Like I've said in the past, I wish the 10 yr Treasury yield could speak to us and say what they're thinking about the growth story because the yield just sits there and does nothing in light of this trade deal. On December 11th, the day before the deal was announced the 10 yr yield was at 1.79%. The next day upon the news, it jumped 10 bps to 1.89%. Today it's at …
Cass Freight update
Let’s hope this Phase One deal, which I applaud the progress made on IP protection and glad the American farmer can get its once biggest customer back, alters the mood of global business because Cass Freight just announced their December shipments data and it fell 7.9% y/o/y, “the steepest decline since the Great Recession of 2008-2009.” I will give this a partial …
NY mfr’g still barely above zero/PPI
The January NY manufacturing index, the first January industrial figure seen, was little changed at 4.8 from a revised 3.3 in December (from 3.5). That is a touch better than the estimate of 3.6. After averaging 19.8 in 2018, manufacturing in this region has been barely in expansion since last Spring. New orders rose to 6.6 from 1.7 while backlogs were …
Sentiment/Retail Sales/UK, BoE/Germany
Along with the persistence rally in stocks, Investors Intelligence said bullish sentiment rose on the week with Bulls rising to 57 from 55.1 while Bears remained unchanged at 17.8. The spread is just shy of the extreme read of 40. The uber extreme on the Bull side is when it gets above 60 and Bears get around 15. Bottom line, sentiment is very bullish as measured by a …
Car prices vs what CPI says they are
Last week Edmonds.com said the average price of a new vehicle sold in 2019 was $37,183, a new record high and up 30% from where it was 10 years ago. Within today’s CPI, the price of a new car reflected a 2% increase in TOTAL since 2009. This is magically done via hedonic adjustments which discount the value of new add ons with each subsequent iteration of …
Core CPI with 2 handle for 22nd straight month
Both headline and core CPI rose one tenth less than expected, higher by .2% and .1% m/o/m respectively. The headline number though rose to 2.3% y/o/y from 2.1% and the core rate held at 2.3% y/o/y which was as expected due to rounding. Again, services inflation is being mitigated by the lack of goods inflation. Services inflation ex energy rose .2% m/o/m and 3% …
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The NFIB small business optimism index for December slipped 2 pts m/o/m to 102.7 after rising by 2.3 pts last month. It's just below the monthly average in 2019 of 103, down from 106.7 in 2018 and vs 104.9 in 2017. Digging underneath saw Plans to hire falling by 2 pts to 19 but that is in line with the 6 month average. Job openings fell 5 pts after gaining 4 pts last …
German 10 yr bund yield
I’ve previously stated that one of my big focuses this year was the direction of European bond yields, particularly after the Riksbank in Sweden decided to finally get out of negative interest rate policy, as that would have a big influence on the direction of US yields and eventually corporate yields and credit spreads. Also, where Japanese longer term rates …
C&I loans are going the wrong way/Time Stands Still
It's a good thing we get earnings this week from Citi, JPM, Wells Fargo, BoA, PNC, and US Bank to name a few because for the week ended January 1st seen this past Friday, commercial and industrial loans outstanding fell to the lowest level since March. These are seasonally adjusted so we can't just dismiss because of the holidays. What's going on here? Didn't the Fed …
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Succinct Summation of the Week’s Events – 1/10
Positives 1)At least for now, the tension between the US and Iran took a dramatic step lower and WTI oil prices are back below $60. 2)We finally have a Fed member in Dallas President Robert Kaplan that is vocal that the dramatic rise in the Fed’s balance sheet since September doesn’t happen in a vacuum and is fully aware of the impact on financial assets …
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Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.