1. WHAT TWO WORDS WHEN COMBINED HAVE THE MOST LETTERS
WHILE YOU WAIT
WHAT TWO WORDS WHEN COMBINED HAVE THE MOST LETTERS
POST OFFICE

2. THE FIVE TACKIEST ADVISOR WEBSITE PHOTOS
5. Retired couple posed with toddler grandchildren
4. Advisor meeting with clients
3. Smiling young couple
2. Advisor and team at a meeting
1. Retired couple walking on the beach

3. Redtail Info!
DAVID

4. BIGFOOT INVESTMENTS - OPEN FORUM
Sep 13, 2018
WELCOME!
Volume #345

5. AGENDA WELCOME! ADMIN NOTES QUOTE OF THE DAY SWAPS AND SPREADS
OPTIMISM GAUGE
DIAGNOSTICS GAGE
FED TRACKER
SUM AND SUBSTANCE
WEEKLY INTELLIGENCE
GLOBAL PERSPECTIVE
DAVID’S CORNER
ADVISOR INPUT
QUESTIONS/COMMENTS

6. NOWEB

7. The man who reads nothing at all……
“QUOTE” OF THE DAY:
The man who reads nothing at all……
….....is better educated than the man who reads nothing but newspapers.
Thomas Jefferson

8. Optimism Gauge
As of: 9/13/2018

9. Measuring Our Economy Indicator Current Value Prior/Metric Value
Change
Measuring Our Economy
Last Update: 9/13/2018
Weekly Updates
New Monthly Updates
Indicator
Current Value
Prior/Metric Value
St Louis Fed Financial Stress Index
-1.267
(Rev)
+1.0
Chicago Fed National Act Index (3 Mon M/A)
0.05 (Jul)
+0.20 Jun (Rev)
-.50
Unemployment
3.9% (Aug)
3.9% (Jul)
+2.00
Weekly Jobless Claims (4Wk Mov Av)
208,000
210,000 (Rev)
+.50
ECRI Weekly Index (Against 52 Wk Av)
147.3
Conf Board Leading Indicators (NEW)
110.7 (Ju7/1/2018)
110.0 (Jun)
University of Michigan Sentiment – Final
96.2 (Final – Jul 2018)
97.9 (Final – Jun 2018)
Monthly Retail Sales – ex Autos (Adjusted)
404,441 (Jul)
402,058 (Jun) Rev
(402,883)
NFIB Small Business Sentiment
108.8 (Aug)
107.9 (Jul)
ISM Manufacturing
63.1 (Aug) Expansion >50
58.1 (Jul)
Economic Capacity Utilization
78.05% (Jul)
78.11% (Jun) (Rev)
Stock Market Moving Averages
Weekly Data Points
N/A
S&P Case-Shiller 20 City Comp Index (YoY)
6.3% (Jun)
6.5% (May) Rev

10. Economic Optimism Index
Measuring our Economy 10 20 30 40 50 60 70 80 90
100
Economic Optimism Index
Current:
Prior:
91.98%
READING AS OF: 9/13/2018
Current Reading:
91.98%
Trend: Negative
Prior Reading:
92.17% (Rev)
Bias: Positive

11. STEADY MQ index Source: BigFoot Investments 01/26/2016: -0.162
Current:
Last:
Aver over period:
Source: BigFoot Investments

12. Week of: Sep 10th, 2018 BigFoot Investments
Market Diagnostics
Week of: Sep 10th, 2018
BigFoot Investments

13. SENTIMENT INDICATORS
1. AAII Investor Survey
2. TSP Sentiment Survey
3. NAAIM Survey of Manager Sentiment
4. CBOE Volatility Index
INTERNAL INDICATORS
5. S&P D MA and 200D MA AND 2/10 MA
6. NYSE Bullish %
7. S&P 500 Bullish % ($BPSPX)
8. Percent of NYSE stocks above 200DMA
9. Percent of NYSE stocks above 10WMA
or 50DMA ($NYA50R)
10. NYSE 52-Week New Highs and New Lows
11. Percent of S&P500 stocks above 200DMA
12. Percent of S&P500 stocks above 50DMA
ADDED INDICATORS
13. Option Sentiment
14. Option Buyers Sentiment Gauge (OBSG)
15. Consumer Sentiment Index
16. Nasdaq Sentiment Index
17. Rydex Nova/Ursa Sentiment Indicator

