Ahead of US inflation data today at 8:30am we saw inflation news also from Japan and Europe. The Japanese read was specifically in Tokyo for May and it rose .5% y/o/y ex fresh food and energy, well more than the estimate of up .1%. It's rare that we see a higher than expected print in Japanese inflation and while the BoJ might be happy, I don't believe the Japanese …
Contract signings of existing homes
Pending home sales in April fell 21.8% m/o/m, worse than the estimate of down 17.3%. Versus last year, contract signings were down by 35%. The 48% decline m/o/m in the Northeast led the way with sales down 15-20% in the other 3 regions. This is in contrast to the surprise in new home sales in April relative to expectations (but still down a lot from the peak) and I’m …
Claims/Durable Goods Orders/Q1 GDP
Initial jobless claims totaled 2.123mm, a touch above the estimate of 2.10mm but down from 2.44mm last week. It’s the 8th week in a row of moderation but all self inflicted. Continuing claims, delayed by a week relative to initial claims, moderated to a still alarming 21mm from 24.9mm in the week prior. This is likely due to businesses beginning the reopening process. …
Sentiment/Valuations/China/Europe
After seeing an extreme 'Euphoric' read in the Citi 'Panic/Euphoria' index as stated on Tuesday and and extended level of bullishness in yesterday's II figure, today's AAII sentiment gauge of individual investors saw a 4 pt rise in Bulls to 33.1 after last week's 5.7 pt increase. That's a 6 week high. Bears still outpace them though but less so as they fell 2.9 pts to …
Europe driving the bus today
Today it's the Europeans that are driving the equity rally. We haven't said that in a while. In the works for weeks, a 750b euro borrowing binge by the European Commission will then get parceled out in grants (500b euros) and loans (250b euros) to individual states. Italy will get about 82b, Spain around 77b, France 39b to name a few. I'm not sure if any strings are …
Home sales/Consumer Confidence
New home sales in April, thus smack in the middle of the shutdown, totaled 623k, well better than the estimate of 480k and actually up from 619k in March but down from 717k in February. It was homes priced below the $300k level that held up. Those priced above $500k slipped for a 2nd month. Smoothing out the last few months has the 3 month average at 653k vs the 12 …
The Hall Pass continues on but…
The markets hall pass continues on as more things reopen around the globe, patient counts slow and hopes for a vaccine grow. At least in one valuable sentiment indicator all this has now been fully reflected. The Citi Panic/Euphoria index has now reached a new high over the past year in 'Euphoria'. According to Citi, "Historically, a reading below panic supports a …
Succinct Summation of the Week’s Events – 5/22
Positives 1)All 50 states have at least something reopened, even NJ and NY. 2)This is still a really poor number but better than what was seen in April (anything is). The May Markit manufacturing and services PMI bounced to 36.4 from 27 with most of the gain coming from the services sector which rose to 36.9 from 26.7. Manufacturing improved by 3.7 pts to …
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I don’t have much but still important stuff
China telling Hong Kong what national security rules are best for them is not going over well in Hong Kong as it shouldn't. Premier Li said "We will establish sound legal systems and enforcement mechanisms for safeguarding national security in the two special administrative regions, and see that the governments of the two regions fulfill their constitutional …
[Read more...] about I don’t have much but still important stuff
Mfr’g and services PMI
The Markit May manufacturing and services PMI bounced to 36.4 from 27 with most of the gain coming from the services sector which rose to 36.9 from 26.7. Manufacturing improved by 3.7 pts to 39.8. Keep in mind with all this that 50 is the breakeven between expansion and contraction. The bottom line is as we know. Things are improving as we reopen but there is still …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.