Below is a chart and brief excerpt from today’s Market Situation Report written by Tier 1 Alpha. If you’re interested in learning more about the Hedgeye-Tier 1 Alpha partnership, there’s more information here.
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BONUS CHART Today, in our macro corner, we're spotlighting the Dallas Fed manufacturing data released yesterday. True to the adage, everything is bigger in Texas, except for the current state of manufacturing. Although it may not be the most exciting Tuesday morning read, if you're a macro enthusiast, looking over the complete Dallas Fed report is well worth your time. The report includes a special questionnaire, gathering perspectives from Texas's manufacturing, service sector and retail outlook. Some insights from the respondents are interesting. Remember, this survey-based data collected from 91 manufacturers is a valuable source of direct, boots-on-the-ground information. |
In July, the Dallas Fed Manufacturing Activity reported a value of -20, slightly better than the expected -22.5. The Production index dipped to -4.8 from -4.2, while Capacity Utilization improved from -6.0 to -2.4. However, the New Orders index worsened from -16.6 to -18.1, with the growth rate also decreasing from -23.7 to -20.6. Shipments showed a significant improvement, rising from -17.0 to -2.2. The Raw Materials Prices Paid index improved substantially, going from 1.4 to 10.5, while the Wages and Benefits index declined from 25.3 to 19.1.
While this might only be a regional survey, the disconnect between equity markets and the fundamental data is quite unbelievable. But this is precisely why Tier 1 exists: to measure the flows in relation to the real economy. These two are not the same, which once again confirms our belief that it's difficult to witness a major recession while the economy is virtually at full employment.
