Today at 10:30am there is a hearing before the House Financial Services Committee titled "Oversight of the Treasury Department's and Federal Reserve's Pandemic Response." If there was any doubt, these two agencies are now hand and glove with the latter financing the profligacy of the former. I believe the key factor in the US dollar weakness this year and the lack of …
Succinct Summation of the Week’s Events
Positives 1)The preliminary September UoM consumer confidence index rose 4.8 pts m/o/m to 78.9 and that was above the estimate of 75. Both Current Conditions and Expectations were higher. One year inflation expectations moderated by 4 tenths to 2.7% but that is still above where it was in February at 2.4%. The internal components were mixed with employment …
[Read more...] about Succinct Summation of the Week’s Events
Sentiment/South Korea/China
Last Monday I said the better way to get a good tradable bottom was to wring out a lot of the uber bullishness that we've seen in some of the sentiment numbers. We're getting there but we're not there yet as seen by last week's II data where Bulls are still above 50, Bears below 20 and with the weekend's Citi Panic/Euphoria index which is cooling but is still more …
Consumer Confidence
The preliminary September UoM consumer confidence index rose 4.8 pts m/o/m to 78.9 and that was above the estimate of 75. Both Current Conditions and Expectations were higher. For perspective, confidence is still about 10 pts below where it was in March when it printed at 89.1 and not surprisingly pre Covid well below where it was in February when it was at 101. One …
Where is George Costanza?
As I disagree with 1)zero interest rate policy, let alone negative, 2)QE, especially in anything not US Treasuries, 3)forward guidance, 4)average inflation targeting, 5)the 2% inflation target, 6)the blowing of financial bubbles that leads to financial instability, 7)the huge debt accumulation that easy money encourages and 8)the complete lack of faith in the …
Claims/Mfr’g/Housing
Initial jobless claims totaled 860k, 10k more than expected but down from 893k last week (revised from 884k). Continuing claims, delayed by a week in its reporting, fell to 12.6mm from 13.5mm last week as we have another week without the extra $600 of benefits which hopefully is encouraging people to take one of the 6mm+ jobs that are available as seen in the July …
Powerful?
Two more things post Powell presser. The Fed Chair said that three years of no rates hikes in their estimates, assuming all else equal, is essentially forward guidance and he expressed his view that this is a "powerful" stimulus. I'll express again my belief that it is actually the exact opposite. The whole point of stimulus is to stimulate economic behavior to happen …
One more thing
What I did not include in the prior email was the Fed’s forecast because they are usual wrong (as most forecasts are) but I should mention it so you can see where the Fed’s thinking is. Interestingly, they cut their 2021 GDP forecast to 4% growth from 5% but they also lowered their unemployment rate to 5.5% from 6.5% and also raised its core PCE estimate to 1.7% from …
And the Fed says…
The main difference between today’s FOMC statement and the last one in July was the elaboration on inflation averaging and what that means for policy. I’ve said many times that average inflation targeting is not new and this symmetry has been mentioned in every statement this year. However today there was more color following the Powell comments virtually at the …
Home builders are giddy
Home builder sentiment got more giddy in September with the NAHB builder survey index rising to 83 from 78 and 5 pts better than expected. Again, measuring direction of the mood rather than the degree, this number is the highest in at least 20 years. All three components saw m/o/m gains. The Present Situation rose 4 pts to 88, the Future Outlook was up by 6 pts to 84 …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.