Non defense capital goods ex aircraft orders in October, a core measure of capital spending ex software spending, was unchanged, two tenths less than expected and September was revised down by 4 tenths to a decline of .5% and after August saw a drop of .2%. Thus, after a 1.5% jump in July, capital spending has fallen since. Bottom line, after listening to a bunch …
Bonds/Italy/Sentiment/Housing
https://www.youtube.com/watch?v=BGS0qSHuias While US Treasuries rallied last week in response to the stock market selloff, the 94 point decline in the S&P 500 the past two days saw no rally in US Treasuries. Right now and stated here before, US Treasuries are just not the safe haven like they've been in the past. Something is different, whether it's too much …
Housing starts
Housing starts in October totaled 1.228mm, exactly as forecasted. September was revised a hair higher to 1.21mm, up 9k from the first print. Underneath, it was multi family starts that lifted the total figure m/o/m as they rose by 34k to 363k vs the 6 month average of 354k and 12 month average of 375k. Single family starts were down by 16k to a 3 month low at 865k …
Some notable stuff
After two straight months of below zero prints, the UK CBI industrial orders index rebounded to +10 in November from -6. It's the best in 4 months. Of the 17 industries surveyed, 13 saw output grow. The CBI said "We expect UK manufacturers to continue benefiting from ongoing global economic expansion and a lower sterling exchange rate, but overall economic growth is …
Housing sentiment falters
Home builder sentiment in November plunged by 8 pts to 60 and that was well below the forecast of a 1 pt drop to 67. That’s the lowest since August 2016 and the weakness was across all three components. The present situation was down by 7 pts to 67, the outlook was down by 10 pts and Prospective Buyers Traffic softened by 8 pts and is back below 50 at 45. That is also …
TIC data/Credit/China
Seen late Friday, foreigners were net sellers again in September of US Treasury notes and bonds. This in a month where the 10 yr yield jumped to 3.06% from 2.86%. The selling totaled $11.5b which brings the net year to date buying to $90.5b, which if it holds would be the most since 2014 but as a percent of supply is much smaller. China really picked up the pace of …
Succinct Summation of the Week’s Events 11/16
Positives 1) Jay Powell still seems intent on raising rates next month but maybe gave himself some wiggle room on that when talking about the economic softening going on overseas. While a pause would have made perfect sense if the fed funds rate was already at 3% or higher, dragging their feet and only getting it to 2-2.25% at this point really complicates their …
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Retail sales/Manufacturing/Import prices
With retail sales for October, looking right at the 'control group' which takes out auto's, gasoline and building materials, they rose .3% m/o/m, one tenth less than expected and off a lower than expected base as September was revised down by 2 tenths. Sales ex auto's and gasoline also missed expectations. Car/truck/parts sales rebounded by 1.1% m/o/m but after …
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Maddening to watch
As just a spectator, this negotiating drama in the UK is hugely maddening. The British pound is getting smoked and all one has to do is watch its movement to know which way the wind is blowing in the negotiations and now with minister resignations. We now await a Cabinet vote, to be followed by Parliament if it passes. Gilts are rallying sharply with yields dropping. …
Consumer price inflation
The October CPI rose .3% headline and .2% core m/o/m as expected. The y/o/y increase was 2.5% from 2.3% last month and the core rate was higher by 2.1% y/o/y vs 2.2% in September (one tenth less than expected due to rounding). Energy prices helped to drive the headline gain while services ex inflation contributed to the core rise. On the former, prices grew by 2.4% …
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.