As we enter the week with hopes for some trade document by week’s end and as we all debate what’s priced in and what’s not, the VIX on Friday closed at around the lowest level since early October 2018 at 12ish. Late Friday, the CFTC data for the week ended last Tuesday revealed that non commercial (speculators) in the VIX futures were the most net short on record. …
Hong Kong/Key China data/Here we go again
The continued and disturbing impact on life, limb, civility, business, etc... of the Hong Kong protests where I applaud the stance and messaging but there seems to be no end in sight, is back to negatively impacting markets in the region and elsewhere today. The Hang Seng index closed lower by 2.6% while the Shanghai comp lost 1.8% and the H share index gave up …
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Succinct Summation of the Week’s Events – 11/8
Positives 1)While this potentially could be momentous (sorry for the hyperbole), disruptive, destructive to holders and possibly temporary if I’m wrong, the shrinking pile of negative yielding securities to the lowest since June is desperately needed in order to reestablish a more normal, functioning financial system. 2)The October ISM services index rose to …
[Read more...] about Succinct Summation of the Week’s Events – 11/8
Consumer confidence little changed
The initial November UoM consumer confidence index was little changed with October at 95.7 vs 95.5 last month. The estimate was for no change at 95.5 while the internals were mixed as Current Conditions fell 2.3 pts while Expectations were higher by 1.7 pts. One year inflation expectations held at 2.5%. With respect to the labor market, those expecting …
$ amount of negative yielding bonds/Some data
To quantify the selloff in sovereign bonds this week globally, as of yesterday's close the dollar denominated amount of negative yielding securities has fallen to $11.9 Trillion vs $12.5 Trillion on Wednesday and down from $13.3 Trillion last Friday. That's the least since mid July. Japanese and European bank stocks have been a key beneficiary thankfully for them. …
[Read more...] about $ amount of negative yielding bonds/Some data
30 yr auction/10 yr yield biggest jump since election
I usually don’t comment on 30 yr bond auctions because it’s usually dominated by insurance companies and pension funds, but in light of the sharp fall in price, spike in yields in US Treasuries, I will today. The bond auction was mixed as the yield of 2.43% was slightly above the when issued but the bid to cover of 2.23 was in line with the one year average. The …
[Read more...] about 30 yr auction/10 yr yield biggest jump since election
Initial claims
Initial jobless claims totaled 211k, 4k less than expected and down from 219k last week (revised up by 1k). Because a like amount print of 210k dropped out of the 4 week average, it held at 215k. Continuing claims, delayed by a week, was little changed. Bottom line, the pace of firing’s remains low and the slowing pace of hiring’s has yet to spill over. I remain …
China making a stand/Yields continue to jump/Sentiment/Other
I'm encouraged to hear that the US/China have laid out a path to rolling back the existing tariffs in addition to not implementing the December 15th ones. But, all we've heard from on this is from the Chinese Ministry of Commerce, not any US official. Thus, details are scant on what the process and enforcement would be on eliminating in tranches the current tariffs on …
[Read more...] about China making a stand/Yields continue to jump/Sentiment/Other
10 yr auction was good
The 10 yr note auction was good. The yield of 1.809% was below the when issued by about a full basis point. The bid to cover of 2.49 was above the one year average of 2.42. And, direct and indirect bidders took about 77% of the auction which is the most since June and slightly above the 12 month average of 75%. Bottom line, the highest yield in almost two months …
Productivity/Profit margins
Q3 productivity disappointed, falling by .3% q/o/q annualized vs the estimate of up .9%. Versus Q3 last year, productivity still was up 1.4% but a moderation from the 1.8% and 1.7% gains in the prior two quarters. Due to the q/o/q fall in productivity, unit labor costs jumped by 3.6% q/o/q and 3.1% y/o/y. That y/o/y gain follows a 2.6% rise in Q2 and it’s the biggest …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.