Even though we’ve heard from about all the current members of the FOMC in speeches since the last meeting, we’ll still read the minutes. Sorry for the snarky remarks on my part. The comments on the labor market were deservingly optimistic, “Participants agreed that labor market conditions remained strong.” We know that it’s the inflation status that they are now …
Cap on SALT an impact or not?/Sentiment/UK
After listening to the Home Depot conference, their main concerns that impacted comps were weather, lower lumber prices and for the future, the possibility of higher tariffs. They didn't seem concerned at all with the cap on SALT deductions in those states most affected. This is what they said in the call, "There's been a lot of conversation about what's happening in …
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Powell/HD/Overseas
There was nothing market moving in the comments last night from Jay Powell but he did spend time talking about excessive levels of corporate debt. "The acronyms have changed a bit, 'CLOs' instead of 'CDOs', for example, but once again, we see a category of debt that is growing faster than the income of the borrowers even as lenders loosen underwriting standards. Not …
Huawei aftermath/Japan/Europe/India
The repercussions of our approach to Huawei will likely be more than just the direct impact on suppliers to them. I have to believe that every single US company, regardless of what they do, are now vulnerable to any new rule or regulation that the Chinese government can think of in the name of national security. Our tough stance on China technology and whatever they …
Succinct Summation of the Week’s Events – 5/17
Positives 1) Knowing that the only way the USMCA will pass Congress, the US will get rid of the steel and aluminum tariffs with Canada and Mexico. Also, the administration postponed for six months auto tariffs on the EU and Japan. 2) Initial jobless claims totaled 212k, 8k less than expected and down from 228k last week. The 4 week average is now 225k from 220k …
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Consumer confidence jumps
The UoM May consumer confidence index jumped to 102.4 from 97.2 in April and that was well better than the expected print of no change. This is the highest since January 2004. All of the confidence gain was in the Expectations component which jumped 8.6 pts. Current conditions were basically unchanged at 112.4 from 112.3. Of particular note, just when everyone thinks …
China/Europe, Spanish yields fall to record low
Chinese stocks did not react well to the Huawei news as the Shanghai comp fell 2.5%, the Shenzhen by 3.3% and the H shares index in Hong Kong by 1.1%. Throw in other tech related bourses and Taiwan was weaker by .9% and the Kospi by .6%. ZTE in particular was down by 8% after falling by 6% on Thursday. Add the Huawei ban to the WSJ headline out late yesterday "China …
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Claims & Mfr’g & Housing, oh my
Initial jobless claims totaled 212k, 8k less than expected and down from 228k last week. The 4 week average is now 225k from 220k but that’s because a 193k print dropped out. That average is the most in 3 months but bottom line remains historically low reflecting a very benign pace of firing’s. Continuing claims, delayed by a week, fell by 28k after an increase of a …
More on card rates/Inflation in art & goods with tariffs/Other
I yesterday highlighted the possibility that a nearly 17% credit card interest rate, the most on record dating back to 1994 was a likely factor weighing on retail sales. Today I wanted to give four reasons why we've seen a sharp increase. 1)In 2009 after the financial meltdown, Congress passed the Credit Card Accountability, Responsibility, and Disclosure Act. One …
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April retail sales disappoint, May manufacturing rebounds
Retail sales in April disappointed with a .2% m/o/m drop in sales ex autos and gasoline, below the estimate of a gain of .3%, only partially offset by a 2 tenths upward revision to March. If we also take out building materials, sales were flat m/o/m vs the estimate of up .3%. This core measure was revised up by one tenth for March. With respect to building materials, …
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Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.