What we heard last night was borrow, spend and fair share. With the latter otherwise known as higher taxes. Tha latter is not a surprise as we were told by the Biden side that it was coming but it is still a drag on growth however which way one wants to rationalize it. The borrow part has proven a legacy that lasts forever and the spend is fleeting as it eventually …
Trout, Gretzky, now Mantle
Last month I highlighted the $1.3mm auction price sale of Wayne Gretzky’s rookie card as growing evidence for the desire for ‘hard assets’ (yes, it’s cardboard), along as we see with bitcoin, metals, etc… Today I see that a PSA 9 (10 is gem mint) 1952 Mickey Mantle Topps card was just sold for $5.2mm (h/t JB). The same card went for $2.8mm in 2018 and $283k in …
Claims/Import prices
Initial jobless claims totaled 965k, well above the estimate of 789k and up from 784k last week. Initial claims for PUA rebounded to 284k from 161k last week and vs 310k in the week before. I can only guess that with the extended and expanded benefit payments with the passage of the recent $900b spending bill, many took advantage of it. When the federal government …
Sentiment/China data and its voracious appetite for commodities
Investors Intelligence yesterday said Bulls rose to 63.7 from 60.2 and continues its run of 60+ prints. Bears fell to 16.7 from 17.5 and that 47 pt spread remains extreme. The AAII data is in error as it lists Bulls as being 100% which would be quite extraordinary if true, //www.aaii.com/sentimentsurvey? but it's a mistake. Bottom line, we know sentiment is very …
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Beige Book comments on inflation and wages
On my belief that the direction of inflation might be the most important factor in determining where the prices of stocks and bonds go from here, I include comments on prices and wages in the just released Beige Book. I want to add that inflation/deflation is a process, not an event and that either direction takes time to unfold. While price pressures are …
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Another good auction
The 30 yr bond auction was very good too after the solid 10 yr yesterday. The yield of 1.825% was about 1.5 bps below the when issued. The bid to cover of 2.47 is above the 12 month average of 2.36. And, direct and indirect bidders bought 86% of the offering, above the one year average of 79%. Bottom line, the highest yield since late February brought out the …
Consumer price data
Headline CPI in December rose .4% m/o/m and the core rate was higher by .1% m/o/m. Both are exactly in line with expectations. The headline rate is now up 1.4% y/o/y and 1.6% ex food and energy. The core rate is unchanged with November and the headline increase compares with 1.2% in November. The rise in energy prices is beginning to show up in the data as they rose …
Commodity prices and bond yields
I'm going to mention commodities again ahead of the December CPI report at 8:30am est. The CRB raw industrials index yesterday rose for the 12th day in 13 and is just a hair below the highest level since August 2014. Also, if you didn't see the move in ag the past few days, corn rallied 5.1% yesterday after crop data was released and showed a 7 yr low in inventories …
10 yr auction very good/Inflation comments
With an incredible 26 bps rise in 6 trading days, the 10 yr note auction was very good as the higher yield likely brought out some buyers. The yield of 1.164% was almost 1 bp below the when issued. The bid to cover of 2.47 was a touch above the one year average of 2.44. Also, direct and indirect bidders took down 80% of the auction, higher than the 12 month average of …
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When does rise in rates matter?
I've gotten a lot of questions over the past few weeks asking at what point does the rise in long rates matter (a lot of other questions on Bitcoin). When do they matter for stocks that have been inflated by very low rates and when do they matter for the Fed that would get them to react? As for the former, I'm not sure at what magic level multiples start to compress …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.