The Boock Report

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Some US economy stats

There was improvement in the Markit’s June US manufacturing and services PMI but were a bit below expectations. Manufacturing rose to 49.6 from 39.8 while services grew to 46.7 from 37.5. Again, direction not degree is the driver here as things reopen. With this composite index still below 50 at 46.8, it reflects a situation where “the overall pace of decline eased …

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Where have you gone Warren Buffett?/The bill

Before I get into the details of the bill, I just needed to sing this out loud because I'm so damn curious as to what Warren Buffett is thinking and doing with all that cash he's sitting on. "Where have you gone Warren Buffett? Our nation turns its lonely eyes to you. Woo, Woo, Woo. What's that you say, Mrs. Robinson? Walloping Warren has left and gone away." So …

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Bond yields/Swap lines/Sentiment/Housing

The fiscal largess that is coming our way is again weighing on global sovereign bonds with now the previous save havens of longer term US Treasuries, German Bunds, UK Gilts and Japanese JGB's no longer. The US 10 yr yield is up another 3 bps after yesterday's dramatic 36 bps spike. UK and German 10 yr yields are higher by about 15 bps while Japanese yields are up by 6 …

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Claims yet to show growing stress/PPI down now, up later?

For the week ended March 7th, initial jobless claims actually fell by 4k to 211k, 9k less than expected. This is a high frequency number and hasn’t showed any stress yet but it just seems inevitable that we are on the cusp of a jump. PPI was soft across the board, falling m/o/m and moderating the headline y/o/y increase to 1.3% and the core rate of 1.4%. Bottom …

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We’ve tariffed our way into a mfr’g recession

The September ISM manufacturing index fell further into contraction at 47.8 vs 49.1 in August and below the estimate of exactly 50. That is the weakest print since June 2009. New orders were little changed but still below 50 at 47.3. Backlogs fell 1.2 pts to 45.1 and that is the 5th time in a row it’s been below 50. The weakness in business was most obvious within …

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Good 2 yr auction

The 2 yr note auction, an area of the curve very sensitive to Fed policy and maybe an area of safety for those fixed income buyers shaken by what’s happened in money markets over the past week, was very good. The yield of 1.612% was about 1 bp below the when issued. The bid to cover of 2.64 was above the one year average of 2.56. And, direct and indirect bidders took …

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Consumer confidence slips as does mfr’g in Richmond region

The September Conference Board’s Consumer Confidence index fell to 125.1 from 134.2 and that was well below the estimate of 133. It’s also a 3 month low and below the average seen this year of 128.6. Of particular note was the weakness in the Expectations component which fell to 95.8 from 106.4 and that’s the lowest since January (right after stock market tanked) and …

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