Author Archives: Ted Kavadas

The November 2019 Wall Street Journal Economic Forecast Survey – Notable Aspects

The November 2019 Wall Street Journal Economic Forecast Survey was published on November 7, 2019.  The headline is “WSJ Survey: Economists Split on Causes of Hiring Slowdown.”

I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the “Economist Q&A” section.

An excerpt:

Economists are roughly split over whether the recent hiring slowdown reflects primarily a shortage of workers or softening demand for labor, a sign of continuing uncertainty about the outlook.

In The Wall Street Journal’s latest survey of economists, 45.3% blamed the slowdown on the tight labor market, which has made it harder for many employers to find enough workers. An additional 37.7% of respondents said the issue was ebbing desire to expand payrolls.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 30.19%. The individual estimates, of those who responded, ranged from 10% to 60%.  For reference, the average response in October’s survey was 34.19%.

As stated in the article, the survey’s 57 respondents were academic, financial and business economists.  Not every economist answered every question.  The survey was conducted November 1 – November 5, 2019.

Economic Forecasts

The current average forecasts among economists polled include the following:

GDP:

full-year 2019:  2.08%

full-year 2020:  1.72%

full-year 2021:  1.96%

full-year 2022:  1.94%

Unemployment Rate:

December 2019: 3.60%

December 2020: 3.79%

December 2021: 3.97%

December 2022: 4.03%

10-Year Treasury Yield:

December 2019: 1.76%

December 2020: 1.97%

December 2021: 2.29%

December 2022: 2.51%

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Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of November 8, 2019, titled “The November 2019 Wall Street Journal Economic Forecast Survey

_____

RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

Earnings Estimates Trends

S&P500 earnings trends and estimates are a notably important topic, for a variety of reasons, at this point in time.

FactSet publishes a report titled “Earnings Insight” that contains a variety of information including the trends and expectations of S&P500 earnings.

For reference purposes, here are two charts as seen in the “Earnings Insight” (pdf) report of October 18, 2019:

from page 23:

(click on charts to enlarge images)

S&P500 EPS estimates for 2019 & 2020

from page 24:

S&P500 Annual EPS 2009-2020

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Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of October 23, 2019, titled “Trends Of S&P500 Earnings Forecasts

_____

RevSD, LLC offers the above data and projections for informational purposes only, and does not necessarily agree with information provided by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

The October 2019 Wall Street Journal Economic Forecast Survey – Notable Aspects

The October 2019 Wall Street Journal Economic Forecast Survey was published on October 10, 2019.  The headline is “WSJ Survey: Majority of Economists Say Manufacturing Sector in Recession.”

I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the “Economist Q&A” section.

An excerpt:

U.S. manufacturing is in recession, two-thirds of economic forecasters said in a survey, and overall growth in the second half of 2019 is expected to further slow.

In a Wall Street Journal economic survey conducted in recent days, 65.3% of private-sector forecasters said the manufacturing sector was in recession, or two or more consecutive quarters of contraction.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 34.19%. The individual estimates, of those who responded, ranged from 10% to 70%.  For reference, the average response in September’s survey was 34.79%.

As stated in the article, the survey’s 55 respondents were academic, financial and business economists.  Not every economist answered every question.  The survey was conducted October 4 – October 8, 2019.

Economic Forecasts

The current average forecasts among economists polled include the following:

GDP:

full-year 2019:  2.17%

full-year 2020:  1.61%

full-year 2021:  1.85%

full-year 2022:  1.95%

Unemployment Rate:

December 2019: 3.61%

December 2020: 3.89%

December 2021: 4.02%

December 2022: 4.07%

10-Year Treasury Yield:

December 2019: 1.68%

December 2020: 1.92%

December 2021: 2.28%

December 2022: 2.54%

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Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of October 11, 2019, titled “The October 2019 Wall Street Journal Economic Forecast Survey

_____

RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

“CFO Signals” Report – Excerpts

Recently Deloitte released their “CFO Signals” “High-Level Summary” report for the 3rd Quarter of 2019.

