Core retail sales in October rose by 1.6% m/o/m, above the estimate of up .9% partly offset by a 3 tenths downward revision to September to a gain of .5% m/o/m. The headline figure was up 1.7% which compares with a .9% m/o/m increase in headline CPI to illustrate the influence of inflation in retail sales as today’s numbers are nominal measures. Looking under the …
[Read more...] about REAL retail sales are falling/Import prices/Inflation breakevens
Yesterday saw another sharp rise in inflation expectations as measured by the TIPS breakevens. The 5 yr jumped 7 bps to a fresh high of 3.19%. For perspective, since 2002 when this maturity was introduced, it has averaged 1.85%. The 10 yr was up by 4 bps to 2.75% and that is just 3 bps from a record dating back to its beginning in 1998. It has averaged 1.99% since …
[Read more...] about Inflation breakevens jump again/Cass Freight/BoE rate hike clincher
The November NY manufacturing index, the first November industrial number to be released, rose to 30.9 from 19.8 in October and that was better than the estimate of 22 and compares with 34.3 in September. As the internals are always very volatile month to month, I’ll again compare the November data with the 6 month averages. New orders 28.8 vs 25.2, backlogs 12.7 vs …
[Read more...] about NY Mfr’g with a lot of balls in the air
So maybe the 1970's comparison is a good one, //www.youtube.com/watch?v=6VhRT10rdTcThanks to challenges with the supply and transportation of goods along with selective Covid restrictions, the Japanese economy contracted at a 3% q/o/q annualized rate in Q3. The estimate was for a decline of .7%. As we're fully aware of the factors behind the fall in growth, …
Positives 1)Initial jobless claims fell to a fresh post Covid low at 267k and lower w/o/w for the 6th straight week. That though was 7k more than expected. 2)The 8 bps drop in mortgage rates and 14 bps over the past 2 weeks helped to lift mortgage applications. Purchases rose 2.7% w/o/w but remain down by 4.1% y/o/y on tough comps and a moderating pace of …
[Read more...] about Succinct Summation of the Week’s Events – 11/12
Consumer confidence as measured by the UoM in November fell again and is down to 66.8 from 71.7 in October and below the estimate of 72.5. It’s also at the weakest level since November 2011. Blame it on inflation and falling REAL wages as one year inflation expectations rose another tenth to 4.9%, the highest since July 2008 thanks in part to a 10 pt rise in the price …
[Read more...] about Inflation is here and now and consumers don’t like it
My friends at Quill Intelligence included a great quote in their weekly piece yesterday that is perfectly suited to the dilemma the Federal Reserve and current fiscal authorities in Congress face however self imposed, and it comes from Alden Clausen in 1974 who was president and CEO of Bank of America. "We might as well be realistic. No government anywhere is going to …
A shout out to my readers who are Veterans. Thank you. The Treasury market gets some rest today with the MOVE index yesterday closing to match the highest level since April 1st 2020. With inflation front and center, expect this volatility gauge to break out to the upside. MOVE index I'm going to say again, the Fed's idea of confronting now 6% inflation is …
The 30 yr bond auction was terrible. The yield of 1.94% was well above the when issued pricing of 1.89% and the bid to cover of 2.20 was under the one year average of 2.33. Also, direct and indirect bidders took 75% of the auction, below the 12 month average of 82%, leaving dealers the most since August 2020. Bottom line, bonds are getting further blasted as a …
Going back to the beginning of the introduction of the Treasury inflation protected security in 1997, the 10 yr REAL yield today is falling to a new low at -1.24% with the 10 yr inflation breakeven jumping by 8 bps to 2.72%. 10 yr REAL YIELD …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.
