The July NY manufacturing index rose to 17.2 from -.2 and that was better than the estimate of 10. New orders got back above zero at 13.9 while backlogs remained a hair below at -.6 but that is up from -12.5 in June. Inventories though went further negative to -9.7 from -.6 and maybe that's why we saw the new order rebound as these inventories have to be rebuilt. …
Great news but what is up with bonds?
The great Moderna news is a reminder that this Covid nightmare will end at some point and stocks are certainly celebrating that. Stating the obvious will be the performance today in Live Nation, the airlines, the casinos, the cruise lines, the restaurants, and MSG to name a few stocks and industries in terms of seeing the markets belief on when these businesses can …
Consumer prices
The June CPI rose .6% headline and .2% core m/o/m, about as expected. The y/o/y increase is .6% headline and 1.2% ex food and energy. A 5.1% m/o/m gain in energy and .6% rise in food drove the headline increase relative to May. As for the core, medical care costs continue to rise at a heady pace with a .4% m/o/m rise and 5.1% y/o/y. Health insurance prices in …
Growth vs Value/NFIB/Other
As a long suffering value investor I didn't know whether to laugh or cry when I saw this chart from my good buddy David Rosenberg yesterday in his daily Breakfast With Dave research. It's the relationship between growth and value where the ratio now exceeds the 2000 peak. SOURCE: Haver Analytics, Rosenberg Research Yes, the California news yesterday …
Not much today
Maybe the fact that Disney World opened the same weekend that the virus count continues to spike in Florida is a continued reflection that the stock market believes we will power thru this virus from here with the help of mask wearing, hoped for drugs, and vaccines by year end. Of course the US Treasury market is more suspect about how well we can do this and to what …
Succinct Summation of the Week’s Events – 7/10
Positives 1)The Fed's balance sheet shrunk for the 4th week and is back below $7 Trillion. The main reason has been a reduction in swap lines (as they get paid back) and their repo facility usage has basically gone to zero. But, they keep on buying US Treasuries even with yields so low. 2)Initial jobless claims came in at a still high 1.31mm but that was below …
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PPI, where’s inflation headed?
PPI went negative m/o/m in June with a .2% headline drop and .3% core decline. Taking out trade too though saw prices rise .3% as trade prices fell 1.8% m/o/m. Food prices also fell sharply, by 5.2% m/o/m but after a 6% jump in May. They are up .8% y/o/y while energy prices are down 17% y/o/y. The BLS said 80% of the drop in final demand services was due to a 7.3% …
Banks/China
The Fed's balance sheet shrunk for the 4th week and is back below $7 Trillion. The main reason has been a reduction in swap lines (as they get paid back) and their repo facility usage has basically gone to zero. But, they keep on buying US Treasuries even with yields so low. As if the US banking system didn't have enough challenges with rising loan losses, the Fed …
Comments on mfr’g/Initial Claims
The importance of earnings season outside of the actual numbers is what companies say on the conference calls which I try to listen to as many as I can. Yesterday MSC Industrial, a major US distributor of industrial supplies (and stock I own for clients full disclosure), said this about what they are seeing: “We're hearing a few things from our customers and our …
Sentiment/Commodities
In stark contrast to the 'professional' investor and its current very bullish stance, the individual investor, as measured by the AAII, is still bearish but less so on the week. Bulls rose 5 pts to 27.3, a 4 week high but still well below the 36.6 peak of the past few months. Bears fell for the 2nd week, by 3.2 pts to 42.7, the least in 4 weeks but still higher than …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.