As expected and part of the trade deal, the Chinese are following the US move of cutting the tariff rate in half on some imports by doing the same on our exports to them. While this was part of the deal, it's not all out of the goodness of the Chinese heart as its reducing import tariffs on crude oil, soybeans, pork, beef and chicken. Everything they desperately need. …
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ISM Services
The January ISM services index was a touch above expectations at 55.5 vs the estimate of 55.1 and up from 54.9 in December. The internals though were mixed. New orders rose .9 pts to 56.2 but backlogs fell by 2 pts to 45.5 and that is the weakest since July 2012. Employment moderated by 1.7 pts to 53.1 and that is the lowest since September. Of note, only 6 of 18 …
ADP jobs, big upside helped by mild winter
The consensus estimate for ADP’s January private sector payroll growth was about half right. The print was 291k vs the consensus of 157k. ADP is saying the “mild winter weather provided a significant boost to the January employment gain” particularly helping construction and leisure/hospitality where construction added 47k (the most since January 2019) …
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Sentiment and a bunch of data
Capturing the stock market selloff on Friday but not the rebound since where as of today's opening it will be like the spread of the coronavirus never happened, Investors Intelligence said Bulls fell to 47.6 from 52.8 last week and vs 59.4 in the week before. That is the least since early October. Almost all went to the Correction side as Bears were up only slightly …
Quantifying the intensity of the TSLA move
Quantifying the intensity of this incredible move in Tesla, the 7 day Relative Strength Index is at 97 (out of 100). I don’t believe I’ve ever seen any stock get this high in its RSI. I looked at Qualcomm in 1999 and the highest its RSI got then was 90 as it went parabolic. I have zero position and am just an amazed spectator in this name. …
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Never boring
Nevermind. A 1.3% rally in the Shanghai comp after a 7.7% drop on Monday is seemingly enough to forget about the S&P 500 decline on Friday. I agree that whatever disruption this virus spread brings, the impact is temporary and will mostly go away in a few months but I can't ignore what the yield curve is saying in terms of its belief on the trajectory of growth. I …
ISM mfr’g (and Markit), what was trade deal bump, sustainable and virus influence?
The January ISM manufacturing index got back above 50 at 50.9, up from 47.8 in December and that was better than the estimate of 48.5. New orders also got back above 50 for the first time since July, rising to 52 from 47.6. Backlogs remained punk at 45.7 but that is up 2.4 pts from December. Inventories remained below 50 for the 8th straight month, down .4 pts …
WHO and CDC now more important than ISM and GDP
My friend Jon Basile, the head of Global Macro at AIG, said it well last week. "WHO and CDC are more important acronyms now for markets than ISM and GDP." 'Now' is also a key word here because this will pass but with the obvious unknown of how much business and lives are lost until then. We do by the way see the January ISM today and it might just capture some of the …
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Chicago mfr’g not pretty/Consumer Confidence ebullient
After the mixed bag seen in the regional manufacturing indices, the January Chicago index was the worst of them all coming in at 42.9, 6 pts less than expected and the weakest since December 2015. This brings the 3 month average to 45.9 vs the 50 breakeven level. So no trade deal enthusiasm here as new orders fell 6.1 pts to 41.5 while production fell to the …
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A few things
As each day passes, the virus spreads further and more activities are postponed, we can just about throw out every single economic data point for the next few months and just expect a big Q2 bounce back on the belief it flames out come Spring time. We'll still talk about the data though because we can see at what level things will get impacted from. China reported …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.