Initial jobless claims totaled 861k, well above the estimate of 773k and up from 848k last week which was revised from 793k. The 4 week average fell by 4k to 833k. Those receiving PUA jumped to 516k from 342k.Continuing claims, delayed by a week, fell to 4.49mm from 4.56mm in the week prior. The estimate was 4.43mm. Delayed by two weeks, those continuing to claim PUA …
Sentiment/Global debt levels
Yesterday Investors Intelligence said Bull rose .5 pt w/o/w to 59.1 where I've said many times above 55 is stretched and 60+ is extreme. Bears, after rising last week, fell back by .2 pts to 18.1. The spread of 41 remains very elevated. Sentiment for the individual investor according to AAII got even more bullish as Bulls rose another 1.6 pts after jumping by 8.1 pts …
20 yr bond auction was bad
The 20 yr bond auction (first began back in May 2020) was bad. The yield of 1.92% was more than 2 bps above the when issued. The bid to cover of 2.15 was well below the average since they started of 2.40 and it is the weakest of them all by far. Direct and indirect bidders took 71% of the auction, the least of the ten 20 yr auctions leaving dealers with the …
US IP/Home builder sentiment
US industrial production in January rose by .9% m/o/m, 5 tenths more than expected but partially offset by a 3 tenths downward revision to the increase seen in December. The manufacturing component was higher by 1% m/o/m, 3 tenths more than forecasted. Auto production fell again, likely in response to the lack of semiconductors that is currently halting production …
Retail sales/PPI
Thanks in part to the late December passage of another fiscal spending plan where unemployment benefits were extended and juiced and some income earners got another $600, retail sales jumped 6% m/o/m in the 'control group' in January after a 2.4% decline in December and .9% drop in November. Versus December, sales were up across the board with particular strength …
Yields/Gold/Bitcoin/Some data
Asian bonds overnight sold off following what's gone on here and in Europe, reinforcing again that this is a global move lower in price, higher in yield. The Aussie and New Zealand 10 yr yields both jumped 8-9 bps. The Singapore 10 yr spiked by 13 bps to 1.19%. The JGB 10 yr yield is now at .10%, higher by 3 bps over the past three days and it's the first time there …
NY manufacturing index/10 yr highs in inflationary pressures
The February NY manufacturing index, the 1st industrial number to be released, rose to 12.1 from 3.5 and that was twice the estimate. Keep in mind the headline number as well as the internals are very volatile month to month. New orders rose to 10.8 from 6.6 and backlogs finally got back above zero for the 1st time since March 2020. Inventories too is again above zero …
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Global rates
As long term interest rates continue higher globally amid mass inoculation optimism, rising inflationary pressures and commodity prices and higher inflation expectations, because of the massive amount of debt outstanding and record high duration levels, the impact can be quantified. Bloomberg recently estimated that on a pile of $35 Trillion of bonds in the Bloomberg …
Succinct Summation of the Week’s Events – 2/12
Positives 1)The January CPI rose .3% headline and was flat at the core level. The headline figure was as expected while the core rate was below the estimate of up .2%. Versus last year the headline gain is 1.4%, the same pace as in December. The core rate is higher also by 1.4% vs 1.6% in the month prior. The rise in goods prices is being offset by the …
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You gotta be in it to win it
If there is one characteristic on its surface as counter intuitive of this bull run has been the elevated level of the VIX but one thing we've learned is that a big factor is the massive amount of call buying where historically most people are buying index puts as a hedge. Here is an updated chart of US call option contract buying. The visual says it all. The dice is …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.