So waking up now entails looking first at where the yuan is, followed by where the 10 yr US yield is at and then one can predict where the S&P futures are. Yes, the yuan is up and the 10 yr yield is unchanged after yesterday's sharp reversal and the futures are rallying, along with overseas markets. At 9pm the yuan initially sold off after the fixing was above 7 …
European bank stocks
This is a chart of the Euro STOXX bank stock index, one that I’ve been showing you for a while to highlight the damage being done from negative interest rates. As seen we are the cusp of breaking to new lows with its 1.6% decline today and lower by 7% in the past 4 days. And how does one have a functioning economy when this is what happens to your banking system? Will …
The drop in yields is getting scary
After a 1.5% m/o/m decline in the June German industrial production figure vs the estimate of down .5% with declines widespread in manufacturing, mining, intermediate goods, capital goods, consumer goods and energy, German bund yields are sinking again and taking yields across the region with it. The y/o/y decline in IP of 5.2% is the 10th month in the past 11 and is …
Job openings #
The number of job openings in June totaled 7.348mm which is down slightly from the 7.384mm seen in May but about 20k more than expected. It’s about in line with the average seen so far this year of 7.391mm. The number of hiring’s though did fall for a 2nd month and the number of people quitting also was down but the rate for each was unchanged m/o/m. Job openings held …
Deep breath please
So the ECB, BOJ, SNB, Riksbank and Danish central bank have negative interest rates but we determine that China is the currency manipulator whose onshore currency is down a whopping 2.7% this year vs the dollar. Anger and pure politics are now driving the approach towards China, certainly not economic logic. If anything, China is doing its best to keep its currency …
ISM services at near 3 yr low
The all important July ISM services index weakened to 53.7 from 55.1 and that was below expectations of 55.5. It's also the weakest since August 2016. New orders fell to 54.1 from 55.8, also the lowest since August 2016. Backlogs fell 2.5 pts to 53.5 while inventories dropped 5 pts to 50. Export orders, where only some service companies report, was down by 2 pts to …
Where have you gone Joe DiMaggio
So now we have a trade situation that is going off the rails as the side effects multiply due to the ramping up of the use of tariffs and we are only further apart from any resolution with the Chinese. The policy of using tariffs as a tool to address our legitimate beefs with the Chinese has failed miserably. We are approaching a year and a half when tariffs on …
Succinct Summation of the week’s events – 8/2
Positives 1)The Federal Reserve is responding the only way they know how, to ease policy at the prospect of an economic slowdown, this time due to 'global developments.' Separately, It is the rare central banker that cites financial markets and the desire not to spike the punch bowl for not wanting to cut rates. Quite refreshing to hear. Boston Fed President said …
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Payrolls
I'll go over the July payroll number but now understand we can throw it out the window with the prospect of the new tariffs. Tariff man is back and more dangerous than ever to our economy and that of the global one. No amount of Fed rate cuts will offset that. I would expect many businesses (that haven't already) will be calling a time out on major spending decisions …
Claims and further weakness in manufacturing
Jobless claims at 215k were about as expected and up from 207k last week. The 4 week average though ticked down to 212k from 213k because a print of 222k dropped out. Continuing claims, delayed by a week, did tick up by 22k after falling by 12k in the week prior. The bottom line remains that the pace of firing's remain modest but considering the softness in …
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Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.