As seen in page 2 of the report, there were 172 survey respondents.  As stated:

“Each quarter (since 2Q10), CFO Signals has tracked the thinking and actions of CFOs representing many of North America’s largest and most influential companies.

All respondents are CFOs from the US, Canada, and Mexico, and the vast majority are from companies with more than $1 billion in annual revenue. For a summary of this quarter’s response demographics, please see the sidebars and charts on this page. For other information about participation and methodology, please contact [email protected]

Here are some of the excerpts that I found notable:

from page 3:

Perceptions

How do you regard the status of the North American, European, and Chinese economies? Perceptions of North America fell to a six-year low, with 68% of CFOs rating current conditions as good (down from 79% last quarter), and 15% expecting better conditions in a year (down from 24%). Perceptions of Europe slid to just 5% and 2%; China sits at 20% and 11%. Page 6.

What is your perception of the capital markets? Eighty-seven percent of CFOs say debt financing is attractive (up from 77%). Equity financing attractiveness fell for both public (from 40% to 31%) and private (35% to 34%) company CFOs. Sixty-three percent say US equity markets are overvalued, about even with last quarter. Page 7.

Sentiment

What external/internal risks worry you the most? CFOs express even stronger concerns about the impact of US trade policy on global growth, and rising concerns about Brexit, the broader European economy, and the 2020 US elections. Talent is again the dominant internal concern, and there are rising concerns about data security and the need to adapt and innovate. Page 8.

Compared to three months ago, how do you feel about the financial prospects for your company? The net optimism index declined from last quarter’s +9 to -5 this quarter—the first negative reading in nearly seven years. Twenty-six percent of CFOs express rising optimism (30% last quarter), and 31% express declining optimism (21% last quarter). Page 9.

Expectations

What is your company’s business focus for the next year? CFOs indicate a bias toward revenue growth over cost reduction (51% vs. 22%), investing cash over returning it (48% vs. 18%), current offerings over new ones (44% vs. 35%), and current geographies over new ones (62% vs. 22%). Page 10.

How do you expect your key operating metrics to change over the next 12 months? YOY revenue growth expectations rose from 3.8% to 4.3%. Earnings growth slid from 6.1% to 5.6% (a new survey low), while capital spending fell from 7.7% to 3.6%, and hiring fell from 1.9% to 1.6% (both sit at three-year lows). Dividend growth rose from 3.7% to 3.9%. Page 11.

from page 9:

Sentiment

Optimism regarding own-companies’ prospects

Own-company optimism turned negative for the first time in nearly seven years. Canada is highest at just +10, with the US and Mexico overwhelmingly negative at -4 and -50, respectively.

Net optimism peaked in 1Q18 at +54, then declined sharply through the rest of the year. It rebounded somewhat in the first part of 2019, but remained among the lowest levels from the prior three years.

Last quarter, it retreated to just +9, and this quarter it slid sharply to -5, the first negative reading since the fourth quarter of 2012. Twenty-six percent of CFOs expressed rising optimism (down from 30%), while 31% cited declining optimism (up from 21%).

Net optimism for the US declined sharply from last quarter’s +15 to just -4, the lowest level in nearly seven years. Canada rose from last quarter’s -25 to +10. Mexico declined from last quarter’s dismal -43 to -50, the second lowest level in the last two years.

Healthcare/Pharma, Manufacturing, Financial Services, and Services were all overwhelmingly pessimistic (-36, -31, -12, and -7, respectively). Technology was again most optimistic at +53; Retail/Wholesale and Energy/Resources were only mildly positive.

Please see the full report for industry-specific charts. Note that industry sample sizes vary and that results are volatile for the smallest. Due to a small sample size, T/M/E was not used as a comparison point.

from page 11:

Expectations

Growth in key metrics, year-over-year

Earnings expectations slid to a new survey low, and capital spending and hiring declined to three-year lows; Manufacturing led most declines, but Retail/Wholesale and Technology were relative bright spots.

