual reading was 5.2, or the lowest reading since November. Digging a little bit deeper into the report, though, while current General Business conditions declined, expectations for six months from now actually saw a slight increase. Additionally, as shown in the lower chart, plans for both Capital Expenditures and Technology Spending increased. In the case of Cap Ex, that reading hit a two-plus year high.
The table below breaks down this month’s report by each of the individual categories. As shown, breadth was relatively strong as the majority of the weakness in current conditions was in New Orders and to a lesser degree, Average Workweek, and Unfilled Orders.
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Homebuilder Sentiment Backs Off From Multi-Year Highs
After a surge to new multi-year highs in March, homebuilder sentiment for April backed off a bit more than expected. While economists were expecting the headline reading in sentiment to fall down one notch from 71 to 70, the actual decline was three ticks to 68. Looking at the long-term chart, however, it’s hard to get too concerned about this reading at this point as it barely registers as even a blip. Longer term, the trend in sentiment is still positive.
The table to the right breaks down this month’s report by Present and Future Sales, Traffic, and regional sentiment. Both Present and Future Sales were down by equal amounts in April, and Traffic saw just a modest decline. On a regional basis, outside of the West region where sentiment is the strongest, homebuilders in the rest of the country are all a bit less optimistic this month than they were in March.
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