Putting aside one’s opinion on the market, here are some stats that we can all agree reflect an extraordinarily stretched situation this morning that was a precursor to the breather we are seeing this afternoon. I had to go back to early 1971 to see the daily 14 day Relative Strength Index this high in the SPX. On the DJIA, go back to 1955. For the monthly RSI in the …
NY Manufacturing
The January NY manufacturing index was 17.7, 1.3 pts below the estimate and down from 19.6 in December. It’s quietly at the lowest level since July. New orders fell to 11.9 from 19 but backlogs rebounded to 4.3 off the deeply negative print of -8.7 last month. Employment fell all the way down to 3.8 from 22.9 while the workweek is barely above zero at .8 from 9.3 in …
The Good and Bad of the Weaker US dollar
With the US dollar sliding to a 3 yr low and picking up steam to the downside over the past week, let's go over quickly some of the repercussions that come of this, both good and bad. The obvious good is for those multinationals that aren't FX hedged that get to translate their foreign earnings back to the US and thus boosting the dollars they collect in revenue. The …
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Consumer inflation and retail sales
Headline consumer price inflation in December rose .1% m/o/m after a .4% gain in November. That was expected and the y/o/y rise is 2.1%. The core rate was up by .3% m/o/m and that was one tenth above the estimate and the y/o/y gain increased to 1.8% from 1.7%. That core rate matches the highest level since April. Rents remain a key factor in the sticky inflation for …
China credit slowing!?
Credit growth really slowed in China in December as maybe, just maybe the attempts of Chinese authorities are actually working in moderating the breakneck pace of debt accumulation. Total credit extended totaled 1.14T yuan, below the forecast of 1.5T with bank loans coming in about 400b yuan less than expected being the main reason. Also of note, money supply growth …
30 year auction caps a great week
The 30 year bond auction was solid. The yield of 2.867% was below the when issued of almost 2.89%. The bid to cover of 2.74 is above the 12 month average of 2.30 and the highest since December 2014. Also, direct and indirect bidders took 79% of the auction leaving dealers with the least amount since at least 2006 that I have data for. The one year average is 70% for …
Bund yield key levels
I’ve cited the 2.63% yield of the 10 yr US note as the key level to watch as above that would be the highest since 2014. Both the German 2 yr and 10 yr bund yields are also approaching key levels. Here are the charts of each and what to watch for: GERMAN 2 yr yield (getting less negative) GERMAN 10 yr yield …
PPI, Claims and Market Sentiment
December PPI fell .1% m/o/m instead of rising by .2% as expected. The core rate also fell by .1% m/o/m vs the same estimate of up .2%. Both follow gains of .3-.4% in the month prior. The y/o/y rise slowed to 2.6% from 3.1% for the headline figure and the core rate went to 2.3% from 2.4%. Internally and keeping a lid on prices, there was no change in energy prices …
Good demand for 10 yr note’s
In the context of a wild and messy few days in interest rates, the 10 yr note auction was good. The yield of 2.579% was below the when issued of about 2.585%. The bid to cover of 2.69 was above the one year average of 2.44 and the best since June 2016. Also of note, direct and indirect bidders totaled 78%, above the 12 month average of 71%. Bottom line, a 10 month …
Import Prices
Import prices rose less than expected in December with a one tenth decline m/o/m in prices ex energy and food. They were though up 1.4% y/o/y, benign but around the highest level since 2012. The headline print was up 3% vs the estimate of 3.1% driven by energy. For perspective, the 25 year average in import prices is up 1.2%. Bottom line, thanks to a 10% decline in …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.