For those who care about gold such as myself, in the just released CFTC data for the week ended Tuesday, speculators went net short for the first time since December 2001 when gold was priced at $275 an ounce. It’s tough to find a more contrarian indicator. NET SHORT in GOLD …
Please read this on inflation
I included the data on UoM in the just released Succinct Summation but if not read until later, I want to highlight what went on with buying intentions: What was most noteworthy in the data was the big drop in spending intentions and the UoM is attributing this to higher inflation. “The dominating weakness reflected much less favorable assessments of buying …
Some goings on
Reflecting our new found correlation to the Turkish lira this week, when it went negative vs the dollar (now down 6%) at 4:45am, the German DAX went negative and the S&P futures followed. With Turkey's markets closed all of next week for a public holiday (perfect timing), anything is possible today in terms of positioning. This even more so since so much of …
Foreign buying of US Treasuries
Reported last night was a rather sharp rise in foreign net selling of US Treasury notes and bonds of $48.6b in June. It is the largest one month of selling since October 2016. It brings the year to date level of buying at $20b which compares with $20b of buying in all of 2017 and outright net selling in 2016. Back in 2011 and 2012 foreigners were buying over $400b …
Claims/Housing/Mfr’g
Initial jobless claims totaled 212k, 3k less than expected and down 2k from last week. Due to a print of 208k dropping out of the average, the 4 week average did tick up by 1k to 216k. Continuing claims, delayed by a week, fell by 39k after rising by 34k in the week prior. Bottom line, the pace of firing’s remain very benign with the labor market strong and the …
‘talks about trade talks’
The story that a get together between Chinese and American officials (The Chinese Vice Commerce Minister and David Malpass) in a few weeks helped US markets more so than Chinese ones. I saw a quote on BN from an analyst at the Bank of China's Institute of International Finance in Beijing that said "This will be 'talks about trade talks.' Lower level officials will …
IP and Housing
Manufacturing production in the US rose .3% m/o/m as expected in July. The production of auto’s continued to bounce for a 2nd month after two months of weakness in part due to a Ford factory shutdown. The production of machinery and computer/electronics helped also to boost production. The headline IP gain of .1% was kept in check by a decline in utility and mining …
Retail sales/Mfr’g/Productivity
Core July retail sales were in line with expectations when including the modest June revision. The so called ‘control group’ (ex auto’s, gasoline and building materials) sales rose .5% m/o/m vs the .4% estimate but June was revised down by one tenth. Core sales versus last year grew by 4.8% which is above the 5 year average of 3.5% but still below the 5%+ reads in the …
China/Market Sentiment/US Housing
Today is less about Turkey as the lira is up about 3% (after Turkey announced a limitation on banks level of currency swaps they can do which was being used to short the lira) vs the US dollar and more about China and the rest of EM. An unexpected rate hike by the Indonesian central bank by 25 bps to 5.5% was not enough to stem the decline in the rupiah (even though …
A lot going on
We have a temporary respite in the plunge in the Turkish lira as it is rebounding about 5% with Corporate Turkey (particularly the banks) now putting huge pressure on the government to do something, anything. With this whole episode we can of course easily blame the economic incompetence of the Erdogan government and paralysis of its central bank but blame also has to …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.