Revenue growth rose from 3.8% to 4.3%, but sits at its second-lowest level since 4Q16. The US rose, but is near its two-year low. Canada rose to just above its two-year average. Mexico rose, but remains below its two-year average. Technology leads; Manufacturing and Healthcare/Pharma trail.

Earnings growth declined from 6.1% to 5.6%, the lowest level in survey history. The US fell to a survey low. Canada rose to well above its two-year average. Mexico dipped to a four-year low. Technology and Retail/Wholesale lead; Manufacturing and Healthcare/Pharma trail.

Capital spending growth fell from 7.7% to just 3.6%, tying the three-year low. The US slid to a two-year low. Canada rose, but remains below its two-year average. Mexico slid to a six-year low. Financial Services, Healthcare/Pharma, and Retail/Wholesale are highest; Energy/Resources and Manufacturing are lowest.

Domestic personnel growth slid from 1.9% to 1.6%, the lowest level since 3Q16. The US fell to its lowest level in nearly three years. Canada slid to well below its two-year average. Mexico rose to just above its two-year average. Technology and Retail/Wholesale lead; Energy/Resources trails.

Dividend growth rose from 3.7% to 3.9%, but remains well below the two-year average.

Please see the full report for industry-specific charts. Note that industry sample sizes vary and that results are volatile for the smallest. Due to a small sample size, T/M/E was not used as a comparison point.

Among the various charts and graphics in the report are graphics depicting trends in “Own Company Optimism” on page 9 and “Economic Optimism” found on page 6.

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RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

—–

RevSD, LLC (revsd.com) is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

Earnings Estimates Trends

S&P500 earnings trends and estimates are a notably important topic, for a variety of reasons, at this point in time.

FactSet publishes a report titled “Earnings Insight” that contains a variety of information including the trends and expectations of S&P500 earnings.

For reference purposes, here are two charts as seen in the “Earnings Insight” (pdf) report of September 13, 2019:

from page 12:

(click on charts to enlarge images)

S&P500 earnings forecast trends

from page 13:

S&P500 EPS trends since 2009

_____

Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of September 17, 2019, titled “Trends Of S&P500 Earnings Forecasts

_____

RevSD, LLC offers the above data and projections for informational purposes only, and does not necessarily agree with information provided by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

The September 2019 Wall Street Journal Economic Forecast Survey – Notable Aspects

The September 2019 Wall Street Journal Economic Forecast Survey was published on September 12, 2019.  The headline is “Economists Don’t See Path to 3% Growth in 2019.”

I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the “Economist Q&A” section.

An excerpt:

The Trump administration’s goal of achieving economic growth of 3% or better is looking increasingly remote this year, according to forecasters surveyed by The Wall Street Journal.

Private-sector economists surveyed in recent days expect U.S. gross domestic product to expand an inflation-adjusted 2.2% this year on average, measured from the fourth quarter a year earlier. Forecasters expect economic growth will slow to 1.7% in 2020 and will be 1.9% in 2021.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 34.79%. The individual estimates, of those who responded, ranged from 10% to 67%.  For reference, the average response in August’s survey was 33.57%.

As stated in the article, the survey’s 60 respondents were academic, financial and business economists.  Not every economist answered every question.  The survey was conducted September 6 – September 10, 2019.

Economic Forecasts

The current average forecasts among economists polled include the following:

GDP:

full-year 2019:  2.20%

full-year 2020:  1.68%

full-year 2021:  1.85%

full-year 2022:  1.99%

Unemployment Rate:

December 2019: 3.67%

December 2020: 3.87%

December 2021: 4.09%

December 2022: 4.13%

10-Year Treasury Yield:

December 2019: 1.69%

December 2020: 1.97%

December 2021: 2.24%

December 2022: 2.41%

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Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of September 13, 2019, titled “The September 2019 Wall Street Journal Economic Forecast Survey

_____

RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

Earnings Estimates Trends

S&P500 earnings trends and estimates are a notably important topic, for a variety of reasons, at this point in time.

FactSet publishes a report titled “Earnings Insight” that contains a variety of information including the trends and expectations of S&P500 earnings.

