Positives 1) The Fed puts its flexibility in writing for both rates and the balance sheet with the latter only going to shrink by maybe another $500b. 2) Payrolls in January surprised to the upside with a gain of 304k, almost double the estimate of 165k but December was revised down by 90k. Previous months to that were also tweaked. Average hourly earnings rose …
[Read more...] about Succinct Summation of the Week’s Events – 2/1
While the Fed is now ‘flexible’ in how it approaches this rate hike cycle and the run off of the balance sheet, they barely changed their assessment of the economy. They repeated “that the labor market has continued to strengthen and that economic activity has been rising at a solid rate. Job gains have been strong…Household spending has continued to grow strongly, …
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 …
[Read more...] about Succinct Summation of the Week’s Events – 1/25
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 …
[Read more...] about Succinct Summation of the Week’s Events – 1/18
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% …
[Read more...] about Succinct Summation of the Week’s Events – 1/11
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 …
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 …
[Read more...] about Succinct Summation of the Week’s Events – 1/4
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. …
[Read more...] about Succinct Summation of the Week’s Events – 12/21
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 …
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 …
[Read more...] about Succinct Summation of the Week’s Events – 12/14
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.
