The May ISM manufacturing index fell to 52.1 from 52.8 and that was 1 pt less than expected. It’s also the lowest since October 2016, right before the election. New orders did rise 1 pt m/o/m but only after falling by 5.7 pts last month to the lowest since December. Also, only 12 industries saw an increase in new orders vs 14 in April. Backlogs, a precursor to future …
We now have a Wikipedia page for it/Data/Gold/Greece
For better or worse, you know you've made it in some fashion when you get your own Wikipedia page. Trump Tariffs now has a page, https://en.wikipedia.org/wiki/Trump_tariffs. With respect China's position paper they released over the weekend, the Art of Compromise is seemingly the only way a deal gets done. On Mexico, I'm hopeful that we won't be so stupid to address a …
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Succinct Summation of the Week’s Events – 5/31
Positives 1) Initial jobless claims totaled 215k, about in line with the forecast of 214k and vs 212k last week (revised up by 1k). The 4 week average is now 217k vs 221k last week as a 230k print drops out. For perspective, the 217k average is about the same as the one year average of 218k. Continuing claims, delayed by a week, fell by 26k to just above the lowest …
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Chicago mfr’g/Confidence & tariffs now in conversation
The Chicago manufacturing May PMI, the last regional survey seen before next week’s ISM numbers, rose to 54.2 from 52.6 and vs 58.7 in the month prior. The estimate was 54. The average year to date is now 57.4 vs 62.4 last year. MNI said “Despite the pick up in sentiment, the survey points to softness in business activity, as indicated by the 3 month average slipping …
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Inflation, spending and income
Not that it matters for markets today but the April PCE inflation stats were about as expected. The headline deflator rose .3% m/o/m led by energy and 1.5% y/o/y while the core rate was higher by .2% m/o/m and 1.6% y/o/y. Cry me a river for the US consumer that PCE is not closer to 2%. Yes, inflation stats are moderating and the Fed won’t be happy with that but the …
Serenity Now
So this is no more about free and fair trade, reciprocity, and protection of technological expertise. Tariffs can be thrown around as an economic bomb for anything now. Global growth rates will only continue to suffer. Sovereign bonds are loving it as the German 10 yr yield falls to a record low of an astonishing -.21%. Netherlands 10 yr is now below zero and the …
Home sales
Pending home sales in April fell 1.5% m/o/m, an unexpected drop relative to the estimate of up .5%. Three of the four regions saw declines with the Midwest the only one seeing an increase. The Northeast, which as you know has been a focus of mine in light of the cap on the SALT deduction, saw the 4th month in the past 5 with declines. Over these 5 months in this …
Some data
Initial jobless claims totaled 215k, about in line with the forecast of 214k and vs 212k last week (revised up by 1k). The 4 week average is now 217k vs 221k last week as a 230k print drops out. For perspective, the 217k average is about the same as the one year average of 218k. Continuing claims, delayed by a week, fell by 26k to just above the lowest in 50 years. …
Sentiment/Modern Monetary Self Evaluation
According to AAII which measures the stock market sentiment of individual investors, Bulls were little changed at 24.8, a hair above the lowest level since mid December. Bears rose 4 pts w/o/w to 40, the most since the first week of January. For the sake of a market bounce, in the short term, this is the type of sentiment you want to see. Keep in mind though that I …
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That was poor
After a great 2 yr auction and a decent 5 yr seen yesterday, today’s 7 yr was really poor. The yield of 2.144% was about 2 bps above the when issued which is a big difference. The bid to cover of 2.30 was below the one year average of 2.53 and the lowest since February 2016. Lastly, dealers got stuck with 30% of the auction, the most since March 2018. What a …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.