Before I get to the details of the 10 yr note auction, I wanted to elaborate on my comments this morning on the rent components within CPI and how they should inflect higher this year along with the aggressive rise in home prices. My friend Barry Knapp posted a great visual on Twitter today that I want to show. Red line being home price increases and in blue the …
Service price moderation offsetting goods price jump
The January CPI rose .3% headline and was flat at the core level. The headline figure was as expected while the core rate was below the estimate of up .2%. Versus last year the headline gain is 1.4%, the same pace as in December. The core rate is higher also by 1.4% vs 1.6% in the month prior. The rise in goods prices is being offset by the slowdown in service …
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Tell us how you really feel
There is sometimes this refreshing ability of former central bankers in speaking their true mind when they are no longer involved where when in the institution they instead mostly drink the Kool Aid of standard central bank mantra believing they could do no wrong and there are no unintended consequences of note of their policies. Former NY Fed President Bill Dudley …
What will now drive some stocks?/NFIB/Other
So with now Tesla taking the Bitcoin plunge, if more companies follow it and MicroStrategy we will be creating a closer connection between Bitcoin and the stock market. Not that we should because with the case of Tesla, its $1.5b position in Bitcoin is a tiny fraction of its $828b market cap but at least from a perception standpoint it could be the case. With …
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Curves, plural
Curves continue to steepen and that is plural because it's happening around the world. Starting in Asia, the Japanese JGB 10 yr yield rose 1 bp to .07%, the highest since March 2020 and the 40 yr is matching the highest since March 2019, also up 1 bp to .71%. The Aussie 10 yr yield jumped by 7.5 bps to 1.27%, the highest since March 2020. Yields also rose in the rest …
Succinct Summation of the Week’s Events – 2/5
Positives 1)The January unemployment rate declined to 6.3% but for good and bad reasons as the household survey said 201k jobs were added while the size of the labor force fell by 406k. The more comprehensive U6 rate dropped by 6 tenths to 11.1%. Of note was the jump in average hours worked to 35 from 34.7 which then mitigates the need to hire if your existing …
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That drop in yields didn’t last
Well, that bounce in Treasuries ended fast. The 10 yr yield is now at 1.18% and the 30 yr is at 1.98%. To highlight the impact of long duration and changes in interest rates, TLT, the 20+ Treasury bond ETF, is down 6.0% in the first 5 weeks of the year as of where its trading right now pre market. With interest coupons so low, that is 4 years of interest income …
Payrolls in January
Payrolls in January grew by 49k, about half the estimate of 105k with the private sector contributing just 6k vs the forecast of 163k. Also of note, the two prior months were revised down by a combined 159k. Keeping the headline number above zero was the hiring in public education. The unemployment rate though dropped to just 6.3% as the household survey said 201k …
What’s another $2 Trillion…
With the Democrats seemingly wanting to go at it alone on spending almost another $2 Trillion after the $900b bill passed a bit more than a month ago and the $3 Trillion spent last year, interest rates continue higher with the 10 yr now at 1.15-.16% and the 30 yr at 1.95%. As no lunch is free when spending this extraordinary amount of money, it seems hard to avoid …
Claims/Productivity/Bond yields
Initial jobless claims fell to 779k from 812k (revised from 847k) and that is 50k less than expected. That is the lowest since late November but the 4 week average was little changed at 848k vs 850k last week. PUA fell to 349k from 404k. Continuing claims totaled 4.59mm vs the estimate of 4.7mm, the lowest since the spike in late March. Continuing PUA, delayed by …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.