2013 August Capital Market and Economic Review (Video)

Even with much of the country on vacation as well as the world, August 2013 was a month with important events occurring.

August 2013 Video by John Kvale

Earning estimates and confessions slow

As we have noted throughout the year analyst estimate have been too high and continue to drop.

S & P 500 Estimates 2013

The Great GDP Revision

Ed Dolan at Seeking Alpha wrote a nice article about the changing of the GDP calculation. We were somewhat surprised at the easy acceptance of the new data, as we wrote before the adjustments.

GDP Revisions Ed Dolan

Pretty much all you need to know can be inferred by the chart above…yes, the new numbers are better…hmmmmm

Interest Rates continue to march higher

Higher Rates are a headwind to stocks and a downer for the value of bond holdings. August, while a quiet month often, saw rates as low as 2.55% only to see a high of 2.92%…approaching the 3% first digit handle.

10 Year Yield 9-4-13

Bad month end Economic numbers, one time or trend beginning? New HOmes Sales and Durable Goods

New home sales comments from Econoday released 8-23-13:

“In a report that strongly shakes up the housing outlook, new home sales plunged to a 394,000 annual rate in July vs the Econoday consensus for 487,000 and the Econoday low estimate of 450,000. And there’s more bad news. For a second month in a row, the report includes major downward revisions to the two prior months totaling 62,000 in this report. The 394,000 rate for July is the lowest since October with low double-digit monthly declines hitting three of four regions and a mid-single digit monthly decline hitting the Northeast.”

The following Monday, 8-26-13, durable good orders came in weaker than expected as well. As the chart shows below, this is a volatile metric.

Durable Goods Econoday 8-26-13

Have a Great Day!

John Kvale

8222 Douglas Ave # 590
Dallas, TX 75225

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