petroleum equipment institute...s&p500 stock prices index source: wall street journal data...
TRANSCRIPT
ABendintheRoad
Petroleum Equipment Institute
Brian BeaulieuCEO
First in Forecasts Since 1948
ITR Economics provides the best economic intelligence to reducerisk and drive practical and profitable business decisions.
Duration Accuracy
US GDP 15 99.1%
US Ind. Prod. 10 99.9%
Eur Ind. Prod. 15 99.2%
Canada Ind Prod 15 99.6%
China Ind Prod 18 99.3%
Retail Sales 18 99.8%
Housing 15 95.6%
Employment 14 99.7%
2016 Forecast Results2
2
First in Forecasts Since 1948
US Real Gross Domestic Product
Source: BEA3MMA
3
10
12
14
16
18
20
10
12
14
16
18
20
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
Sep '15 Forecast
Aug '17 Forecast
GDP - 3MMA
First in Forecasts Since 1948
US Industrial Production to US Gross Domestic Product
Sources: FRB, BEAYear-over-Year, Quarter-to-Quarter (3/12)
-6.8%
-2.9%
-5.3%
-15.5%
1.4%
-16
-12
-8
-4
0
4
8
12
-16
-12
-8
-4
0
4
8
12
'82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
GDPUS IP
GDPUS IP
4
First in Forecasts Since 1948
US Consumption of Crude Oil and Petroleum Products to US Gross Domestic Product
Sources: Energy Information Administration, Bureau of Economic Analysis12/12 Rates-of-Change
5
-10
-5
0
5
10
-10
-5
0
5
10
'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20
Consumption
GDP
GDPConsumption • There is a direct link between economic growth and growth in consumption
• The ascending rates-of-change are a positive signal for secular growth potential
First in Forecasts Since 1948
Worldwide Rotary Rig Count to North America Rotary Rig Count
Source: Baker Hughes12/12 Rates-of-Change
15.1%
43.8%
-60
-40
-20
0
20
40
60
-60
-40
-20
0
20
40
60
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
North AmericaWorldwide
Worldwide
North America
6
First in Forecasts Since 1948
US Real Gross Domestic Product
Source: BEA3/12 Rate-of-Change
-8
-4
0
4
8
12
16
1950 1960 1970 1980 1990 2000 2010 2020Republican Democrat GDP 3/12
7
First in Forecasts Since 1948
S&P500 Stock Prices Index
Source: Wall Street JournalData Trends
8
0
400
800
1200
1600
2000
2400
2800
0
400
800
1200
1600
2000
2400
2800
1980 1985 1990 1995 2000 2005 2010 2015 2020
Raw
First in Forecasts Since 19489Analysis prepared by : Baird Family Wealth Group 9/5/17
Source: Robert Shiller – Yale University
Cyclically Adjusted Price Earnings (CAPE) RatioJanuary 1900 – August 2017
First in Forecasts Since 1948
US Treasury 10-Year Bond
Source: US Dept of the TreasuryDaily Treasury Yield Curve Rates
10
1.3
1.4
1.5
1.6
1.7
1.8
1.9
2
2.1
2.2
2.3
2.4
2.5
2.6
2.7
Oct-'16 Nov-'16 Dec-'16 Jan-'17 Feb-'17 Mar-'17 Apr-'17 May-'17 Jun-'17 Jul-'17 Aug-'17 Sep-'17 Oct-'17
10-Year Bond
First in Forecasts Since 1948
US Mortgage Rates to US Federal Funds
Sources: Federal Reserve Board, WSJRaw Data
-2
2
6
10
14
18
22
-2
2
6
10
14
18
22
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
Mortgage Rates
Federal Funds
11
First in Forecasts Since 1948
RawNov-15 1.5Dec-15 1.5Jan-16 1.4Feb-16 1.5Mar-16 1.3Apr-16 1.3
May-16 1.6Jun-16 1.6Jul-16 1.5
Aug-16 1.7Sep-16 1.6Oct-16 1.5Nov-16 1.7Dec-16 1.7Jan-17 1.6Feb-17 1.7Mar-17 1.5Apr-17 1.5
May-17 1.9Jun-17 1.7Jul-17 1.7
Aug-17 1.9Sep-17 1.7Oct-17 1.7
3/12 Rate-of-Change
=
100 100
=.
