If all we have are rate cuts from an already very low level, QE and payroll tax cuts which are mostly saved not spent because they are viewed as temporary, then the policy response cupboard is bare, it is exhausted. I believe the greatest stimulus plan that could be announced in response to a slowing economy would be getting rid of the tariffs, all of them. Challenge …
Rosengren sounds like a dissent again, maybe
Voting Fed member Eric Rosengren in an interview on Bloomberg still doesn’t sound like someone who wants to cut rates. He acknowledged the weakness in fixed investment, manufacturing and trade, especially in light of the trade fight but seems confident that the US consumer has been and will be enough to offset this. That said, he’s paying close attention to the US …
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Good Monday
No issues in yesterday's Hong Kong protests that was mostly calm helped to lift the Hang Seng by 2.2%. Peaceful protests are likely now very much on purpose because it would make it even less likely that China rolls in which they know would be a disaster for Hong Kong. The rest of Asia was green as well. With respect to China and the fight we have with them, we …
Succinct Summation of the Week’s Events – 8/16
Positives 1)The Administration realized that since most of the goods that will be sold in the holiday shopping season have already been ordered with pricing in place, US importers were going eat about all of the intended tariffs. Hence, shifting about $165b of the affected to mid December. 2)July retail sales at the core level (ex auto's, gasoline and building …
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Jump in bond yields
European bonds are selling off and US Treasuries are in sympathy on the story that hit the tape that German would initiate a deficit spending stimulus plan if they were to go into a recession, reported by Der Spiegel. The German 10 yr yield is up 5 bps to -.67% and the US 10 yr is at the high of the day at 1.59%, 6 bps above the 2 yr in response. I’ll say for the …
Tariffs and the rate CUT hit confidence (with charts)
The UoM consumer confidence index took a hit in August as it fell to 92.1 from 98.4 and that was below the estimate of 97. It’s also the lowest since January and as seen in the chart below, it’s no higher than it was in late 2014. Most of the decline was in the Expectations component which fell 8.2 pts while current conditions were down by 3.3 pts. The positive …
[Read more...] about Tariffs and the rate CUT hit confidence (with charts)
Tariffs and the rate CUT hit confidence
The UoM consumer confidence index took a hit in August as it fell to 92.1 from 98.4 and that was below the estimate of 97. It’s also the lowest since January and as seen in the chart below, it’s no higher than it was in late 2014. Most of the decline was in the Expectations component which fell 8.2 pts while current conditions were down by 3.3 pts. The positive …
[Read more...] about Tariffs and the rate CUT hit confidence
Cass Freight index down again in July
The July Cass Freights shipping index fell 5.9% y/o/y and that now marks the 8th month in a row of declines. That manufacturing weakness was inevitably going to hit the industry that has to take all these goods around. Cass Freight said in its release, “we repeat our message from last two months: the shipments index has gone from ‘warning of a potential slowdown’ to …
Housing starts
Housing starts in July totaled 1.191mm, well less than the estimate of 1.256mm and June was revised lower by 12k to 1.241mm. The m/o/m decline was all in the multi family sector as single family starts did rise by 11k from June. Multi family also mostly drove the permit side but to the upside as they jumped by 89k m/o/m but only after an 80k drop in June. Single …
Just do something
The default reaction of most central bankers is to 'do something.' It's why every time growth slows their natural response is to cut rates irrespective of any discussion whether they think it will work or not. That of course is in now in full swing with just the extent and pace seemingly in question globally. I'm not sure who said or started the conversation on it …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.