I know you didn't wake up thinking about the Czech National Bank ahead of tomorrow's FOMC meeting but it is a hint of what's to come in the back half of 2021 when the vaccine is mass rolled out. They seem to understand that the main reason for all the easing in 2020 was because of Covid and when Covid is under control in 2021, it's time to think about removing some of …

Dallas mfr’g/Inflation
The January Dallas manufacturing index fell for the 3rd straight month to 7.0 from 10.5 in December. The estimate was 12.0. New orders dropped by 13 pts to 6.3 and the growth rate of orders fell to 5.9 from 15.9. Backlogs declined to 5.7 from 9.5. Delivery times moderated after the recent jump. The ‘Company Outlook’ dropped by 8 pts to a 6 month low. Inventories …

Sentiment, option trading/Some #’s
Here is the updated Citi Panic/Euphoria index at 1.89, down slightly from the above 2.0 print last week. Still very extreme though. This compares with the above .40 which is considered euphoric. I also include a chart below that I saw on Twitter that measures the extent of the call buying. This call buying is not part of a long term retirement plan, or well researched …

Succinct Summation of the Week’s Events – 1/22
Positives 1)The January US manufacturing and services PMI rose to 58 from 55.3 with both components higher. Markit said "US businesses reported a strong start to 2021, buoyed by hopes that vaccine developments will mean the worst of the pandemic is behind us, and that the new administration will provide a stable and supportive environment for stronger economic …
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Some overseas data
Some Markit PMI's are rolling in for January. Australia's manufacturing and services composite index fell to 56 from 56.6 but the components were mixed as manufacturing rose 1.5 pts m/o/m to 57.2 while services fell by 1.2 pts to 55.8. Markit said the growth momentum in services "was stymied by the Covid-19 pandemic and border restrictions." With manufacturing, "Good …
Claims/Housing/Mfr’g
Initial jobless claims totaled 900k, 35k less than expected but comes after the jump to 926k last week (revised from 965k). Smoothing this out puts the 4 week average to 848k vs 825k last week. Those receiving Pandemic Unemployment Assistance jumped to 424k from 285k. Continuing claims, delayed by a week, fell to 5.05mm, about 250k below expectations and down from …
Sentiment/Some data
After yesterday's Investors Intelligence revealed that Bulls fell to 60.4 from 63.7 where almost all went to the Correction side while Bears were little changed at a still very low 16.8 from 16.7, today's AAII said Bulls were 42.5 vs 45.2 last week and Bears rose 2.8 pts to 34.5. So, II is still very stretched with Bulls above 60 and the spread to Bears higher than 40 …
Home builder sentiment
The January NAHB home builder sentiment index slipped to 83 from 86 and that was 3 pts below expectations. Keep in mind though the breakeven is 50 so this is still a very enthusiastic level of confidence. Both the current outlook and the expectation components fell 2 pts m/o/m. Prospective buyers Traffic was down by 5 pts to 68. On the demand side, the lack of …

A few things
According to the MBA, the average 30 yr mortgage rate rose 4 bps w/o/w to 2.92%, the highest since late November coincident with the rise in the 10 yr Treasury yield, although the mortgage rate is not up by much. Purchase apps grew by 2.7% w/o/w and are up almost 15% y/o/y. Refi's though fell 4.7% w/o/w but only after jumping by 20% last week. They are still up 87% …

Sentiment/Yellen/Wheat/Germany
Here is an update of the Citi Panic/Euphoria index where it literally is going off the chart. It was 1.83 last week and 1.28 in the week prior. This is an unprecedented level of enthusiasm in the history of this index but it will only matter when it matters. Janet Yellen's testimony begins today and it's no surprise that she supports a large amount of …