The Boock Report

Bullish sentiment only cooled slightly w/o/w according to II. Bulls fell by .5 pt to 49 and again, almost all went to the Correction side which rose for a 4th straight week to the highest since early January. For some reason, maybe way too much faith in the Fed, Bears are just .1 pt from a 14 month low at 17.3. Bottom line, from a contrarian standpoint it is good to …

[Read more...] about Sentiment/Housing/Yields/Crops/Germany

We finally got a good 2 yr note auction. The yield of 2.125% was priced 1 bp lower than the when issued. The bid to cover of 2.75 was above the one year average of 2.64 and the best since August 2018. Lastly and reflecting solid demand, direct and indirect bidders took 74% of the auction, the most since January 2018 and well more than the 12 month average of 60% and …

[Read more...] about Solid 2 yr auction/Weak Dallas mfr’g

The Conference Board’s Consumer Confidence index for May rose 4.9 pts m/o/m to 134.1 and that was 4.1 pts better than expected. It follows a 5 pt rise in April and is at the best level since October. For perspective, the 12 month average is now 130.5. In contrast to the rise in inflation expectations in the UoM confidence figure, one year inflation expectations in …

[Read more...] about Consumer confidence up but not for young people

I forgot to point out the sharp rally we’re seeing in crop prices on the heels of the very late planting seen this year due to poor weather and flooding. Combine this with the new bailout package for farmers where for some, they may not plant at all this year. Corn today is up by 2.3% after Friday’s 3.7% rally that took it above $4 per bushel. It’s now at the highest …

[Read more...] about Crop prices

There was barely a response in the euro to the EU parliamentary elections but sovereign bond yields continue lower outside of Italy. The German 10 yr yield is now down about 3 bps over the past two days to -.15% and that's now just 4 bps from its 2016 record low. The French 10 yr is down to just .26%. The European bank stocks hate this and the Euro STOXX bank stock …

[Read more...] about A little bit of this, a little bit of that

Core durable goods orders for April fell .9% m/o/m, less than the estimate of down .3% and what makes it even weaker is that March was revised down by 9 tenths to a gain of just .3%. I never talk about aircraft orders because of the huge monthly volatile but in light of Boeing’s issue, we will today. Nondefense aircraft orders fell 25% m/o/m and are down by 54% y/o/y. …

[Read more...] about Core durable goods orders disappoint

The Japanese reported its April CPI data, the exact numbers that has single handedly driven the BoJ to own about 40% of the JGB market, 75% of the stock ETF market and is partly responsible for the 90% nominal decline in the Topix bank stock index over the past 30 years because of what they did to their yield curve, all for what? The core rate (just ex food) rose .9% …

[Read more...] about Japan/UK

The Markit US manufacturing and services composite index fell to 50.9 from 53. This is a 3 year low. Manufacturing dropped to 50.6 from 52.6 and services fell to 50.9 from 53. With respect to manufacturing Markit said “Underlying data indicated a broad based slowdown in the rates of expansion for output, employment and pre-production inventories, while new orders …

[Read more...] about Not a good read/Housing

Initial jobless claims were little changed w/o/w at 211k vs 212k last week and that was 4k less than expected. The 4 week average fell to 220k from 225k last week and vs 220k in the week prior. Continuing claims, delayed by the week, rose by 12k after falling by 22k last week. Bottom line, the pace of firing’s remains very modest and still reflects a solid labor …

[Read more...] about Initial claims still low, for now