There was improvement in the Markit’s June US manufacturing and services PMI but were a bit below expectations. Manufacturing rose to 49.6 from 39.8 while services grew to 46.7 from 37.5. Again, direction not degree is the driver here as things reopen. With this composite index still below 50 at 46.8, it reflects a situation where “the overall pace of decline eased …
Loose lips move markets/Inflation/PMI’s
Tariff fan Peter Navarro put the S&P futures on quite the wild ride last night with his comments at around 7pm est that the China deal was dead only to have Trump in a tweet to walk it back about 3 hours later, "The China Trade Deal is fully intact. Hopefully they will continue to live up to the terms of the Agreement!" The Chinese wasted no time in calling …
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Existing home sales in May
Existing home sales in May, likely reflecting contract signings in January thru April, totaled 3.91mm annualized and that is below the estimate of 4.09mm and down from 4.33mm in April. This is the slowest pace since 2010 but we of course know the main reason. The supply did increase which it always does in the Spring but combined with the lower sales count brought the …
Morning
After going out for dinner Saturday night for the 1st time since late February, I believe this country can reopen safely but not without strict mask wearing. And that is just what the economic pace of the reopening is going to come down to. To my readers I'm just stating the obvious but I felt the need to say it again. Yes, we need a vaccine and effective therapeutics …
Succinct Summation of the Week’s Events – 6/19
Positives 1)The June Philly manufacturing index jumped to 27.5 from -43.1 and that was well better than the forecast of -21.4. As for the 6 month outlook, it rose to 66.3 from 49.7 as optimism grows with the reopening. Capital spending plans also improved. 2)The June NY manufacturing index was well better than expectations at -.2 vs the forecast of -29.6 …
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Europe
Following a rally in Asia, European markets are getting a lift and in turn boosting the S&P futures as today begins talks among EU leaders about their proposed 750b euro spending plan where 500b would be in grants and 250b in loans to EU countries. To finance this, bonds would be issued and then guaranteed by all its members. The vote for this needs to be …
Claims/Philly Mfr’g
Initial jobless claims fell to 1.51mm from a revised 1.57mm last week and that was about 200k more than expected. Notwithstanding the reopening of the economy, continuing claims, delayed by a week in its release, was little changed at 20.54mm vs 20.61mm in the week prior. Bottom line, while initial claims have now fallen for the 11th straight week after the late …
Mood/Central banks
The individual investor got scared over the past week according to the AAII figures. Bulls fell 9.9 pts w/o/w to 24.4, a 5 week low while Bears jumped by 9.7 pts to 47.8, a 5 week high. This is in contrast to the II data which measures the mood of 'professional' investors. I keep thinking that individuals are voting their view of the economy and what they see around …
Sentiment/Housing
According to Investors Intelligence, Bulls moderated by 2 pts to 54.9 but all of that went to the Correction side (those expecting a pullback that they want to buy) as opposed to the Bear side. Bears fell to 18.6 from 20.6 and that is the 12th week in a row of declines. It got as high as 41.7 in March. The spread between Bulls and Bears remains the widest since mid …
A few things
While certainly still not reflecting a full global reopening, Japanese exports in May fell 28.3% y/o/y, more than the estimate of 26.1% and follows the April 22% y/o/y decline which was in the eye of the shutdown storm. Imports fell 26.2% in May vs the forecast of down 20.4%. Again, wait until the July/August data for relevance. The same can be said for all the …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.