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Succinct Summation of the Week’s Events – 1/25

Positives 1) The Markit US manufacturing and services composite index held steady in January at 54.5 vs 54.4 last month. There was a 1.1 rise in manufacturing m/o/m off the lowest level since 2016 and a .2 pt drop in services. Markit said this on manufacturing: “The improvement…was driven by the fastest expansion of production since May 2018. New orders, employment …

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Succinct Summation of the Week’s Events – 1/18

Positive 1) With the UK Parliament now likely taking some control over the negotiating process, I believe the odds of a no deal/hard Brexit shrinks to almost nothing. 2) Initial jobless claims totaled 213k, 7k less than expected and down from 216k last week for the week ended January 12th. The 4 week average fell by 1k to 221k. The BLS said that claims by …

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Succinct Summation of the Week’s Events – 1/11

Positives 1) It seems that the US/China negotiations are progressing to some sort of deal as Mr. Market and the underlying economies of each are pressuring both to resolve this. 2) Thanks to lower energy prices, headline CPI was up by 1.9% y/o/y, the least since August. But, the core rate was still up 2.2% y/o/y for the 4th month in the past 5 and is up .2% …

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Mr. Market has sway

One month ago I wrote this: "It now seems we have a 3rd party at the US/China trade negotiation. His name is Mr. Market." This comment followed a  WSJ report "As Trade Battle Unfolds, Trump Keeps Close Focus on Markets." Randall Forsyth also hit it on the head in Barron's the weekend before saying "It's the Stock Market Stupid." I also said, "live by the Tweet on the …

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Succinct Summation of the Week’s Events – 1/4

Positives 1) December payrolls grew by 312k, well above the estimate of 184k while net revisions to the 2 previous months were up by 58k. The household survey showed job growth of 142k which combined with an increase of 419k in the size of the labor force brought up the unemployment rate by 2 tenths to 3.9%. The all in U6 rate though held at 7.6%. The participation …

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Succinct Summation of the Week’s Events – 12/21

Positives 1) Jay Powell seems to be trying to wean the economy and markets from the addiction of many years of excessively cheap money and away from this seemingly endless regime of negative real interest rates and the legacy of QE. 2) Initial jobless claims were about as expected at 214k vs 206k last week. This brings the 4 week average to 222k from 225k. …

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So much for that dovish hike

Well, not only did the Fed hike rates as widely expected, they kept language in the statement that “further gradual increases” are warranted where many thought they would take that out. Thus, this was not a dovish hike as many were expecting and certainly hoping for. With the commentary on the economy, they maintained their belief that “the labor market has …

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Succinct Summation of the Week’s Events – 12/14

Positives 1) China will remove its 25% auto tariff they put in place in July on US exports and they will start buying soybeans again in January. While we are just removing a negative, let’s hope it is a precursor to the positive of something substantive agreed upon with respect to protecting technology patents. 2) After an unexpected rise in claims over the past …

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There is now a 3rd person at the negotiating table

It now seems we have a 3rd party at the US/China trade negotiation. His name is Mr. Market. Late Friday the WSJ reported that "As Trade Battle Unfolds, Trump Keeps Close Focus on Markets." Randall Forsyth also hit it on the head in Barron's over the weekend saying "It's the Stock Market Stupid." I'll say, live by the Tweet on the stock market, die by it. It's clear …

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Succinct Summation of the Week’s Events – 12/7

Positives 1) The November ISM services index rose .4 pts to 60.7 and that was 1.7 pts better than expected. For comparison, the 6 month average is 59.3. The breadth of the growth remained good as 17 of 18 industries surveyed saw growth, the same level for a 3rd month. This said, 15 of 18 saw growth in new orders, the least in 4 months. Also, all 18 industries said …

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