The July Philly manufacturing index saw a sharp snapback, rising to 21.8 from .3 and that was well above the estimate of 5.0. It printed 16.6 in May and the July read is the best since July 2018. New orders rose 10.6 pts to 18.9, the highest since January but backlogs fell by almost 7 pts to 3.7. Inventories were higher by almost 6 pts in contrast to what the NY …
Trade/Some rate cuts/Other
Yesterday we saw the awful June export data out of Singapore. Today, Japan said its June exports fell 6.7% y/o/y, more than the forecast of a 5.4% drop and follows a 7.8% y/o/y fall in May. This is the 7th month in a row of y/o/y declines. Exports to the US were fine, rising almost 5% but plunged by 10% to China. After 30 yrs of failure and watching a 90% decline …
Beige Book/Inflation comments
In the just reported Beige Book from the Fed where “Economic activity continued to expand at a modest pace overall from mid-May thru early July, with little change from the prior reporting period” I’m just going to list comments from the different Districts on prices to see what, if any, the impact has been from tariffs and on inflation overall. The responses were …
Two more things
Trade got worse in June if Singapore is any indicator. Non oil exports plunged by 17.3% y/o/y, well worse than the estimate of a 9.6% drop. Within this and mostly driving the decline, electronic exports dropped by 32% y/o/y vs the forecast of 22%. This is now the 5th month in the past 6 seeing y/o/y declines and the June drop is the biggest since February 2013. The …
Housing and construction/Sentiment
Lower mortgage rates are only helping so much. Housing starts in June totaled 1.253mm, slightly below the estimate of 1.260mm and May was revised down by 4k to 1.265mm. This brings the 3 month average to 1.263mm vs the 6 month average of 1.238mm and the 12 month of 1.223mm. Thanks mostly to multi family though have these figures hung in. In June, single family starts …
Only 1% think this is going to happen
It was 3 months ago when Business Week had a headline magazine cover titled “Is Inflation Dead?” Today, I heard today that in the BoA monthly fund manager survey, all of 1% of those surveyed are predicting an increase in inflation over the coming 12 months. It was 80% one year ago. So yes, 99% of those surveyed see flat to lower inflation from here in the next …
IP/Home builders
Industrial production in June saw no change m/o/m, one tenth less than expected. Manufacturing production however beat the estimate by one tenth with its .4% m/o/m increase. Weighing on the headline figure was the decline in utility output due to the weather while motor vehicle/parts mostly boosted the manufacturing side but with retail sales of auto’s flat lining …
Retail sales good/Import prices
Core retail sales in June exceeded expectations with a .7% m/o/m increase, more than twice the estimate of up .3% and May was revised up one tenth to a gain of .6%. Auto sales rose .7% m/o/m for a 2nd month and are up 1.7% y/o/y while building materials rose .5% after two months of declines but are still down 4.7% y/o/y and I argue again are negatively impacted by the …
Cass Freight, ARW. Bonds agree with them, stocks don’t
It's that time of the month for the Cass Freight Index, for June. The index that basically measures the transportation of every single good that is produced and traverses its way through the US highways, railways, airways and seaways. It fell 5.3% y/o/y in June, the 7th straight month of declines and Cass Freight repeats what it said in May, "the shipments index has …
[Read more...] about Cass Freight, ARW. Bonds agree with them, stocks don’t
NY manufacturing
The NY July manufacturing index was a bit better than expected at 4.3 vs the estimate of 2 and an uptick from the weak June print of -8.6. It though was 17.8 in May. Some key components remain negative, some less so, some not. After dropping from +9.7 to -12 in June, new orders bounced to at still below zero -1.5. Backlogs plunged by 17.9 last month and rose about 10 …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.