The January CPI saw no change at the headline level and a .2% core rate of increase which brings the y/o/y increases to 1.6% and 2.2% respectively. This is in line with expectations. Another decline in oil prices kept a lid on the headline figure. Food prices were up .2% m/o/m and 1.6% y/o/y. In what continues to be the case, services inflation ex energy remains …
[Read more...] about Please stop telling me there is no inflation
If the market is rallying this morning because the government won't shut down again, I'd find a better reason for chasing it at 9:30am est since we had the best January in 30 years when it was closed. Make your reason related to China trade talks (where the March 1st deadline is likely to be extended), earnings, Fed policy, economy, etc... Small business optimism …
Positives 1) In November, the US trade deficit fell to $49.3b from $55.7b in October. That’s well below the estimate of $54b but was mostly due to a 2.9% drop in imports to the lowest since June as exports fell .6%. While this will boost Q4 GDP, it’s not for the right reasons and instead is just the math. Reflecting the slowdown in key economies and regions …
[Read more...] about Succinct Summation of the Week’s Events – 2/8
The revised January services PMI for the Eurozone was lifted to 51.2 from the first print of 50.8 and that puts it unchanged with December. That though is a 49 month low with France and Italy "the primary sources of weakness, with both countries registering declines in activity during January." Business improved in both Germany and Spain. The combined manufacturing …
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 …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.