14. 0%
Prior: 11.76%

15. Evans Chicago Williams New York Bostic Atlanta Kashkari Minneapolis
MEMBER
DISTRICT
TOPIC
LINK TO SOURCE
Evans
Chicago
Effective lower bound looms closer than should feel comfortable.
I believe {facilitating the long run} will entail moving policy first toward a neutral setting and then likely a bit beyond neutral to help transition the economy onto a long-run sustainable growth path with inflation at our symmetric 2 percent target.
Williams
New York
“I don’t see the flat yield curve or inverted yield curve as being the deciding factor in terms of where we should go with policy,” he said.
What is happening with bond yields this year is natural.
I’m not worried about inflationary pressures picking up any time soon, and that means we can continue to be relatively patient about normalizing monetary policy and allow this economy to continue to grow and be strong,”
Bostic
Atlanta
U.S. central bank needs to keep raising interest rates… it’s my view that we should be trying to move our policy back to a more neutral stance,
Kashkari
Minneapolis
Believes the economy is not overheating yet, prompting him to continue his objection to rate increases.
Kaplan
Dallas
hinks the Fed should raise rates three or four more times over the next nine to 12 months to lift interest rates to the 2.5 percent to 2.75 percent range he views as neutral,
Rosengren
Boston
“So the path for the next three or four hikes, unless something happens in the economy that we’re not anticipating—there’s no reason we couldn’t gradually get up to that point.”
Mester
Cleveland
ontinued job growth and the fastest wage increases in nearly a decade leave the Federal Reserve’s current plans for interest rate increases intact
Beige Book (See Notes)
Brainard
FOMC
Signs of overheating showed up in financial-sector imbalances rather than in accelerating inflation (leverage, loose credit, low spreads)
Trade policy has introduced uncertainty.
Continued gradual increases in the federal funds rate are likely
to be appropriate

16. Economic activity continued to expand across the United States with 10 of 12 Districts reporting moderate or modest growth (Dallas: strong; St Louis: slight
All Districts reported that labor markets were tight
Consumer spending was up in all Districts
Prices increased in all Districts at a pace that was modest to moderate on average
Pricing pressures are expected to intensify further moving forward in some Districts… while in others the outlook is for stable price increases at a modest to moderate pace.
On balance, wage increases were modest to moderate
Contacts in several Districts reported slow growth in existing home sales
Commercial real estate was largely unchanged

17. Interest rates on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively
Key ECB interest rates to remain at their present levels at least through the summer of 2019
APP at the current monthly pace of €30 billion until the end of this month
September 2018, the Governing Council will reduce the monthly pace of the net asset purchases to €15 billion until the end of December 2018 – then end
Staff projections, broadly confirm our previous assessment of an ongoing broad-based expansion of the euro area economy and gradually rising inflation
Uncertainties relating to rising protectionism, vulnerabilities in emerging markets and financial market volatility have gained more prominence recently
Outlook for real GDP growth has been revised down slightly for 2018 and 2019, mainly due to a somewhat weaker contribution from foreign demand
Risks surrounding the euro area growth outlook can still be assessed as broadly balanced

18. NOW 4.0
Next:
Dec: 81.8% (69.7%)
New: 100%
Prior: 100%
Source: CME; Federal Reserve

19. Credit Anticipates-Equity Confirms
Rate
Prior
Current
Status*
Libor/OIS
0.40
Euribor/Eonia
-0.034
-0.039
Markit CDX NA - IG Spread
60.64
57.85
Markit CDX NA- HY Index
106.77
107.06
DTCC Repo - MBS
2.035
2.032
DTCC Repo – Treasury
2.028
2.003
High Yield
3.46
Fed Reserve Currency Swaps-Short
90 (ECB)
2 (BOJ)
0 (BOJ)
Fed Reserve Currency Swaps-Long
2-Year Swap Spread
0.193
0.173
TED Spread
0.175
0.169
Bond Equity Earnings Yield Ratio
.7278
.7410
Stocks
Undervalued
As of: 9/12/2018 COB
*Note: Status = No major impact
Status = Moving Worse
Status = Negative Impact

