With the stock market shrugging off the deteriorating earnings picture, it's quite apparent that the only thing it's focused on is the end of Fed hikes. Yeah, the Fed has a few more to go, but it's clear that there is an assumption that we're close to the end. Thus, Jay Powell day, as it is at each FOMC press conference and speech, will again be a binary event as …
[Read more...] about Powell/RBA/KEY and some comments on CRE/Trade data
Just because it hasn't happened yet, does that mean it won't? The economy has absorbed a lot of interest rate body blows and it won't break. The stock market bottomed in mid October and the fed funds rate will soon be 200 bps higher than it was then and while well off their highs stocks act well for sure this year. Does that mean it's all clear? Well, it's …
[Read more...] about Just because it hasn’t happened yet, does that mean it won’t?
Succinct Summation of the Week's Events: Positives, 1)The February ISM services index was little changed m/o/m at 55.1 vs 55.2 in January but that was just above the estimate of 54.5. Industry breadth improved with 13 industries of 18 asked seeing growth vs 10 in January. Four saw a decline in activity vs 8 last month. 2)The S&P …
[Read more...] about Succinct Summation of the Week’s Events
The February ISM services index was little changed m/o/m at 55.1 vs 55.2 in January but that was just above the estimate of 54.5. New orders were higher by 2.2 pts to 62.6 after jumping by about 15 pts in the month before. Backlogs were steady at 52.8 while inventories got back above 50 for the first time since last May at 50.6 Employment was a bright spot, …
On the debate over wage growth, in case you didn't see the news this week, a few days ago Delta's pilots secured a 34% pay increase over a 4 yr time frame. There will be an 18% immediate pay raise retroactive to the beginning of the year which will be followed by a 5% increase next year and then 4% raises in the two years after. In the last deal struck in December …
[Read more...] about Good for employees, not good for profit margins/Other stuff
Initial claims fell by 2k w/o/w to 190k and that was 5k less than expected. The 4 week average is now 193k vs 191k last week. Continuing claims were down by 5k w/o/w to 1.655mm and that is a 4 week low. Bottom line, notwithstanding all the signs of an imminent labor market slowdown, we keep being reminded that at least on the firing side, companies outside of …
[Read more...] about Claims data, another rise in rates/Stock market sentiment
In another sign that moderating business activity is metastasizing, the economic slowdown is now trickling down to law firms. In today's FT, there is an article titled "Law firms squeezed as clients retrench." The first sentence said "Companies are seeking to cut their legal bills as they struggle with rising input costs and interest payments, some of the largest law …
The German 2 yr yield has now risen 28 bps over the past 4 days with today's 5 bp increase coinciding with the higher than expected February CPI print. German CPI rose 1% m/o/m, 3 tenths more than expected and the y/o/y increase was 9.3%, up from 9.2% in January. No wonder the Bundesbank head is talking about speeding up QT in Q3. The 10 yr inflation breakeven is …
[Read more...] about Hotter German CPI=higher rates/US Mfr’g remains in contraction for 4th month
As people still debate what kind of landing the US economy will have, we have to understand that the economic impact of both a higher interest rate environment and one that will remain so for a while, won't be some notable event. Instead the economic slowdown I believe will be a continued slow progression of many moving parts of the economy …
[Read more...] about VC & PE/China’s economic rebound/Other stuff
The S&P CoreLogic US home price index for December rose 5.8% y/o/y which is the 9th month in a row of y/o/y moderation. Looking at m/o/m and home prices are down for a 6th straight month and by .35% in December. Home price gains continue to be driven by those in the sunbelt with Miami, Tampa, Atlanta, Charlotte and Dallas leading the way. On the flip side, San …
[Read more...] about Home prices slowing/US mfr’g in recession, still/Confidence faltering
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor. Each day The Boock Report provides summaries and commentary on the macro data and news that matter, with analysis of what it all means and how it fits together.
