Tomorrow’s US industrial production report for September will be postponed due to the government shutdown. Although the numbers are produced by the Federal Reserve, which remains operational thanks to funding that’s independent of Congressional approval, the central bank advises that this report relies on “a range of data from other government agencies, the publication of which has been delayed as a result of the federal government shutdown.” When (or if) September’s report sees the light of day is unclear at this point. That said, industrial production for September is expected to rise 0.2% over the previous month, according to The Capital Spectator’s average econometric forecast. Keep in mind that this forecast is impaired because it doesn’t reflect updates to the R-4 and VAR-7 models (see definitions below), which rely in part on the latest payrolls data. Unfortunately, the September employment report from the government is still a mystery due to the budget impasse in Congress. Using the available numbers, the Capital Spectator’s average forecast of a 0.2% rise for September industrial production represents a lesser pace from the previously reported 0.4% gain for August. Meanwhile, the Capital Spectator’s average projection for September is below several consensus forecasts based on recent surveys of economists.
Daily Archives: October 16, 2013
US Housing Starts: September 2013 Preview
Tomorrow’s report on US housing starts for September will likely be postponed due to the government shutdown. When (if?) this update is published, US housing starts are expected to total 891,000 (seasonally adjusted annual rate), according to The Capital Spectator’s average econometric forecast. The projection represents a modest decline vs. the previously reported 891,000 total for August. Meanwhile, in contrast with The Capital Spectator’s average prediction, several consensus forecasts drawn from surveys of economists anticipate a moderate rise in September housing starts vs. the previous month.
Looking For Value… In Price Signals?
Recognizing value as a risk factor of significance is firmly established in the academic literature and it’s widely applied in the real world of money management. It’s not hard to understand why. Buying assets on the cheap has an encouraging history of delivering the performance goods, and there’s quite a lot of theoretical support for explaining why that’s so. The problem, of course, is that deciding if a given asset or asset class is priced at a discount is tricky in real time. One reason is because the traditional metrics of choice for estimating value—book value, earnings, and other accounting measures—are reported with a considerable time lag. Even worse, some asset classes (i.e., commodities) can’t be valued properly, if at all, by the cash-flow standards that apply to stocks, bonds and real estate. Value investing, in other words, requires a fair amount of time and effort. But in a bid to generate real-time value signals that can supplement the traditional methods, a recent paper offers an intriguing idea: look to Mr. Market’s price signals for guidance.