Let's separate the three different issues that the Administration is focused on addressing when it comes to their current strategy on trade taxes. Firstly, protecting the technology of American companies from Chinese theft, a very worthy goal and this article Friday in the NY Times highlights the challenges being …
US services and mfr’g, mixed details
The US Markit manufacturing and services composite index fell to 56 from 56.6. The manufacturing component moderated to 54.6, a 7 month low from 56.4 while services were little changed at 56.5 vs 56.8. Manufacturing was weighed down by “intense pressure on manufacturing supply chains, with delivery times for inputs lengthening to the greatest extent since the index …
Are we there yet?
In the eternal BoJ quest for higher inflation, Japan reported May CPI up .7% ex food as expected and unchanged with April. Taking out both food and energy saw CPI up .3% as forecasted but down one tenth from April. Will Kuroda at some point acknowledge that the amount of money printed (BoJ balance sheet is now almost the same size as the Japanese economy) doesn't …
Claims/Philly Fed
Initial jobless claims totaled 218k, 2k less than expected and down from a revised 221k last week (1st print was 218k) so we’ll call it a push relative to expectations. These remain very low levels of firing’s for reasons we all know so I won’t bother repeating the bottom line which has been the same for a while. The 4 week average of 221k is down 4k w/o/w and is near …
Complicated Situation/BoE moves closer to rate hike
The German auto maker Daimler news last night where they cut earnings estimates due to the Chinese trade taxes is a sign that those impacted are not always who you think as supply chains crisscross everywhere. The taxes on Daimler is on the cars they make in the US (Alabama) that is then shipped to China. They said "Fewer than expected SUV sales and higher than …
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Home sales have flat lined
Existing home sales in May totaled 5.43mm annualized, about 100k less than expected and down slightly from April’s level of 5.45mm. This is the lowest level since January and the 2nd weakest print since September and likely reflects contracts signed in the February thru April time frame. As it does seasonally in the spring selling season, the number of homes for sale …
PBOC tries to calm nerves
Keep Calm and Carry On was the message from the PBOC overnight to the Chinese people. "We'll be forward looking, prepare relevant policies, and comprehensively use all kinds of monetary policy tools...China has room to face all sorts of trade friction." After trading down all morning, the Shanghai comp did rebound a touch in the afternoon with a full day .3% gain. The …
Housing starts
Housing starts in May totaled 1.35mm, about 40k more than expected and up from 1.29mm in April. We saw a lift in both single family and multi family starts with the former at the highest level since November. The breakdown here though was very concentrated as it was almost all in the Midwest. Single family starts in the Northeast were up a touch and fell slightly down …
Trade war of attrition
The strategy now seems a trade war of attrition defined on Google as "a prolonged war or period of conflict during which each side seeks to gradually wear out the other by a series of small scale actions." I repeat that I get what the end goal is but the means to that end is now going off the rails if this is the current strategy (how else to explain that US …
Builder sentiment
The NAHB home builder index in June fell 2 pts m/o/m to 68. The estimate was for no change. Each component, Present Conditions, Future Expectations and Prospective Buyers Traffic fell 1 pt from May. The NAR is citing worries about lumber tariffs as a key reason for the decline from last month. “Builders are optimistic about housing market conditions as consumer demand …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.