The Boock Report

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Productivity/Profit margins

Q3 productivity disappointed, falling by .3% q/o/q annualized vs the estimate of up .9%. Versus Q3 last year, productivity still was up 1.4% but a moderation from the 1.8% and 1.7% gains in the prior two quarters. Due to the q/o/q fall in productivity, unit labor costs jumped by 3.6% q/o/q and 3.1% y/o/y. That y/o/y gain follows a 2.6% rise in Q2 and it’s the biggest …

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Sentiment/Rates/Some data

These trade talks are getting even more interesting now that there is talk of the Chinese wanting even more existing tariffs taken off than just those implemented on September 1st. I would love to be a fly on the wall of those oval office deliberations between those that love tariffs and those that don't. Either way, in terms of what's been priced in and not, just …

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ISM & Markit services PMI’s/Job openings fall

The October ISM services index rose to 54.7 from 52.6, which was a 3 yr low, and was 1.2 pts above the estimate of 53.5. For perspective, the average this year is 55.7. New orders rose 1.9 pts to 55.6 but after falling by 7 pts last month. And, only 10 of 18 industries saw an increase vs 12 last month and 15 in August. Backlogs were weak, falling 5.5 pts to back …

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Bullish behavior hits 2 yr high

It was music to my ears when I heard last night the possibility that the administration is considering, upon request of the Chinese, to also roll back the September 1st tariffs on about $110b worth of consumer goods. In return we'll have to see but it would at least further temper the negative economic impact of tariffs and take us back to where we were on July 31st, …

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It looks like Xi is coming to farm country

It's a quiet morning with markets riding on hopes of the initial trade deal becoming signed within weeks where it looks like it will include soybean purchases, currency parameters and the opening up of the Chinese financial industry with no implementation of the December 15th tariffs but we'll still be left with the tariffs on $360b of goods. I've still seen no …

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Maybe this is why

Maybe this is why the 10 yr yield is barely up on the day notwithstanding the good jobs report, after an 8 bps drop yesterday. The NY Fed lowered its Q4 GDP forecast today to just .8% while the Atlanta Fed’s GDPNow just reduced its estimate to 1.1% from 1.8% last week. …

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Succinct Summation of the Week’s Events – 11/1

Positives 1)Payrolls in October grew by 128k, well better than the estimate of 85k and the two prior months were revised up by a net 95k. The unemployment rate ticked up by one tenth to 3.6% but because the size of the labor force grew by 325k, above the increase in the household survey of 241k (with a gain in the key 25-54 age area). The all in rate rose one …

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Payroll upside

Payrolls in October grew by 128k, well better than the estimate of 85k and the two prior months were revised up by a net 95k. The unemployment rate ticked up by one tenth to 3.6% but because the size of the labor force grew by 325k, above the increase in the household survey of 241k (with a gain in the key 25-54 age area). The all in rate rose one tenth too to 7%. …

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Chicago PMI not pretty/Consumer confidence

The October Chicago manufacturing index sank even further to 43.2, the lowest since December 2015 from 47.1 in September. That was well below the estimate of 48 and almost 7 pts below the breakeven of 50. Alarmingly within, new orders fell to 37, the worst print since March 2009 and backlogs are down to just 33.1 from 46.8 in September. This as inventories rose to …

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