While Asian stocks bounced nicely, particularly those in China, the other action of note was in Japanese bonds. What began as a subtle taper has now gone stealth. The BoJ today cut the amount of bonds they bought with maturities north of 25 years by 10b yen. The 40 yr yield that I like to watch jumped 5 bps to 1.05%. That's the highest since November. The 10 yr yield …
Latest Data
Existing home sales
Existing home sales in August totaled 5.34mm annualized, 30k less than expected and that level is unchanged from July. Home prices rose 4.6% and is below 5% for the 3rd straight month which I believe is a welcome retreat for would be home buyers. Months’ supply was unchanged at 4.3. Those first time buyers made up 31% of total purchases which is about in line with …
Data
Initial jobless claims totaled 201k, 9k less than expected and down from 204k last week. This brings the 4 week average down to 206k from 208k last week. November 1969 was the last time it was lower. Again, this reflects the very tight market for labor where the leverage is shifting to employees from employers. After falling from 25.7 to 11.9 last month, the …
Rising rates do matter/Overseas stuff
US yields are taking a breather being little changed after a pretty persistent rise with 4 weeks of gains. A close in the 10 yr yield above 3.11% would put it at the highest since 2011. The rise in rates I guess wouldn't matter that much if it wasn't for all the debt out there (global debt is $247 Trillion, 318% of GDP), particularly on the corporate side. Total …
Foreign buying of US Treasuries/Yields
After selling a net $48.6b of US notes and bonds in June, the largest amount since October 2016, foreigners stepped back in with net purchases of $18.9b in July. This brings the year to date purchases to $39b which compares to full year buying in 2017 of $20b. We saw selling in previous years and buying of $400b per year in 2011 and 2012. Central banks were again …
Home builder sentiment
The NAHB September home builder sentiment index held at 67, 1 pt better than expected. It remains though the lowest print since September 2017 but is still at an elevated level. Current conditions rose 1 pt m/o/m after falling by 1 pt last month. The outlook was up by 2 pts. Prospective Buyers Traffic was unchanged at 49, matching the lowest since October. Regionally, …
Response now official
BN: *CHINA TO LEVY TARIFFS ON $60B U.S. GOODS, EFFECTIVE SEPT. 24 …
Fun Times
At least for now, instead of getting us closer to the bargaining table with China, we've only pushed them further away as they are likely canceling their trip to the US and are ready to retaliate. The Chinese commerce ministry said "China will adopt countermeasures to safeguard its legitimate rights and interests and the global free trade order." The American Chamber …
NY manufacturing
The NY manufacturing index, the first September industrial number to be reported, fell 6.6 pts m/o/m to 19, 4 pts less than expected. That is a 5 month low. Within the headline, new orders fell .6 pts to a 4 month low. Backlogs fell by 6 pts but after jumping by 11 last month. Inventories rose to a 4 month high (and seen elsewhere which will lift Q3 GDP after the drag …
Trade
Asian markets continue to bear the brunt of the tariff battle (Shanghai comp closed at the lowest level since November 2014) with smaller collateral damage in Europe and whistling in the US. Keep in mind that if US businesses and/or consumers cannot source product from an alternative supplier to China for these goods, it is US businesses and consumers that end up …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.