A key factor in the direction of the inflation stats of CPI and PCE in coming quarters will be rents where within CPI it is 32% of headline CPI and about 40% of core. Rents in PCE is about half that. We know home prices are rising double digits but the Fed ignores that because it's not directly imbedded in those inflation reads. Well, here are some comments from the …
Confidence jumps
Three million shots a day and the ever widening path out of Covid, further reopenings, the warmer weather and another round of government checks saw the Conference Board’s Consumer Confidence index jump by almost 20 pts m/o/m to 109.7 from 90.4. Both components were up solidly. For perspective, the 109.7 print is about the exact middle of the February 2020 high …
Global yields
The selloff in global bonds that is seeing US long rates go to new recent highs started in Asia with yields jumping by 9 bps in Australia in their 10 yr to 1.78%. New Zealand and South Korea saw similar moves. The Japanese 10 yr JGB yield was higher by 1.6 bps to .09% and the 40 yr was up by 2 bps to .71%. European yields are higher by 4-8 bps across the board. The …
Dallas mfr’g, the pros & cons
Recovering from the weather shock in February, along with the previous factors of the need for inventory rebuilding that is getting clogged up with logistical issues and raw materials, in addition to getting prepared for further reopenings, the Dallas manufacturing index in March rose to 28.9 from 17.2 and well better than the estimate of 16.8. New orders, …
I don’t have much today
It's pretty quiet today ahead of a big week of economic data and an expected announcement from Biden & Co. of ever more government spending and now with massive tax increases. You can be sure the spending with have a multiplier less than zero and tax increases are always an economic drag with the extent the only difference. As for the hype around infrastructure, …
Succinct Summation of the Week’s Events – 3/26
Positives 1)Initial jobless claims fell to 684k from 770k and that was 46k less than expected and the lowest since the spike last March. Those collecting PUA fell to 242k from 284k. Delayed by a week, continuing claims also continued its shrink to 3.87mm from 4.13mm and below the estimate of 4mm. 2)The March US manufacturing and services PMI from Markit …
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Inflation, income and spending, oh my
The February headline PCE inflation figure rose .2% m/o/m and .1% core, about as expected. The headline rate is up 1.6% y/o/y vs 1.4% in January. The core rate is up by 1.4% vs 1.5% last month. As I hear the inflation deniers in my ear, I’ll say three things here, if what General Mills said this week is any indication that they will now start “taking price” in …
A few things
Japan said consumer prices in March in Tokyo rose .3% y/o/y ex food and fuel. That was up from .2% in February and one tenth more than expected. March saw on and off restrictions in Tokyo and ran up against a 7 tenths increase comp from one year ago. As price gains remain benign but with higher energy prices soon to be lifting the topline back into positive territory, …
Not as bad but still not good
While not as bad as the last one in February, today’s 7 yr note auction was not good. The yield of 1.30% was above the when issued level of 1.275%. The bid to cover of 2.23 was well below the one yr average of 2.41 although not as low as the 2.04 seen last time. A slight positive though, direct and indirect bidders bought 75% of the auction vs the 12 month average of …
Claims data
Initial jobless claims fell to 684k from 770k and that was 46k less than expected and the lowest since the spike last March. Those collecting PUA fell to 242k from 284k. Delayed by a week, continuing claims also continued shrink to 3.87mm from 4.13mm and below the estimate of 4mm. Delayed by two weeks, those continuing to receive PUA rose by 112k to 7.7mm while …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.