.100 100 10.4%
3MMT
4.44.44.44.24.14.24.54.74.84.85.05.05.15.05.04.84.74.95.15.35.35.3
12MMT
18.018.218.418.618.819.019.219.419.719.820.020.220.3
12/12
26.7%25.5%25.2%22.4%20.0%18.3%15.4%12.7%
12/12 Rate-of-Change
=
100 100
=.
.100 100 12.7%
3/12
15.9%13.6%13.6%14.3%14.6%16.7%13.3%12.8%10.4%10.4%
Data Preparation
DATACAST !
First in Forecasts Since 1948
Phase A - Recovery
Annual Sales are BELOWYear-Ago Levels, but the Rate-of-Decline is SLOWING.
Phase B –Accelerating Growth (Best)
Annual Sales are ABOVEYear-Ago Levels, and are GROWING at a RAPIDPace.
Phase C – Slowing Growth (Caution)
Annual Sales are ABOVEYear-Ago Levels, BUT the Rate-of-Growth is SLOWING
Phase D -Recession
Annual Sales are BELOWYear-Ago Levels, and are DECLINING at a RAPIDPace.
Business Cycles
13
First in Forecasts Since 1948
US Crude Oil Futures Prices to US Industrial Production Index
Source: WSJ, FRB12/12 Rates-of-Change
14
-15
-10
-5
0
5
10
15
-90
-60
-30
0
30
60
90
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20
Oil Prices
US IP
US IP Forecast
All economic indicators used in this analysis are shifted along the horizontal axis to reflect their timing relationship to Crude Oil Futures Prices sales and provide a rough projection of the possible course of company sales going forward.
US IPOil Prices
First in Forecasts Since 1948
US Crude Oil Futures Prices
Source: WSJRates-of-Change
15
-60
-40
-20
0
20
40
60
80
100
-60
-40
-20
0
20
40
60
80
100
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20
3/12 12/12
10.8%
17.9%
12/12
3/12
First in Forecasts Since 1948
US Crude Oil Futures Prices
Source: WSJData Trends, US $
16
0
30
60
90
120
150
0
30
60
90
120
150
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20
12MMA3MMA
12MMA
12MMT Forecast
3MMA
First in Forecasts Since 1948
US Natural Gas Futures Commodity Prices
Source: WSJRates-of-Change
17
-150
-100
-50
0
50
100
150
-150
-100
-50
0
50
100
150
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
3/12
12/12
2.0%
29.3%
12/12
3/12
First in Forecasts Since 1948
US Natural Gas Futures Commodity Prices
Source: WSJData Trends in US $
18
0
2
4
6
8
10
12
0
2
4
6
8
10
12
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
12MMA3MMA
12MMA12MMT Forecast3MMA
First in Forecasts Since 1948
Percent of 2016 World GDP by Country
19
*Total 2016 World GDP: $75.278 Trillion, US$
Data Source: IMF, *67% of R-O-W figures are IMF estimates
First in Forecasts Since 1948
-6
-4
-2
0
2
4
6
-15
-10
-5
0
5
10
15
'92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18
World IP
Indicator
IndicatorWorld IP
World Industrial Production Index to G7 Leading Indicator
Sources: CPB Netherlands Bureau For Economic Policy Analysis, OECDRates-of-Change
20
1/12
12/12
First in Forecasts Since 1948
State Population Growth Rates
Source: Census BureauPercent Change from Population Estimates 2010 to 2016
First in Forecasts Since 1948
US Industrial Production to ITR Leading Indicator™
Sources: FRB, ITR EconomicsUSIP – 12/12 Indicator - Monthly
-15
-10
-5
0
5
10
15
-15
-10
-5
0
5
10
15
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
IndicatorUS IP
Indicator - MonthlyUS IP - 12/12
22
Reported in ITR Trends Report – ITR Advisor
First in Forecasts Since 1948
US Crude Oil Futures Prices to ITR Leading IndicatorTM
Sources: WSJ, ITR EconomicsRates-of-Change
23
-15
-10
-5
0
5
10
15
-90
-60
-30
0
30
60
90
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20
Oil Prices Indicator
IndicatorOil Prices
12/12 Monthly
First in Forecasts Since 1948
US Nondefense Capital Goods New Orders w/o Aircraft
Source: Census BureauBillions of Dollars
4.8%1.1%
$754.2
500
750
1000
1250
1500
-60
-40
-20
0
20
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
