The May ISM manufacturing index rose to 43.1 from 41.5 and that was .7 pts below the estimate and vs 49.1 in March. New orders rose 4.7 pts to 31.8 after falling by 15.1 pts in April. Backlogs rose a slight .4 pts to 38.2. Employment was higher by 4.6 pts to 32.1 while export orders rose by a similar amount to 39.5. Supplier deliveries, which has kept the …
A few things
It certainly was an unsettling and disturbing weekend watching all the goings on but the market is looking past it and focused more on the broad reopenings happening throughout the country. Obviously if the protests continue for weeks on end and thus disrupts and delays the reopenings in the major cities or even causes a rise in virus spread, the market would have to …
Succinct Summation of the Week’s Events – 5/29
Positives 1)Purchase applications to buy a home continued higher according to the MBA. They rose 8.6% w/o/w and are now up 8.7% y/o/y with mortgage rates still sitting around record lows. Refi's were unchanged w/o/w but still up 176% y/o/y. 2)New home sales in April totaled 623k, well better than the estimate of 480k and actually up from 619k in March but …
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Chicago MNI/Consumer Confidence
There was no rebound in the Chicago regions manufacturing index for May. It fell to 32.3 from 35.4 while the estimate was 40. That’s the weakest since March 1982. New orders fell to the least since July 1980 and backlogs are the lowest since March 2009. Employment did rise after April’s fall. “However, anecdotal evidence was mixed with some firms stating they had to …
Quick comments on the data
This is data in the eye of the shutdown storm in April so take it with a grain of salt. Personal income spiked by 10.5% m/o/m mostly because of government cash handouts and personal spending fell a sharp 13.6% because everyone only spent on necessities. The combination brought the savings rate to 33%. On the inflation side, headline PCE fell .5% m/o/m and the core …
Some data overseas/Inflation
Ahead of US inflation data today at 8:30am we saw inflation news also from Japan and Europe. The Japanese read was specifically in Tokyo for May and it rose .5% y/o/y ex fresh food and energy, well more than the estimate of up .1%. It's rare that we see a higher than expected print in Japanese inflation and while the BoJ might be happy, I don't believe the Japanese …
Contract signings of existing homes
Pending home sales in April fell 21.8% m/o/m, worse than the estimate of down 17.3%. Versus last year, contract signings were down by 35%. The 48% decline m/o/m in the Northeast led the way with sales down 15-20% in the other 3 regions. This is in contrast to the surprise in new home sales in April relative to expectations (but still down a lot from the peak) and I’m …
Claims/Durable Goods Orders/Q1 GDP
Initial jobless claims totaled 2.123mm, a touch above the estimate of 2.10mm but down from 2.44mm last week. It’s the 8th week in a row of moderation but all self inflicted. Continuing claims, delayed by a week relative to initial claims, moderated to a still alarming 21mm from 24.9mm in the week prior. This is likely due to businesses beginning the reopening process. …
Sentiment/Valuations/China/Europe
After seeing an extreme 'Euphoric' read in the Citi 'Panic/Euphoria' index as stated on Tuesday and and extended level of bullishness in yesterday's II figure, today's AAII sentiment gauge of individual investors saw a 4 pt rise in Bulls to 33.1 after last week's 5.7 pt increase. That's a 6 week high. Bears still outpace them though but less so as they fell 2.9 pts to …
Europe driving the bus today
Today it's the Europeans that are driving the equity rally. We haven't said that in a while. In the works for weeks, a 750b euro borrowing binge by the European Commission will then get parceled out in grants (500b euros) and loans (250b euros) to individual states. Italy will get about 82b, Spain around 77b, France 39b to name a few. I'm not sure if any strings are …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.