Highlights from the June issue of ASA Advisor, prepared exclusively for ASA members by Armada Corporate Intelligence, include a Price-Waterhouse Cooper Trendsetter survey that shows U.S. CEOs were slightly less optimistic about the next 12 months as far as the U.S. economy is concerned, and are still worried about the pace of global growth, the survey reveals. The rate of capex has fallen dramatically, but CEOs are still insisting they will be on track before the year ends.
The Advisor reports U.S. rig counts were at 788 in June, which is consistent with levels over the last two years (747 in June 2017 and has been in that narrow range since). Canadian rigs have seen far more volatility with 158 in January and 59 as recently as June.
U.S. competitiveness in global petroleum markets continues to improve, the Advisor reports, but the dollar has not weakened, and that has limited the level of exports to a degree. Geopolitical impacts on global supply create demand for U.S. oil, and these “demand creation” moments can come unexpectedly, the Advisor reports.
Also, U.S. manufacturing activity remained positive as measured by the Purchasing Managers’ Index, but the Advisor notes readings have fallen to 52.1 to from 52.9. Housing starts have been down along with permits and sales of existing homes. Momentum has stalled despite lower mortgage rates, and a reduction in home prices in key markets, the advisor adds.
The new home market has been driven by upper-end homes, and the most important factor has been the performance of the stock market, as opposed to mortgage rates, the Advisor adds. This has contributed to higher levels of consumer confidence, but both the Conference Board and University of Michigan surveys are less robust than they have been, as consumers start to worry about the impact the trade wars on inflation and the future of their jobs, the Advisor notes.