The ISM non manufacturing index for August was weak, falling to 51.4 from 55.5 in July and that was well below expectations of 54.9. This is the worst print since February 2010 when it was at 50.8. New orders sunk by 9 pts to just above 50 at 51.4. Backlogs fell back below 50 at 49.5 vs 51 in July. Employment was barely above 50 at 50.7, down .7 pts. Export orders …
8/26 – A Succinct Summation of the Weeks Events
note: I will on vacation next week. Have a great last week of the Summer and I'll see you here afterwards. Positives: Core capital spending orders, defined as non defense capital goods ex aircraft, rebounded in July. They rose 1.6% m/o/m, well more than expectations of up .2% but they still remain deep in contraction on a y/o/y basis, by 7.1%. Initial …
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Yellen Emerges, Sees Her Shadow, 4 More Weeks
In Janet Yellen’s speech titled The Federal Reserve’s Monetary Policy Toolkit (read full text here) she used Jackson Hole as a venue to discuss the near term outlook for the US economy and what it means for monetary policy. She said specifically on policy: “Based on this economic outlook, the FOMC continues to anticipate that gradual increases in the federal funds …
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Peter: 5 yr Auction, Housing. Libor
After yesterday’s improved 2 yr note auction compared with the poor one seen in June, the 5 yr auction was better as well. The yield was below the when issued, the bid to cover was above the one year average and direct and indirect bidders took 75% of the auction vs the previous 12 month average of 66%. Bottom line, the market doesn’t believe the Fed is raising …
New home sales, Markit Manufacturing, Richmond Fed and more…
New home sales in July totaled 654k, well above the estimate of 580k and up from 582k in June. This is the best pace of sales in this recovery and was mostly driven by a 61k home sale increase in the South. The West and Midwest were flat and the Northeast rose by 10k. With the rise in sales, months’ supply fell to 4.3 from 4.9, the lowest since 2013. Fortunately for …
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She’s the one they call Dr. Feelgood?
“She’s the one they call Dr. Feelgood, she’s the one that makes ya feel alright.” I know, Motley Crue is not for everybody and I’ve substituted She for He, but I lay out the lyrics just days before we hear from our monetary Dr who is not just an academic doctorate. Ben Bernanke and Alan Greenspan went to the same med school where markets LOVED the monetary drugs that …
8/19 – A Succinct Summation of the Week’s Events
Positives: Initial jobless claims totaled 262k, 3k less than expected and down 4k from last week. As a print of 252k comes out of the 4 week average, the new average rose to 265k, the most in 6 weeks from 263k but it’s still very low. July CPI was flat headline as expected and rose .1% core which was one tenth less than expected. On a y/o/y basis, prices were …
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Jobless Claims, Philly, BoJ, UK
Initial jobless claims totaled 262k, 3k less than expected and down 4k from last week. As a print of 252k comes out of the 4 week average, the new average rose to 265k, the most in 6 weeks from 263k but it’s still very low. Continuing claims, delayed by a week, rose 15k after a 19k increase last week. It’s quietly at the highest level since late March. Something to …
FOMC Minutes, Sovereign Bond Yields, Retail
Bottom line, some committee members believed the data supported a rate hike. In fact, some “judged that another increase in the federal funds rate was or would soon be warranted, with a couple of them advocating an increase at this meeting.” On the other hand, many judged that it was appropriate to wait for additional information that would allow them to evaluate the …
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Fed Inflation Targets, CPI, Housing Starts, Industrial Production
I posted some commentary over at CNBC.com about the possibility of the Fed raising inflation targets. Here's a taste: I can't let an opportunity go by without criticizing a Fed official. I believe their feet should be held to the fire after creating a huge asset price bubble and culture of debt that is dragging down economic growth. Fed President John Williams …
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Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.