Chinese markets continue their slow bleed. The Shanghai comp closed at its lowest level in almost two months (and still down almost 50% from its 2007 bubble peak). Year to date it’s lower by 12%. The H share index ended the day down 1% and is lower by 4% year to date. Tightening credit, higher US interest rates and the weaker yuan, home buying restrictions, and wealth …
[Read more...] about Shanghai Comp’s Slow Bleed, BoJ, UK and more…
Markit’s measure of the US services sector saw its December index fall by 1.2 pts m/o/m to 53.4. It touched a one year high at 54.8 in October and averaged 55.9 in 2015. The internals were mixed as new orders fell slightly but employment rose for a 3rd straight month and there was “a stronger degree of optimism about the year ahead business outlook.” This did come …
[Read more...] about US Services, FOMC Balance Sheet, Overseas News
Positives The November NFIB small business optimism index rose to 98.4 from 94.9 in October. “Before election day small business owners’ optimism was flat, and after election day it soared” said the NFIB. That is the best level since December 2014. The NFIB also said “federal taxes, regulations, and Obamacare are the three biggest impediments to running a small …
[Read more...] about 12/16 – Succinct Summation of the Week’s Events
The pace of foreign selling of US Treasuries continued in October at a sharp pace. Foreigners sold a net $63.5b of notes and bonds and brings the year to date amount of liquidation to $321b. China continued its selling, by $25.7b and brings the last 5 months of selling to $109b. We know the reasons. Japan continued its selling too, by another $16.1b but they are now …
[Read more...] about US Treasuries: Foreign selling continues
The November CPI rose by .2% m/o/m both headline and core and rose by 1.7% and 2.1% y/o/y. That headline rate matches the quickest pace since July 2014 and I expect it to be above 2% by early next year on base effects. Energy prices are now rising y/o/y and were up for a 3rd straight month, m/o/m. Food prices were flat vs October and are down .4% vs last year. Rents …
[Read more...] about November CPI, Initial Jobless Claims, The Boy Who Cried Rate and more…
The portion of the FOMC statement on the economy isn’t that much different than the one released in November. They reaffirmed the continued improvement in the labor market. They did acknowledge the rise in inflation expectations within the TIPS market by saying they “moved up considerably but still are low.” Considering that the 10 yr expectation is at the Fed’s …
[Read more...] about If something changed on November 8th, the Fed didn’t see it
Retail sales in November grew by .2% m/o/m ex gasoline stations and auto’s. That was two tenths below the estimate and October was revised down by one tenth. Getting to the so called ‘control group’ which also takes out building materials saw a gain of just .1%, also two tenths below the forecast and October was also revised lower. Online retailing was up just .1% …
[Read more...] about Retail Sales, FOMC, Trade Wars, Inflation and more…
A new political regime took hold on November 8th and tomorrow we’ll see if there is any acknowledgement of that from the FOMC and whether we’re about to embark on a new monetary regime. I would define ‘new monetary regime’ as anything more aggressive than the pace of one rate hike per year. I’ve argued that a new market driven interest rate regime (end of the bond …
[Read more...] about FOMC, 30 Year Bond Auction, Biz Confidence, China, Europe and more
The upward lurch higher in the cost of capital continues. The US 10 yr yield today broke above its 2015 closing high and sits near a level last seen in September 2014 near the round number of 2.50%. The US 5 yr yield is at the highest level since May 2011 near 1.90%. Let’s blame the $2+ move higher in crude oil this morning (and up almost 50% y/o/y). Crude oil settled …
[Read more...] about The cost of capital continues its move higher
Positives The UoM consumer confidence index rose to 98 from 93.8 in November. The estimate was 94.5 and this is the best level since January 2015 which is just .1 pts from the highest since 2004. The UoM said “the surge was largely due to consumers’ initial reactions to Trump’s surprise victory.” Both current conditions and expectations were higher and 1 yr …
[Read more...] about 12/9 – Succinct Summation of the Week’s Events
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor. Each day The Boock Report provides summaries and commentary on the macro data and news that matter, with analysis of what it all means and how it fits together.