MMTR-O-C
3/12
12/12
3MMT12MMT
24
First in Forecasts Since 1948
US Median Weekly Earnings (deflated)
Source: BLSConstant (1982-84) Dollars
25
$351.0
300
310
320
330
340
350
360
300
310
320
330
340
350
360
1979 1984 1989 1994 1999 2004 2009 2014 2019
Median Earnings - Raw Data
First in Forecasts Since 1948
US Consumer Credit Outstanding Per Capita
Source: FRBAnnual Data Trend in Thousands of Dollars
26
$14.3
0
2
4
6
8
10
12
14
16
0
2
4
6
8
10
12
14
16
'48 '52 '56 '60 '64 '68 '72 '76 '80 '84 '88 '92 '96 '00 '04 '08 '12 '16 '20
Credit Outstanding
First in Forecasts Since 1948
US Auto Loan Delinquency Rate toPercent of US Student Loans Over 90 Days Delinquent to
Real Estate Residential Loan Delinquency Rate
Sources: FRBNY, FRB2012 = 100
3.9
11.2
3.6
0
3
6
9
12
15
0
3
6
9
12
15
'04 '06 '08 '10 '12 '14 '16 '18 '20
PercentagePercentage
Auto
Student
Residential
10 Year Average
10 Year Average
10 Year Average
First in Forecasts Since 1948
US Delinquency Rates for Commercial & Industrial Loans
Source: FRBPercent
28
-15.6%20.0%
1.5%0
2
4
6
8
10
12
14
-200
-150
-100
-50
0
50
100
150
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
MMAR-O-C
3/1212/12
3MMA12MMA
First in Forecasts Since 1948
US Total Retail Sales to ITR US Retail Sales Leading Indicator
Sources: Census Bureau and ITR EconomicsRetail Sales = 12/12, ITR Retail Sales = Monthly
29
-15
-10
-5
0
5
10
15
-15
-10
-5
0
5
10
15
'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19
Retail Sales
Retail Sales Forecast
Indicator - Monthly
IndicatorRetail Sales
First in Forecasts Since 1948
US Retail Sales
Source: US Census Bureau12/12 Rates-of-Change
12.2
6.5
5.5
3.5
2.2
1.5
1.0
1.0
0.8
0.1
-0.4
-1.2
-10 -5 0 5 10 15
Online Retailers
Bldg Materials, Garden, Supplies
Jewelry Stores
Beer, Wine & Alcoholic Beverage
Grocery Stores
Gasoline Stations
General Merchandise Stores
Clothing Stores
Furniture Stores
Health and Personal Care Stores
Automotive Parts Stores
Light Vehicle Sales
30
First in Forecasts Since 1948
US Total Vehicle Miles Driven
Source: The Center for Transportation Analysis (CTA) at the Oak Ridge National LaboratoryTrillions of Miles
31
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
1950 1965 1980 1991 1994 1997 2000 2003 2006 2009 2012 2015 2018
Miles
First in Forecasts Since 1948
Mexico Annual Road Traffic
Source: OECDRaw Data
32
0
50
100
150
200
250
300
0
100
200
300
400
500
600
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016
Passengers
Freight
Passengers bils Passenger-km Freight bils ton-km
First in Forecasts Since 1948
ATA Truck Tonnage Index
Source: American Trucking AssociationsData Trend
33
40
60
80
100
120
140
40
60
80
100
120
140
1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
12MMA
First in Forecasts Since 1948
US Housing Price Index
Source: Federal Housing Finance Agency1991 = 100
100
125
150
175
200
225
250
275
100
125
150
175
200
225
250
275
'98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
Raw Data
34
$254.9
$228.3
First in Forecasts Since 1948
US Private Sector Employment
Source: BLSAnnual Data Trend
35
85
95
105
115
125
85
95
105
115
125
'92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
Employment Mils of Jobs
First in Forecasts Since 1948
US Consumption of Crude Oil & Petroleum Productsto Real Gross Domestic Product
Sources: EIA, BEAData Trends
6
10
14
18
0.4
0.5
0.6
0.7
1985 1990 1995 2000 2005 2010 2015 2020
GDPTrils C2009$
OilBils Barrels
Oil Consumption - Raw DataGDP - 3MMA
36
First in Forecasts Since 1948
US Crude Oil Production
Source: EIAMillions of Barrels per Day
9.2
3
4
5
6
7
8
9
10
11
3
4
5
6
7
8
9
10
11
37
First in Forecasts Since 1948
US Crude Oil Inventories Since January 2014
Source: EIA 38
200
