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Housing starts in June totaled 1.173mm, well less than the estimate of 1.32mm and May was revised down by 13k to 1.337mm. The contribution to the miss was from both single family starts and multi family. Single family starts in particular fell to the lowest level since December at 858k. Also of note was the 78k m/o/m drop in multi family construction which fell to …

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Positive 1) WSJ reports: “Germany’s largest auto makers back abolition of EU-US car import tariffs.” We have a 2.5% tariff on their cars and a 25% tariff on their SUV’s, pick up trucks and vans and they have a 10% tariff on our cars/trucks. Zero on all would be great. 2) Initial jobless claims totaled 218k, 2k less than expected and down from a revised 221k last …

[Read more...] about Succinct Summation of the Week’s Events – 6/22

Positives Initial jobless claims totaled 233k, 2k less than expected and the prior week was revised down by 4k to 216k. This lowers the 4 week average to 240k from 244k and that is a one month low. Continuing claims, delayed by a week, fell by 28k after rising by 92k last week. The highest 30 yr mortgage rate in 10 months at 4.36% brought buyers off the fence …

[Read more...] about Succinct Summation of the Week’s Events – 1/26

United States As we all try to figure out what the profit and growth implications are of the upcoming passage of a tax bill, the only analysis from Wall Street I’ve seen so far on earnings per share is an all else equal calculation of a lower tax rate. We need to widen the analysis. In Q3, companies paid out $7 Trillion of wages and salaries to the private sector. …

[Read more...] about All else won’t be equal / Higher cyclical inflation is upon us I believe

Japan In the central bank quest for higher inflation (aka, a higher cost of living matching 2%), Japan reported that core CPI (ex food for them) rose .7% y/o/y in September as expected and unchanged from August. It does though match the highest level since March 2015 when the CPI prints were rolling thru the impact of the VAT increase. Also taking out energy prices …

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U.S. Equities Quantifying the intensity and relentlessness of the rally specifically in the DJIA has the 14 day Relative Strength Index at the highest level in 62 years. Yes, go back to June 1955 the last time it was this high at 88. Here is a chart of the DJIA since 1955 and note the sign of parabola since the November 8th election. DJIA since 1955, the last time …

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United States September housing starts totaled 1.127mm annualized, 50k less than expected and down from 1.183mm in August (revised up by 3k). There was a 40k m/o/m start drop for single family homes to 829k and that is a 4 month low. Multi family starts fell by 16k to 298k and that is a one year low. Looking forward, single family permits rose by 19k after falling by …

[Read more...] about Housing starts / Sentiment / Rates / Data / Xi

The October NY manufacturing index rose almost 6 pts to 30.2 and that was about 10 pts above the estimate. The index level also matches the best level in 8 years. Notwithstanding the headline jump, the internals were more mixed. New orders fell 7 pts to a 3 month low at 18 after rising by 4.3 pts in September. Backlogs dropped by 6.6 pts to 2.3 and inventories fell …

[Read more...] about NY mfr’g jumps but…

Europe The Markit Eurozone Retail PMI is never a market moving number and rarely a focus but the inflation commentary is what particularly stood out in today’s release. The headline did rise to 52.3 from 50.8 and that is the best level in 3 months (touched 53.2 in June). The top line was good for many retailers but, “Gross margins continued to be affected by rising …

[Read more...] about Inflation comments / ECB, SNB, BoJ

The UoM consumer confidence index for September fell to 95.3 from 96.8 in August and was about in line with the estimate of 95. The components were very mixed as Current Conditions rose 3 pts to the best since November 2000 while Expectations were down by 4.3 pts after jumping by 7.2 pts in August. Looking within saw those expecting Higher Income rose 1 pt after …

[Read more...] about Consumer confidence, spending intentions, hurricanes