I said last Wednesday that "We must expand our thoughts past the most interest rate sensitive parts of the economy like housing and autos" in trying to connect the economic dots in how this higher rate regime will infect more things. I also said "now I'm also focusing closely on the private equity and venture capital business, two that have partied on over the last …
[Read more...] about Another accident/Zero chance of 50 bps I believe
Initial jobless claims rose back above 200k for the first time since the first week of January at 211k, up from 190k last week and 16k more than forecasted. This lifted the 4 week average to 197k from 193k. Also of note, continuing claims jumped by 69k to 1.72mm, matching the highest since January 2022. This follows the Challenger job cut February report an hour …
[Read more...] about Claims data – highest continuing claims since Jan 2022
In case you didn't see, here were a few more notable general comments from yesterday's Beige Book. "Six Districts reported little or no change in economic activity since the last report, while six indicated economic activity expanded at a modest pace." Remember that this comes after 1% real growth in 2022 that came after the 2021 reopening. "On balance, supply …
[Read more...] about A few things and Kuroda’s swan song, good riddance
As the Beige Book has so much anecdotal information and I don’t want to inundate you with too much, I’m going to hone in on the comments on the very interest rate sensitive commercial real estate sector as that is not just really important for the landlords but also for the banks that lend money to them. We know of course that those with floating rate debt and/or have …
Job openings in January totaled 10.82mm, almost 300k above the estimate but down from 11.23mm in December. Hiring’s rose by 121k from December and the hiring rate was 4.1% vs 4% in December and 4.1% in November. The number of quits fell and the quit rate fell to 2.5% which is the lowest since February 2021. Well, at least in the most interest rate sensitive part of …
[Read more...] about JOLTS, job openings plunge in construction and other real estate
ADP said 242k private sector jobs were added in February following 119k in January. While that was above the estimate of 200k, the January figure was of course quite different than what the BLS told us. Of note, small businesses shed jobs, totaling 61k but was offset by the rise in hiring by medium and large companies. For a local restaurant or small business to …
While Jay Powell continues to feed the rates market more gummies, not appreciating the time delay feature, nor the shock of a vertical rise in rates in just one year and that positive real rates for a while will itself be a continued form of monetary tightening, the Bank of Canada is expected to sit on its hands today, keeping its overnight rate at 4.5%. Swait Dhingra …
[Read more...] about Powell and rates, overseas dissent/Some data points/Mexico
After taking an Advil while watching the questions being asked of Powell and with Powell saying the dot plot in a few weeks will most likely tilt up in terms of the median end point of the fed funds rate from the previous 5.4%, the fed funds futures market is pricing in a 48% change of a 50 bps hike in two weeks. That is up from 28% yesterday. The end rate is now up …
[Read more...] about A time for Advil and a check on the fed funds futures
Cutting to the chase of Powell’s prepared testimony, he said “Although inflation has been moderating in recent months, the process of getting inflation back down to 2% has a long way to go and is likely to be bumpy…If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes. Restoring price …
[Read more...] about “We will stay the course until the job is done”
With the stock market shrugging off the deteriorating earnings picture, it's quite apparent that the only thing it's focused on is the end of Fed hikes. Yeah, the Fed has a few more to go, but it's clear that there is an assumption that we're close to the end. Thus, Jay Powell day, as it is at each FOMC press conference and speech, will again be a binary event as …
[Read more...] about Powell/RBA/KEY and some comments on CRE/Trade data
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor. Each day The Boock Report provides summaries and commentary on the macro data and news that matter, with analysis of what it all means and how it fits together.