300
400
500
Jan 2014 Jun 2014 Nov 2014 Apr 2015 Sep 2015 Feb 2016 Jul 2016 Dec 2016 May 2017 Oct 2017 Mar 2018
US Commercial Crude Oil Inventories
Million Barrels
First in Forecasts Since 1948
Mexico Oil & Gas Mining Production
Source: Mexico National Institute of Statistics and Geography2008 = 100
-8.6%-9.7%
74.5
55
75
95
115
135
155
175
-40
-30
-20
-10
0
10
20
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
MMAR-O-C
3/12
12/12
3MMA12MMA
39
First in Forecasts Since 1948
Canada Oil and Gas Extraction
Source: Statistics CanadaBillions of 2007 Chained Canadian dollars
17.7%
8.9%
108.6
75
85
95
105
115
125
135
145
155
-20
-15
-10
-5
0
5
10
15
20
'00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
MMAROC
12/12
3/12
12MMA3MMA
40
First in Forecasts Since 1948
-30
-20
-10
0
10
20
30
-90
-60
-30
0
30
60
90
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20
Oil Prices
S.A. Oil Production
S.A. Oil ProductionOil Prices
US Crude Oil Futures Prices to Saudi Arabia Oil Production Index
Sources: WSJ, IMF12/12 Rates-of-Change
41
First in Forecasts Since 1948
United States Overview Weekly Oil Price & Rig Count
Sources: EIA, Baker HughesRigs: Weekly Count WTI: Average Weekly Price
743$50.21
$0
$20
$40
$60
$80
$100
$120
0
250
500
750
1000
1250
1500
1750
Jan 2014 Jun 2014 Nov 2014 Apr 2015 Sep 2015 Feb 2016 Jul 2016 Dec 2016 May 2017 Oct 2017 Mar 2018 Aug 2018
USD/bblRig Count
Oil Rigs
WTI Price - Shifted 13 Weeks
42
First in Forecasts Since 1948
US Crude Oil Futures Prices to North American Rotary Rig Count
Sources: WSJ, Baker Hughes12/12 Rates-of-Change
43
-90
-60
-30
0
30
60
90
-90
-60
-30
0
30
60
90
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20
Oil Prices Rig Count
Rig CountOil Prices
First in Forecasts Since 1948
US Consumption of Crude Oil and Petroleum Products to North America Robotics New Orders
Sources: Energy Information Administration, Robotic Industries Association12/12 Rates-of-Change
44
-50
-25
0
25
50
-10
-5
0
5
10
'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20
Consumption
New Orders
New OrdersConsumption
First in Forecasts Since 1948
US Crude Oil Futures Prices to US Natural Gas Future Prices
Source: WSJRaw Data
0
3
6
9
12
15
0
25
50
75
100
125
150
'86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
GasOil
Oil
Natural Gas
45
First in Forecasts Since 1948
US Industrial Sector Total Energy Consumption
Source: EIAQuadrillion btu
46
1.9%0.3%
31.0
27
31
35
39
43
-30
-20
-10
0
10
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
MMTR-O-C
3/12 12/12
3MMT
12MMT
First in Forecasts Since 1948
US Transportation Sector Total Energy Consumption
Source: EIAQuadrillion btu
47
1.5%1.0%
27.9
21
28
35
42
-20
-10
0
10
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
MMTR-O-C
3/12
12/12
3MMT
12MMT
First in Forecasts Since 1948
US Residential Sector Total Energy Consumption
Source: EIAQuadrillion btu
48
-0.5%
2.2%
20.3
15
20
25
30
35
40
45
-40
-30
-20
-10
0
10
20
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
MMTR-O-C
3/12 12/12
3MMT12MMT
First in Forecasts Since 1948
US Commercial Sector Total Energy Consumption
Source: EIAQuadrillion btu
49
-0.7%
1.6%
18.2
13
17
21
25
29
-30
-20
-10
0
10
'96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
MMTR-O-C
3/1212/12
3MMT12MMT
First in Forecasts Since 1948
US Federal Government Current Tax Receipts to Consumption Expenditures to Current Transfer Payments to
Federal Government Interest Payments
Source: BEABillions of Dollars
50
$0
$375
$750
$1,125
$1,500
$1,875
$2,250
$2,625
$3,000
Tax/Exp/Paym
Current Tax Receipts
Consumption Expenditures
Current Transfer Payments
Interest Payments
Interest
51
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