1)Headline CPI in December rose .4% m/o/m and the core rate was higher by .1% m/o/m. Both are exactly in line with expectations. The headline rate is now up 1.4% y/o/y and 1.6% ex food and energy. Services prices moderated further while goods prices accelerated further.
2)PPI in December rose .3% headline, one tenth core and .4% also taking out trade. The 1st two were one tenth below estimates, the ex food, energy and trade was double the estimate. On a y/o/y basis, headline PPI rose .8%, the same pace as in November. The core rate was higher by 1.2% vs 1.4% last month and ex trade was higher by 1.1% vs .9% in the month prior.
3)Mortgage apps jumped by almost 17% for the week ended January 8th. Purchases were higher by 8% w/o/w and 9.8% y/o/y while refi’s were higher by 20% w/o/w and 92.5% y/o/y. Take with a grain of salt though the data around holidays and immediately after as they fall initially and then bounce back after.
4)Cass Freight said shipments in December rose 6.7% y/o/y. “The acceleration was partially explained by an easier prior year comparison…With low inventory levels at US retailers and a sharp reduction in blank sailings by global containership lines ahead of the 2/12-26 Chinese New Year holiday, the near term pipeline of freight still looks quite strong from our perspective.”
5)Industrial production in December surprised to the upside with a 1.6% m/o/m increase, well above the estimate of up .5%. A lot of this was the jump in utility output as the weather turned cold. Manufacturing output rose .9% m/o/m vs the estimate of up .5% and helped by machinery, likely in response to higher commodity prices. To this, mining production rose for the 3rd month in 4. Capacity utilization rose to 74.5% from 73.4%.
6)We saw good 10 yr and 30 yr Treasury auctions which helped temporarily (I believe) to stem the rise in long term rates.
7)Old data but job openings in November totaled 6.527mm, about 75k above expectations but down slightly from 6.632mm seen in October.
8)Chinese exports rose 18.1% y/o/y in December, 300 bps above expectations. Exports in particular rose 35% to the US. Imports grew by 6.5%, slightly higher than the forecast of up 5.7%. That trade surplus is now at a record high. China’s appetite for commodities remained robust. Crude imports rose 7.3% y/o/y, by 9.5% for iron ore, by 64% for steel products, by 13.3% for soybeans, by 34% for copper and 5.3% for natural gas.
9)China reported an increase in aggregate financing of 1.72T yuan in December but which was almost 500b below expectations. As bank loan growth of 1.26T was as expected, the fall off relative to expectations was thus in other avenues of funding. Money supply growth moderated and we are possibly seeing a taping on the credit brakes that has been hinted at by the PBOC.
10)Japanese machinery orders in November again surprised to the upside with a 1.5% m/o/m increase which comes after a 17% jump in the month prior. The estimate was for a fall of 6.5%.
11)Notwithstanding the increase in lockdowns starting in November, the UK economy didn’t contract as much as expected m/o/m as it fell 2.6% vs the estimate of down 4.6%.
12)Industrial production in the Eurozone in November rose 2.5% m/o/m, above the estimate of up .2% and follows a 2.3% increase in October. It was pretty bifurcated though amongst countries. Ireland was a particular standout with a 53% spike in production (though seems like they are having an issue with their calculation). Germany saw an .8% gain while France, Spain and Italy saw declines.
13)Statute of limitations? //www.youtube.com/watch?v=ee_eLLY4XQ8 , fast forward to :57 and watch until 1:20.
1)Initial jobless claims totaled 965k, well above the estimate of 789k and up from 784k last week. Initial claims for PUA rebounded to 284k from 161k last week and vs 310k in the week before. Continuing claims for the week ended January 2nd jumped by 200k w/o/w and that was 271k higher than estimated. For the week ended 12/25, before it was passed on 12/27, continuing claims for PUA fell 940k. Those continuing to receive pandemic emergency unemployment compensation fell by 325k for also the week ended 12/25.
2)Retail sales in December were well below expectations and November was revised down. Core retail sales which strips out auto’s, building materials and gasoline fell 1.9% m/o/m vs the estimate of up .1%. November was revised down by 6 tenths.
3)The January NY manufacturing index fell a touch to 3.5 from 4.9 m/o/m. The estimate was 6.0. The internals were pretty mixed. The 6 month outlook fell to the lowest level since May and that is even with the vaccine. Capital spending rose slightly m/o/m.
4)The December NFIB small business optimism fell to 95.9 from 101.4. That is the weakest since May. The categories of Plans to Hire, Increased Capital Spending, Earnings Trends, Expect Higher Sales, Expect Better Economy, Positions Not Able to Fill, Compensation, Plans to Increase Inventory, Credit Conditions, and Higher Selling Prices all fell m/o/m. The most notable was the 24 pt drop to -16 in Expect Better Economy. The NFIB is blaming both Covid and politics for the fall in confidence. “This month’s drop in small business optimism is historically very large and most of the decline was due to the outlook of sales and business conditions in 2021. Small businesses are concerned about potential new economic policy in the new administration and the increased spread of Covid that is causing renewed government mandated business closures across the nation.”
5)Import prices in December surprised to the upside with a .9% m/o/m increase vs the estimate of up .7% and prices ex petro jumped by .4% vs the forecast of up .1%. Prices ex food and fuels also rose by .4% and are now up 2% y/o/y. Industrial supply prices led the way with a 4.2% m/o/m jump. Petro import prices jumped by 9.1% m/o/m but are still down 20% y/o/y.
6)The preliminary January UoM consumer confidence index fell to 79.2 from 80.7 and that was a bit below the estimate of 79.5. Both current conditions and the expectations components were lower. Of note, one yr inflation expectations jumped to 3% from 2.5%, the highest since August. Employment and income expectations rose slightly m/o/m. Business expectations moderated. Spending intentions fell across the main 3 categories. Confidence among Democrats rose to the highest level since October 2016, up 3.7 pts m/o/m and those of Republicans fell 7 pts to the least since then and have now dropped by 27 pts since October. “The partisan shift in expectations was due to anticipated changes in economic policies.” Covid overall kept a lid on the headline number.
7)The negative rot of negative interest rate policy spreads further as UBS lowers the threshold of those accounts that will be taxed on their deposits.
8)China reported its inflation stats for December. CPI rose .2% y/o/y vs the estimate of no change. Food prices rose again after a drop in November. Prices ex energy and food rose .4% y/o/y vs .5% in the five prior months. PPI fell by .4% y/o/y but not as much as the -.7% forecast.
9)As seen in the Citi Panic/Euphoria market index, the mood has literally gone off the charts with its parabolic move.