After buying in March for just the 2nd time in 14 months, foreigners again were back to selling US Treasury notes and bonds in April. A net $22.5b was sold bringing the year to date total to $18.8b of selling which follows $326b sold in 2016 and $20.3b in 2015. China again was a seller of notes and bonds totaling $3.4b but more than offset that by buying T-bills which …
Builder confidence moderates slightly
The NAHB home builder confidence survey in June was 67, down from 69 in May (revised from 70) and 3 pts below the estimate. All three components fell m/o/m by 2 pts with Prospective Buyers Traffic in particular back below 50 at 49 after 3 months above it. Bottom line, notwithstanding the drop in confidence m/o/m it still remains at a good level (relatively …
Industrial Production, Autos a Drag
United States Industrial production in May was unchanged m/o/m, two tenths less than expected. Most noteworthy however was the .4% drop in manufacturing, well worse than the estimate of up .1% because of a 2% drop in the production of vehicles/parts. This are is still up 4.5% y/o/y which points to the likelihood of more auto production weakness ahead. GM said as much …
Manufacturing and prices
United States Initial jobless claims totaled 237k, 4k less than expected and down from 245k last week. As a 233k print fell out of the 4 week average, it rose by 1k to 243k. Continuing claims, delayed by a week, was up by 6k. Bottom line, the pace of firing’s remain modest for reasons stated here many times. After falling into contraction in May, the NY …
The day after / BoE inches closer to rate hike
Central Banks After sticking to their guns in telling markets that we will most likely get another rate hike this year (belief in the Phillips Curve is still alive), “relatively soon” is the next question to answer as to when quantitative tightening will begin. Janet Yellen gave us that semi-guidance in the press conference and it sounds like something that happens …
[Read more...] about The day after / BoE inches closer to rate hike
Podcast 6/14/17 – The FOMC and a Look Ahead
In the first installment of what will become a regular feature on The Boock Report, today's podcast looks at today's FOMC decision, what got us here (ZIRP) and the rate of change of interest rates versus a fairly soft economy. I also discuss what it means for various asset classes, particularly equity valuations. I also preview the upcoming BOE decisions. LISTEN: …
[Read more...] about Podcast 6/14/17 – The FOMC and a Look Ahead
FOMC: What a tough spot to be in
Most noteworthy in the statement was a new discussion on the desire to implement QT this year. In the FOMC statement they said they expect “to begin implementing a balance sheet normalization program this year, provided that the economy evolves broadly as anticipated.” Data dependent, right? There was an addendum note on how they will conduct this. The monthly cap on …
Retail sales remain mediocre / CPI moderates / Curve flattens further
United States Core retail sales were flat m/o/m in May which was 3 tenths below expectations but April was revised up by 4 tenths so we can call it a push relative to the estimates. Sales ex auto’s and gasoline were also unchanged m/o/m vs the estimate too of up 3 tenths but April was revised up by two tenths. Not surprisingly, auto sales fell for the 4th month in …
[Read more...] about Retail sales remain mediocre / CPI moderates / Curve flattens further
Two charts / China’s new normal? / Falling backwards in the UK
United States Ahead of another Fed rate hike today, I’m including two charts. One is of the yield curve and specifically the 2s/10s spread and this goes back to mid 2013. As you can see it was December 31st, 2013 when the spread at 265 bps begin its long journey lower as that was 4 weeks before the tapering of QE3 began. The Fed then started its rate hike cycle on …
[Read more...] about Two charts / China’s new normal? / Falling backwards in the UK
PPI Flat
United States PPI in May was flat m/o/m as expected after rising by .5% in April. The core rate jumped .3% after a .4% rise in April and that was 2 tenths more than expected. Looking y/o/y puts headline PPI up by 2.4% and the core rate higher by 2.1%. That core rate matches a 5 yr high. The story remains the same in that we have goods deflation and services …
Peter is the Chief Market Analyst with The Lindsey Group. He is Co-CIO at Bookmark Advisors, a member of the Advisory Services Network and a regular CNBC Contributor.