Initial jobless claims totaled 211k, 9k less than expected and last week was revised down by 5k to 216k (as part of annual revisions). This downtick brings the 4 week average lower to 217k from 221k last week and that’s the lowest since mid January. Delayed by a week, continuing claims rose 13k after a similar drop in the week prior. Bottom line, as long as we keep …
China/EM/NIRP
As Mnuchin and Lighthizer are now in Beijing to further work on a deal with China, Reuters is reporting that it's still unlikely that all the tariffs will go away. They are quoting a US official as saying "Some tariffs will stay. There's going to be some give on that, but we're not going to get rid of all the tariffs. We can't." As it seems the market has priced in 'a …
Mario’s coming around?/Yields/Sentiment/Other
Mario Draghi might be finally listening to me but grudgingly and not fully understanding. He said today in Frankfurt, "If necessary, we need to reflect on possible measures that can preserve the favorable implications of negative rates for the economy, while mitigating the side effects, if any. That said, low bank profitability is not an inevitable consequence of …
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2 yr auction correction
Correction in bold, Bottom line, counter intuitively the lowest 2 yr yield in a year brought out buying but in light of the worries that yield curve inversion creates, the bid for short term notes becomes obvious, especially with rising odds of a Fed rate CUT this year. …
2 yr auction pretty good
The 2 yr note auction was pretty good. Positively, the yield of 2.261% was about 1 bp below the when issued. Also, direct and indirect bidders took about 70% of the auction vs the 12 month average of about 60%. The only fly was the bid to cover of 2.60 which was below the one year average of 2.67. Bottom line, counter intuitively the lowest 2 yr yield in a year …
Home prices & Confidence &Mfr’g oh my
Fortunately for those looking to buy a home, particularly that first time Millennial, the pace of home price gains continues to slow. The S&P CoreLogic Case Shiller 20 city index for January saw a y/o/y growth rate of 3.6%, the slowest since September 2012. The average over the past 3 years was 5.6% per annum gains. Las Vegas and Phoenix saw the quickest gains …
Housing starts, single vs multi
February housing starts totaled 1.162mm annualized, 48k less than expected but January was revised up by a similar amount to 1.273mm. The internals though are most important because single family starts fell to 805k, the least since May 2017. Smoothing out the winter influence and holiday season puts the 3 month average at 863k for single family starts vs the 6 month …
Inversion history matters but…
I know so many are pulling out the results of their data mining on what happens after the yield curve inverts. Does a recession follow? When does it not? If it does, when? What do stocks do after? I get it, historical context but what's the historical context for 10 years of ZIRP, NIRP and massive QE? There isn't much and why also so many other seasonal historical …
Serenity Now
I've never once mentioned the name Robert Mueller and his investigation in reference to influencing market movements, sentiment, economic data and earnings because there was none and I won't start now because its resolution won't matter either. As I always do, I'll be watching the Treasury auctions closely this week in light of the new inversions seen last week. We …
Succinct Summation of the Week’s Events – 3/22
Positives 1) Initial jobless claims totaled 221k, 4k less than expected and down from 230k last week (revised up by 1k). This brings the 4 week average to 225k, up 1k because a 217k print falls out of the average. Continuing claims, delayed by a week, fell by 27k after rising by 19k last week. 2) The March Philly manufacturing index rose to 13.7 after going …
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Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.