Todd Sullivan | TalkMarkets | Page 14
Hedge Fund Manager, Owner of ValuePlays and Angel Investor
Contributor's Links: ValuePlays Rand Strategic Partners
Todd Sullivan is a Massachusetts-based value investor and a General Partner in Rand Strategic Partners. He looks for investments he believes are selling for a discount to their intrinsic value given their current situation and future prospects. ...more

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Chemical Activity And Truck Tonnage Rebound
The Chemical Activity Barometer (CAB) and Trucking Tonnage Index (TTI) continue to rebound. 3 charts show how these indicators relate to economic activity and the SP500 long and short term and their relationship to each other.
S&P 500 Intrinsic Value Update - Tuesday, June 30
The Value Investor Index is updated with the latest Trimmed Mean PCE inflation report. The market perception that oil prices are a significant factor for inflation is not supported by recent events.
Oil Consumption Recovers
US Petroleum Consumption was ~17.6mil BBL/Day in early March 2020 prior to COVID-19. Currently rising to 15.9mil BBL/Day represents a recovery to 90% of previous consumption levels and a sign of decent economic recovery.
Tale Of Two Tapes: Recovery Data V Bubble Forecasts
Momentum Investors judge economic activity by using the price-trends of the largest stocks in the SP500. In the current environment, this means the 10 issues titled Mega-Caps in today’s marketplace which includes some of the FAANG.
Retail Sales Accelerate
Retail Sales are reported higher by ~18%, well ahead of expectations and equity markets are higher in response.
Mobility Trends Reach Pre-COVID Levels
The Apple Mobility Trend through June 5th shows a level of activity back to pre-shutdown levels. While not a true economic measure, it provides insight to general economic trends likely predictive of shifts in these trends.
NBER Says Recession Started In February….Data Contradicts
It appears that NBER’s primary focus is the yield curve not the whole package of economic indicators available.
Claims Continue To Fall
The markets began to rebound as soon as it appeared that Initial Jobless Claims had peaked.
S&P Intrinsic Value Update - Thursday, June 4
Dallas Fed reports the 12mo Trimmed Mean PCE at 1.88%, down a little from the prior month’s 2.01% which in turn was revised higher from 1.96%.
Oil Situation - Thursday, June 4
When one looks at all the data, the US Oil Situation from last week is mostly unchanged.
Still Flowing
LNG has grown to ~50% of natural gas exports. LNG pricing has risen ~45%, from $3.6 to $5.2/MMcf since Jan 2016 and despite falling pipeline pricing has continued to rise reflecting global demand.
Data Continues To Rebound
The question is “How do you know the market is near a bottom?” No one can ever know with absolute certainty because market prices are determined by market psychology at the time.
Improvement Continues
While predictions continue to be dire, the Initial Claims for Unemployment Insurance have fallen by more than 60% in a rapid decline from the March 23rd report.
FAANG Still Leading
The latest data shows that FANG stocks have returned to pre-COVID-19 levels. The SP500 w/o FANG performance stands well below pre-COVID-19 levels.
Oil Market Rationalizes Economic Activity
Oil prices are rising sharply with the early evidence supplied from Initial Unemployment Claims falling rapidly below peak levels. Market psychology improved quickly.
Claims Continue Falling
There is a strong correlation with the pace of Initial Claims for Unemployment and the SP500 which spans 50yrs.
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