Blue World Economic Index®
Scale: -2 to +2
Release Date: Usually the first Business Day of Each Month
Release Site: www.blueworldassetmanagers.com
Management Value: Critical
Wednesday, January 04, 2017
HAPPY NEW YEAR!
We have said, for so many years, “Policy matters and these aren’t working.” We’ve also pointed out that the markets have become more sensitive to anticipated and announced government action than to actual economic fundamentals. Boy, did this election prove that point! There was a significant move to the North in the BWEI® in the last three weeks of November and continued into December data. The most current and relevant of this data was in the Consumer category where all measures bent sharply upward and continued as cabinet picks, large employer action, and policy hints trickled out (often in 140 characters or less.)
December ended at -.25, up .04 from November. For the year, 2016 was quite weak with the Index posting a twelve month average of -.37, a material deterioration from 2015’s -.11. That’s about the end of the negatives. Six out of eight major categories remain under water but six out of eight also showed material improvement lead by Services, Consumer, and General measures. Manufacturing overall showed a modest improvement (.04) which wouldn’t really be attention getting except that a consistent theme was improved optimism and outlook with a very noticeable jump of .11 in the Federal Reserve Manufacturing Districts sub-group.
Some of us remember that in 1980 it all started with a little optimism. After that, policy has to materialize reasonably near as outlined and the economy can break through.
Policy Matters. Let’s see if a change in direction translates to better success than that of recent times.
The BLS jobs report will be out Friday. Our analysis will follow and then Matt goes live at 12:09p Central on AM780 and 105.9FM in Chicago to discuss it on WBBM’s Noon Business Hour. Click Podcast to find it later in the day.
Have a great January and we’ll see you back here at the end of the month!