I've updated my investment ideas page. (members click here). As always, this week's write-up includes specific equity, ETN, and ETF analysis. Updates of note this week include a new idea in the natural gas pipeline space, and a new position north of the border. Here's a sample from this week's update, specifically on high yiedl corporates: US corporates are very …
5 yr auction not so good / Yellen speaking, zzzzzzz
After a solid 2 yr note auction yesterday, the 5 yr auction today was soft. The yield of 1.828% was above the when issued of near 1.82%. The bid to cover of 2.33 was below the 12 month average of 2.43. The one positive was that dealers got left with 26% of the auction vs the one year average of 32%, leaving the balance with direct and indirect bidders. Bottom line, …
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Consumer Confidence
United States Sorry for the late rundown on this as I was dropping my kid off at the camp bus. The June Conference Board Consumer Confidence index rose 1.3 pts to 118.9 and that was better than the expected drop to 116. It is up from 117.6 in May but a touch below the 119.4 print in April. The average year to date is a good 118.1 which is well above the pre election …
Ugly close in European bonds
In case you didn’t see how the European bond market closed, it was ugly. The German 10 yr bund yield spiked 13 bps to .37%. This is the worst day since December 3rd, 2015. The 2 yr yield was higher by 6 bps to -.56%, the least negative in a year. The French 10 yr yield was higher by 14 bps. The Italian 10 yr yield jumped by 16 bps and Spain was up by 12 …
Draghi begins the taper talk
Europe With ECB QE set to expire in December, Mario Draghi has no choice but to tell us what his plans are for tapering and extending it into 2018. Today was a first step in setting us up for that when he said “All the signs now point to a strengthening and broadening recovery in the euro area. Deflationary forces have been replaced by reflationary ones.” With …
2 yr note auction solid, what’s that say?
United States The 2 yr note auction, very sensitive to expectations for Fed policy, was solid. The yield was about ½ bp below the when issued and the bid to cover of 3.03 was well above the 12 month average of 2.70 and the best since November 2015. Also of note, direct and indirect bidders took down 75% of the auction, well more than the one year average of …
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Capital spending remains punk
United States Capital spending remained weak in May. Core spending (defined as orders for non defense capital goods ex aircraft) fell .2% m/o/m instead of rising by .4% as expected. April was revised up by one tenth. Also, shipments which is part of the GDP calculation also fell by .2% m/o/m vs the estimate of up .4% and that should lead to a downward revision to Q2 …
Are stocks still good at discounting future news?
Are stocks still good at discounting future news? In the Bank of International Settlements (the central banks' central bank) annual report, they argue that central banks should be removing accommodation not because of an expected rise in inflation that could be triggered by a shrinking of slack in labor markets but instead for market stability reasons. They said …
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Succinct Summation of the Week’s Events – 6/23
Positives New home sales in May totaled 610k, 20k more than expected and April was revised up by 24k to 593k. Smoothing out this volatile data point puts the 5 month year to date average to also 610k which is an improvement from the pace of 561k on average last year. The median sales price spiked to 16.8% y/o/y growth to a record high of $345,800 and again, a lot …
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Manufacturing / Business confidence / Housing
United States The Markit US services and manufacturing composite index moderated in June to 53 from 53.6 in May with both components down m/o/m. The 53 print matches the lowest level since September and thus pre election territory. The services component fell to 53 from 53.6 while manufacturing was lower by .6 pts to 52.1. There was some mixed internals. New orders …
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Peter is the Chief Market Analyst with The Lindsey Group. He is Co-CIO at Bookmark Advisors, a member of the Advisory Services Network and a regular CNBC Contributor.