A closing 10 yr yield with an 8 handle would be the first time since June and I believe will continue to move higher. A 1% yield is possible soon if a fiscal deal gets passed. The 200 day moving average is .87%. The 30 yr yield is already above its 50, 100 and 200 day moving averages and is at 1.61% today. There will be no free lunch with trillions of dollars of …
Housing starts, single family keeps on
September housing starts totaled 1.415mm, 50k less than expected and August was revised down by almost 30k to 1.388mm. The slippage from the estimate and in the revision was all in the multi family category as single family remained strong and as seen in the ebullient NAHB figure yesterday. Single family starts grew 8.5% m/o/m to 1.108mm from 1.021mm in August and …
Commodity price inflation
I've expressed my bullishness on commodities as part of my expectations for higher inflation in the coming year. Yesterday the CRB Food index closed yesterday at just under the highest level since August 2019 and based on where corn, soybeans and wheat are trading this morning, will likely close above today. Soybeans in particular are trading at the highest since …
Sentiment is ebullient
The NAHB October builder sentiment index rose 2 pts m/o/m to a robust 85. The estimate was for no change. This is another fresh record high. Present Conditions are now at 90 out of 100 with 50 being the breakeven. That is up 2 pts from September. The Future Outlook was up by 3 pts to 88 while Prospective Buyers Traffic was unchanged at 74. The NAHB said “Traffic …
A deadline!?/Fed/China
Well, Nancy Pelosi has finally put her own deadline (tonight) on whether a deal will be had before or after the election and I guess we'll see in the coming days whether one happens or not. The market reaction this morning is certainly saying yes we will, particularly the US Treasury market where the 10 yr yield is approaching .80% and the 30 yr is at 1.57%. I need …
Succinct Summation of the Week’s Events – 10/16
Positives 1)Core retail sales in September rose 1.4% m/o/m, well better than the estimate of up .3% and only partially offset by a two tenths downward revision to August to -.3%. 2)Continuing claims, delayed by a week, fell 1.17mm to about 10mm with the hopes that many found jobs. Pandemic Unemployment Assistance also fell to 373k from 464k. 3)The Philly …
[Read more...] about Succinct Summation of the Week’s Events – 10/16
IP weak, Consumer Confidence up a touch
Industrial production in September was weak and well below expectations. The headline print fell .6% m/o/m vs the estimate of up .5% while the manufacturing component fell by .3% instead of rising by 6 tenths as expected (only partially offset by a 2 tenths upward revision to August). Also, capacity utilization fell to 71.5% from 72%. For perspective, this number has …
[Read more...] about IP weak, Consumer Confidence up a touch
Retail Sales
Core retail sales in September rose 1.4% m/o/m, well better than the estimate of up .3% and only partially offset by a two tenths downward revision to August to -.3%. The original estimate for that August number though was up .3%. Auto sales, where we know has been good particularly with used cars, rose 3.6% m/o/m and 14.1% y/o/y. Building materials, an area also we …
PFE/Those poor European banks/Other
With Pfizer laying out the timeline on when we will hear news from them and their partner BioNTech, while saying it's obvious we hope to hear good vaccine news, if we do, we need to start shifting our investment focus to not what has worked but to what has gotten hammered. I don't believe in extrapolating that life over the past 6 months is forever and that if that …
Claims/Mfr’g/Import Prices
Initial jobless claims rose to 898k from 845k (revised up by 5k) and that is well above the forecast of 825k. That is also the most since August. Positively, continuing claims, delayed by a week, fell 1.17mm to about 10mm with the hopes that many found jobs but we also know some are losing their benefits as they expire. Pandemic Unemployment Assistance also fell to …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.