Seen late Friday, foreigners were net sellers again in September of US Treasury notes and bonds. This in a month where the 10 yr yield jumped to 3.06% from 2.86%. The selling totaled $11.5b which brings the net year to date buying to $90.5b, which if it holds would be the most since 2014 but as a percent of supply is much smaller. China really picked up the pace of …
Succinct Summation of the Week’s Events 11/16
Positives 1) Jay Powell still seems intent on raising rates next month but maybe gave himself some wiggle room on that when talking about the economic softening going on overseas. While a pause would have made perfect sense if the fed funds rate was already at 3% or higher, dragging their feet and only getting it to 2-2.25% at this point really complicates their …
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Retail sales/Manufacturing/Import prices
With retail sales for October, looking right at the 'control group' which takes out auto's, gasoline and building materials, they rose .3% m/o/m, one tenth less than expected and off a lower than expected base as September was revised down by 2 tenths. Sales ex auto's and gasoline also missed expectations. Car/truck/parts sales rebounded by 1.1% m/o/m but after …
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Maddening to watch
As just a spectator, this negotiating drama in the UK is hugely maddening. The British pound is getting smoked and all one has to do is watch its movement to know which way the wind is blowing in the negotiations and now with minister resignations. We now await a Cabinet vote, to be followed by Parliament if it passes. Gilts are rallying sharply with yields dropping. …
Consumer price inflation
The October CPI rose .3% headline and .2% core m/o/m as expected. The y/o/y increase was 2.5% from 2.3% last month and the core rate was higher by 2.1% y/o/y vs 2.2% in September (one tenth less than expected due to rounding). Energy prices helped to drive the headline gain while services ex inflation contributed to the core rise. On the former, prices grew by 2.4% …
Energy/Sentiment/Contraction/FX
For those that watched the puke yesterday in oil, the close put us at the most oversold on record (dating back to data in 1983) according to its relative strength index. While I have no short term view of substance with the cross currents of Iran, the Saudi's, the Russians and the question of demand, I'd say it's just a bit technically over done on the downside right …
The FAANG trade is dead
The FAANG trade is dead. Dead in the sense of it as a homogeneous group. This not long after the New York Stock Exchange created a FAANG index called the NYSE FANG+ Index where you can trade options and futures, https://www.theice.com/fangplus. Now the group has completely splintered with the Apple earnings news the last straw. Each stock will now stand on its own. In …
Some important things to know
The key economic news in the US this week will be on the consumer. We see consumer price inflation on Wednesday, retail sales on Thursday and earnings from HD, GPS, M, WMT, JWN and WSM. With softness in trade, a squishy cap ex figure in Q3 (why would US business commit to large scale cap ex projects in the face of what could be a massive increase in the tariff tax in …
Succinct Summation of the Week’s Events – 11/9
Positives 1) The FOMC statement was as uneventful as can be but that itself is a message from the Fed that nothing that occurred in October is going to alter their interest in raising rates again in December. 2) Initial jobless claims at 214k was as expected and little changed from 215k last week. The 4 week average also held at 214k. Continuing claims, delayed …
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Happy weekend
To add to my comment on the Fed statement yesterday, while the FOMC basically said little new, it was that silence that also sent a message. It was that nothing that happened in the month of October, both market wise and in the data, has altered their stance and thus was an implicit confirmation of what the market has priced in for December, another rate hike. The …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.