The September consumer price index rose .1% both headline and core and that was one tenth less than expected. The y/o/y gains moderated to 2.3% headline from 2.7% in August. The core rate was up 2.2%, the same as in August. Again, core goods deflation of .3% m/o/m and y/o/y kept a lid on the 3% y/o/y rise in the prices of services ex energy. A main factor in the goods …
Another weak one
Following the soft 3 yr auction was a weak 10 yr auction. The yield of 3.225% was also above the when issued. The bid to cover of 2.39 was less than the one year average of 2.52. Also, dealers got left with 30% of the auction vs the 12 month average of 27%, leaving direct and indirect bidders with the rest. Bottom line, demand remains lackluster at these auctions …
Another weak auction
Another Treasury auction and another soft result. The yield of the 3 yr note was 2.989%, a touch above the yield trading in the when issued market just prior. The bid to cover of 2.56 was well below the 12 month average of 2.84. Dealers were left with 43% of the auction, a bit above the one year average of 40%. The highest yield in 11 years again was just not …
PPI about in line
The producer price index for September rose .2% both headline and core as expected and if you also take out trade, it jumped by .4% m/o/m which was twice the estimate. Versus last year, PPI rose 2.6% headline, 2.5% core and 2.9% core ex trade. While the price of energy and food fell m/o/m, goods prices ex this rose .2% and continues a trend of higher wholesale goods …
Sentiment/Housing/Other good stuff
Last Wednesday, Investors Intelligence told us in their survey that the number of respondents expecting a Correction fell to a 6 1/2 year low. Perfect timing because we are down 4 days straight since then, modestly of course but you get the point. It typically pays to fade extreme confidence in markets and how the mood shifted this past week. Those expecting a …
Wages, yields
The NFIB small business optimism index for September moderated to 107.9 from 108.8 and which was the record high. Higher wages continued as current compensation plans rose to a record, up by 5 pts to 37%. Future plans were up by 3 pts to match the most since 1989. This was driven by Positions Not Able To Fill which held at the highest level since 1973. Plans To Hire …
China/Italy/Other
About 1/3 of the 100 bps PBOC's 1.2 trillion yuan reserve requirement cut is going to be used to pay off medium term lending facilities that are outstanding and coming due with the balance likely used to cushion the impact of the tariffs and slowing growth that was happening anyway. The PBOC said it would "maintain reasonably ample liquidity to drive the reasonable …
Succinct Summation of the Week’s Events – 10/5
Positives 1) September hiring totaled 134k, 50k less than expected but that was completely offset and then some by the 87k person upward revision to the two previous months. After shedding 423k jobs in the household survey in August, 420k were added back in September. As that rose above the 150k increase in the size of the labor force, the unemployment rate fell 2 …
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Payrolls/Wages
September hiring totaled 134k, 50k less than expected but that was completely offset and then some by the 87k person upward revision to the two previous months. After shedding 423k jobs in the household survey in August, 420k were added back in September. As that rose above the 150k increase in the size of the labor force, the unemployment rate fell 2 tenths to just …
Even in Japan…
Employee wages are rising at a quickened pace in the US, they are gaining steam in Europe and they are also increasing at a faster rate in Japan. In August in Japan, regular base pay grew by 1.4% y/o/y. That is the best rate since 1997 and they rose by 2.8% for part time workers. It is about time, especially considering how drum tight their labor market is and this is …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.