After the Good Friday influenced rise last week in initial jobless claims to 242k, they fell back to 233k this week, though 3k more than expected. The 4 week average did tick up to 230k from 228k. Continuing claims, delayed by a week, rose by 53k after dropping by 58k in the week prior. Notwithstanding the uptick, the bottom line remains the same bottom line as the …
Other inflation gauges seen
It wasn't just the BLS inflation report that came out yesterday. The NY Fed's Underlying Inflation Gauge for March in its "full data set" increased to 3.14% from 3.07% in February. It's the 10th straight month of an increase in the y/o/y gains. It's also now above 3% for the 3rd straight month and running at the quickest pace since July 2006. The "prices only" measure …
And the minutes say…
To save you time, I’ll get right to the point of the cacophony that always is the FOMC minutes. “Almost all participants agreed that it remained appropriate to follow a gradual approach to raising the target range for the federal funds rate.” What followed though was interesting fodder in the debate over whether we’ll get 2 or 3 more rate hikes this year: “A number of …
Another mediocre auction
Following yesterday’s mediocre 3 yr note auction, today’s 10 yr was as well. The yield of 2.795%, a touch above the when issued pricing level of 2.79%. The bid to cover of 2.46 was about where the one year average of 2.44 was. Also of note, dealers were left with 38% of the auction, the most since September and higher than the 12 month average of 30%. Again, around …
Inflation
The March headline CPI fell .1% m/o/m vs the estimate of no change but the core rate was as expected, up .2% m/o/m. Due to rounding, the y/o/y headline gain of 2.4% was as forecasted as was the 2.1% core y/o/y increase. The headline increase is the most since February 2017 and the core rate gain is as well. Rent and medical care continue to drive the persistent …
Sentiment/Some Data
As the market choppiness and outsized moves becomes a daily occurrence, it slowly is chipping away at the bullish sentiment as measured by Investors Intelligence. Bulls fell to 42.2 from 47.6 last week and that is the lowest number of Bulls since right before the US presidential election in November 2016. Again though, most of the shift out of the Bull side has gone …
Where are the buyers?
The 3 yr note auction joins the list of other mediocre Treasury auctions seen over the past month. The yield of 2.45% was a hair above the pricing in the when issued market. The bid to cover of 2.85 was slightly below the 12 month average of 2.91. And, dealers got stuck with 41% of the auction, above the one year average of 37%. Bottom line, the highest 3 yr yield …
A chart
I should have included this chart earlier, it is of core PPI now running up 2.7% y/o/y in March, the highest since 2011. This said, the market will be focusing more so on CPI tomorrow as inflation breakevens are only up slightly today in response to PPI. …
PPI
The March PPI rose .3% headline m/o/m, more than the estimate of up .1%. The core rate was also up by .3%, one tenth more than expected. The y/o/y headline gain is 3% from 2.8% and core rate increase was 2.7% vs 2.5% in February. If we also take out trade, PPI was up by .4% m/o/m and 2.9% y/o/y. I keep talking about higher transportation costs as a key factor in …
President Xi says the right things
The S&P futures rallied hand in hand with Chinese President Xi's speech last night as we heard almost exactly what we wanted to hear. "This year, we will considerably reduce auto import tariffs, and at the same time reduce import tariffs on some other products." Currently China has a 25% tax on US auto imports (we have a 2.5% tax in imports) which ironically …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.