For reference purposes, here are two charts as seen in the “Earnings Insight” (pdf) report of August 9, 2019:

from page 9:

(click on charts to enlarge images)

trends of S&P500 EPS forecasts

from page 10:

S&P500 EPS 2009-2020

_____

Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of August 20, 2019, titled “Trends Of S&P500 Earnings Forecasts

_____

RevSD, LLC offers the above data and projections for informational purposes only, and does not necessarily agree with information provided by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

The August 2019 Wall Street Journal Economic Forecast Survey – Notable Aspects

The August 2019 Wall Street Journal Economic Forecast Survey was published on August 8, 2019.  The headline is “Economists See Greater Chance of September Rate Cut, WSJ Survey Says.”

I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the “Economist Q&A” section.

An excerpt:

The overwhelming majority of economists—87.8%—also see risks to the economic outlook as tilted to the downside. That was up from 69.6% last month and the highest level since the start of 2015. Most respondents mentioned trade as the main risk to the economy.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 33.57%. The individual estimates, of those who responded, ranged from 10% to 65%.  For reference, the average response in July’s survey was 30.10%.

As stated in the article, the survey’s respondents were academic, financial and business economists.  Not every economist answered every question.  The survey was conducted August 2 – August 5, 2019.

Economic Forecasts

The current average forecasts among economists polled include the following:

GDP:

full-year 2019:  2.21%

full-year 2020:  1.75%

full-year 2021:  1.80%

Unemployment Rate:

December 2019: 3.65%

December 2020: 3.90%

December 2021: 4.04%

10-Year Treasury Yield:

December 2019: 2.01%

December 2020: 2.19%

December 2021: 2.39%

____

Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of August 9, 2019, titled “The August 2019 Wall Street Journal Economic Forecast Survey

_____

RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

Earnings Estimates Trends

S&P500 earnings trends and estimates are a notably important topic, for a variety of reasons, at this point in time.

FactSet publishes a report titled “Earnings Insight” that contains a variety of information including the trends and expectations of S&P500 earnings.

For reference purposes, here are two charts as seen in the “Earnings Insight” (pdf) report of July 12, 2019:

from page 23:

(click on charts to enlarge images)

S&P500 earnings forecasts trends

from page 24:

S&P500 annual earnings since 2009

_____

Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of July 19, 2019, titled “Trends Of S&P500 Earnings Forecasts

_____

RevSD, LLC offers the above data and projections for informational purposes only, and does not necessarily agree with information provided by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

The July 2019 Wall Street Journal Economic Forecast Survey – Notable Aspects

The July 2019 Wall Street Journal Economic Forecast Survey was published on July 12, 2019.  The headline is “President Trump’s Criticism of the Fed Hasn’t Shifted Perception of Its Independence, Economists Say.”

I found numerous items to be notable – although I don’t necessarily agree with them – both within the article and in the “Economist Q&A” section.

An excerpt:

Economists said they expected the Fed’s policy rate would average 1.99% at the end of the year, suggesting forecasters were largely split between those who saw the Fed cutting rates once this year and those who saw two rate cuts.

As seen in the “Recession Probability” section, the average response as to the odds of another recession starting within the next 12 months was 30.10%. The individual estimates, of those who responded, ranged from 2% to 60%.  For reference, the average response in June’s survey was 30.07%.

As stated in the article, the survey’s respondents were 53 academic, financial and business economists.  Not every economist answered every question.  The survey was conducted July 5 – July 9, 2019.

Economic Forecasts

The current average forecasts among economists polled include the following:

GDP:

full-year 2019:  2.2%

full-year 2020:  1.75%

full-year 2021:  1.84%

Unemployment Rate:

December 2019: 3.61%

December 2020: 3.84%

December 2021: 4.06%

10-Year Treasury Yield:

December 2019: 2.18%

December 2020: 2.38%

December 2021: 2.58%

____

Please Note – The above is excerpted from the EconomicGreenfield.com (published by RevSD, LLC) post of July 16, 2019, titled “The July 2019 Wall Street Journal Economic Forecast Survey

_____

RevSD, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

—–

RevSD, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.