20. BREAKING DOWN 'Bond Equity Earnings Yield Ratio - BEER'
VALUING THE MARKET
“BEER” RATIO
Bond Equity Earnings Yield Ratio
𝐵𝑜𝑛𝑑 𝑌𝑖𝑒𝑙𝑑 10 𝑦𝑟
E/Y S&P 500
2.964/4.00=.741
BREAKING DOWN 'Bond Equity Earnings Yield Ratio - BEER'
A BEER of 1 would indicate equal levels of perceived risk in the bond market and the stock market. Analysts often feel that BEER ratios greater than 1 imply that equity markets are overvalued, while numbers less than 1 mean they are undervalued, or that prevailing bond yields are not adequately pricing risk.
Source: Investopedia

21. WEEKLY MACRO DATA
AROUND AND AROUND WE GO

22. SUM
SUBSTANCE

23. MARKET CYCLE MARKET EVENTS TRADE FEED BACK LOOP TECHNICALS
FUNDAMENTALS
FEED BACK LOOP
TECHNICALS
TRADE
DOLLAR
EMERGING MARKETS
POLITICS

24. OUR “FRIENDS” THE VOLATILE BEASTS
Source: Investing.com

25. INCREASING INTEREST RATESOK
TRENDING
NEGATIVE
PARSING RECESSION
JUMP IN GROWTH
YES – TAX CUT AND SLOW START
INCREASING BANK LOANS
INCREASING Y/Y
INCREASING INTEREST RATES
INCREASING
JUMP IN LENDING OF EXCESS RESERVES
RESERVES DOWN BUT STILL HIGH
GROWTH OF MONEY SUPPLY
FALLING
GROWTH IN VELOCITY OF MONEY SUPPLY
SLIGHTLY
QUICK CHANGES IN INFLATION
INDICATIONS BUT SLOWLY
SIGNIFICANT CHANGE/TREND IN LEADING INDICATORS
MAJOR CHANGES IN CONSUMER SENTIMENT
DECREASE IN 10-YEAR/2-YEAR TREASURY SPREAD
VERY LOW (0.23)

26. COMPARING INFLATION DATA*
THE INFLATION PICTURE – YOU BE THE JUDGE
COMPARING INFLATION DATA*
TYPE
RATE (Prior)
SOURCE
CPI
2.7 (2.9)
BLS
CORE CPI
2.2 (2.4)
STICKY CPI
2.5 (2.6)
Atlanta Fed
CORE STICKY CPI
2.5 (2.4)
FLEXIBLE CPI
4.1 (3.7)
CORE FLEXIBLE CPI
1.1 (0.3)
16% TRIMMED MEAN CPI
2.2 (2.2)
Cleveland Fed
PPI
2.8 (3.3)
CORE PPI
2.9 (2.8)
PCE
2.3 (2.2)
BEA
CORE PCE
2.0 (1.9)
TRIMMED MEAN PCE (Core)
Dallas Fed
10-YEAR TIPS
0.84 (0.78)
Treasury Dept
UNDERLYING INFLATION GAUGE
2.90 (2.80)
New York Fed
AS OF: 9/13/2018
Note: All data annualized
INCREASE
DECREASE
Source: New York Fed; Cleveland Fed; Atlanta Fed; BLS; BEA; Dallas Fed

27. NO WORRIES ABOUT INFLATION????
Source: WSJ

28. QUICK LOOK AT EARNINGS S&P NOTES (FactSet)
Bottom-up price target for S&P 500 is
That is 9.5% above current price of 2889
Energy and materials expected to see largest price increases
Utilities/Real Estate/Consumer Staples sectors lowest price increases
52.6% of S&P 500 rated Buy
41.7 rated Hold
Forward P/E currently 16.7 (slightly above 5-year average of 16.3)
Source: Yardeni; FactSet

29. INTERESTING!
Source: Bloomberg; Barclays; GSAM

30. TOP LINE OK – KEY NUMBERS: PARTICIPATION/WAGES
3.9%
Source: BLS

31. LABOR MARKET STRONG
This month’s year-over-year increase being the strongest since May 2012
Suggesting that demand for labor is likely to remain strong
August’s increase in the ETI was fueled by positive contributions from all eight components

32. PEAKS AND VALLEYS LATE STAGE MARKETS Volatility Widening spreads
Narrowing # of stocks leading rally

33. ALL-TIME HIGH!!!
The August Index has more “muscle” than any past reading. The “hard” components of the Index (job creation plans, job openings, capital spending plans, inventory plans, and earnings) soared to a historic record reading of This caps a change in the complexion of the Index which was dominated by the “soft” components
Source: NFIB; dShort

34. SO YOU NEED A JOB – A NEW RECORD?
Source: BL/JOLTs

35. PRODUCER PRICES MODERATE
SLOWEST PACE SINCE JAN
Source: BLS

36. WRONG DIRECTION
Source: BLS

37. WEEKLY

38. THE CAPE CAN BE DANGEROUS
Ranks in the third percentile of highest readings on this measure in nearly140 years
The decade ahead?

