The November CPI rose by .2% m/o/m both headline and core and rose by 1.7% and 2.1% y/o/y. That headline rate matches the quickest pace since July 2014 and I expect it to be above 2% by early next year on base effects. Energy prices are now rising y/o/y and were up for a 3rd straight month, m/o/m. Food prices were flat vs October and are down .4% vs last year. Rents …
[Read more...] about November CPI, Initial Jobless Claims, The Boy Who Cried Rate and more…
The portion of the FOMC statement on the economy isn’t that much different than the one released in November. They reaffirmed the continued improvement in the labor market. They did acknowledge the rise in inflation expectations within the TIPS market by saying they “moved up considerably but still are low.” Considering that the 10 yr expectation is at the Fed’s …
[Read more...] about If something changed on November 8th, the Fed didn’t see it
Retail sales in November grew by .2% m/o/m ex gasoline stations and auto’s. That was two tenths below the estimate and October was revised down by one tenth. Getting to the so called ‘control group’ which also takes out building materials saw a gain of just .1%, also two tenths below the forecast and October was also revised lower. Online retailing was up just .1% …
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A new political regime took hold on November 8th and tomorrow we’ll see if there is any acknowledgement of that from the FOMC and whether we’re about to embark on a new monetary regime. I would define ‘new monetary regime’ as anything more aggressive than the pace of one rate hike per year. I’ve argued that a new market driven interest rate regime (end of the bond …
[Read more...] about FOMC, 30 Year Bond Auction, Biz Confidence, China, Europe and more
The upward lurch higher in the cost of capital continues. The US 10 yr yield today broke above its 2015 closing high and sits near a level last seen in September 2014 near the round number of 2.50%. The US 5 yr yield is at the highest level since May 2011 near 1.90%. Let’s blame the $2+ move higher in crude oil this morning (and up almost 50% y/o/y). Crude oil settled …
[Read more...] about The cost of capital continues its move higher
Positives The UoM consumer confidence index rose to 98 from 93.8 in November. The estimate was 94.5 and this is the best level since January 2015 which is just .1 pts from the highest since 2004. The UoM said “the surge was largely due to consumers’ initial reactions to Trump’s surprise victory.” Both current conditions and expectations were higher and 1 yr …
[Read more...] about 12/9 – Succinct Summation of the Week’s Events
Initial jobless claims fell 10k w/o/w to 258k which brings the 4 week average to 253k from 252k last week as a 254k print drops out of average. Continuing claims fell by 79k to just off the lowest since 2000. Bottom line, the story remains the same in that the pace of firing’s remains modest. The ECB taper has begun, maybe, maybe not? They will extend QE until …
[Read more...] about Jobless Claims, Draghi, Fear And Gree and more…
While somewhat dated both in terms of timing and being pre election, the number of job openings in October totaled 5.53mm, about in line with the estimate of 5.5mm and vs 5.63mm in September (revised from 5.49mm). While the jobs hiring rate remained unchanged at 3.5%, the absolute number of hirings fell to the lowest pace since May. Reflecting the very low level of …
[Read more...] about Job Openings, VIX & Bulls, China Italy and more…
A day after Japanese consumer confidence reflected essentially no improvement since Abenomics took hold 4 years ago, base earnings in October in Japan grew by just .3% y/o/y vs .2% in September and .3% in August. This was almost all offset by a 1.4% drop in overtime and .5% decline in bonus’. This continues to be a big disappointment in that a tight labor market is …
The ISM services index for November rose 2.4 pts to 57.2 and that was above the estimate of 55.5. The post election enthusiasm has this index at the best level since October 2015 (the peak in 2015 was 59.6 back in July of that year). Notwithstanding the headline improvement, the internals were more mixed. New orders fell .7 pts to 57 and is back below the 6 month …
[Read more...] about ISM, Italian Referendum, @SmootHawley, Commodities and more…
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.