39. AND THE PROBLEM IS…
Source: YCharts

40. OVERALL: MAJOR MARKET IMPACTS STATUS COMMENTS Sentiment
Generally at all-time highs
Employment
Strong with wages. Weekly data lowest since 1968.
Income/Wages
Signs of wage increases
Oil
Volatile – driven by supply balances
Interest Rates
Still being moved by fringe market conditions
Fed
Hanging in there
Inflation
Generally in the 2% range but a few “cracks”
Dollar
Volatile

41. GLOBAL OUTLOOK
Eurozone
China

42. HOPEFULLY WE CALM DOWN A BIT
Source: WSJ

43. NOT SO GOOD
Source: Eurostat

44. NOT GREAT
Source: Eurostat

45. NOT A GOOD SIGN – HIGH JAN 2016 AT 2.70%
Source: Eurostat; Trading Economics

46. FALLING AGAIN
Source: Sentix

47. China's trade surplus narrowed sharply to USD 27
China's trade surplus narrowed sharply to USD billion in August 2018 from USD billion in the same month a year earlier and below market consensus of USD billion. Imports jumped 20 percent to a record high while exports rose at a softer 9.8 percent. Balance of Trade in China averaged USD HML from 1981 until 2018, reaching an all time high of USD HML in October of 2015
Source: Trading Economics; General Administration of Customs (China)

48. 0.20
U.S. Macro
0.10
Last
New

49. DAVID’S CORNER

50. ADVISOR INPUTS

51. QUESTIONS & COMMENTS
THANKS FOR JOINING US!

52. IMPORTANT DISCLOSURE INFORMATION
Content is intended for investment professional use/review only. Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by BigFoot Investments.com), or any non-investment related content, made reference to directly or indirectly in this presentation will be profitable, equal any corresponding indicated historical performance level(s), be suitable for any investment professional’s clients portfolio or individual situation, or prove successful. The investment professional retains all decision making authority as to whether or not to follow and/or implement any of the presentation content. BigFoot has absolutely no responsibly for any suitability determination pertaining to any of the investment professional’s clients, such obligation being exclusively the initial and ongoing responsibility of the investment professional. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this presentation serves as the receipt of, or as a substitute for, personalized investment advice from BigFoot Investments.com. BigFoot Investments.com. is neither a law firm nor a certified public accounting firm and no portion of the content should be construed as legal or accounting advice. Investment Professional acknowledges that to the extent required to do so, it is his/her/its exclusively responsibility to advise his/her/its employer/broker-dealer of its BigFoot subscription. BigFoot Investments.com is a service of Lee Johnson Capital Management, an SEC registered investment adviser located in Fort Worth, Texas. A copy of the Lee Johnson Capital Management LLC’ current written disclosure statement discussing our advisory services and fees is available for review upon request.
No Sharing of Content: You acknowledge that the presentation content is for investment professional use only. You warrant and represent not to share any portion of the presentation content with any non-subscriber, including but not limited to your clients or prospects

53. Clarida (Vice Chair-Nom) NOTE: One BOG seat open with no nominees
DOVES AND HAWKS
DOVE
DOVISH
CENTERIST
HAWKISH
HAWK
BRAINARD
POWELL (Chair)
WILLIAMS
EVANS
KAPLAN
Rosengren
George
KASHKARI
HARKER
Mester
BULLARD
QUARLES
BARKIN
Brainard
BOSTIC
Goodfriend (Nom)
Clarida (Vice Chair-Nom)
Bowman (Nom)
NOTE: One BOG seat open with no nominees
BOG MEMBER
DISTRICT VOTE
Nominations approved in committee now to full Senate

54. Source:

55. Politics/Geopolitical
ImPACT
Financial Stress
Output/Production
Inflation
Politics/Geopolitical
Dollar
Oil
Interest Rates
Sentiment
Employment
Central Bank
Trade