1).As of this writing it looks like something positive will come of the trade negotiations.
2) Initial jobless claims totaled 210k, 10k less than expected and down from 220k last week. As a print of 206k came out, the 4 week average rose 1k to 214k. Delayed by a week, continuing claims rose 29k but off the lowest since April.
3) The preliminary UoM consumer confidence index rose to 96 from 93.2 and that was 4 pts above the estimate. We’ve now almost gotten back the 8.6 pt drop seen in August from the July print of 98.4. For the year to date, the average confidence print is at 95.6. Most of the gain was driven by the 5 pt rise in Current Conditions as Expectations were up by 1.4 pts. One year inflation expectations fell to 2.5% from 2.8% and that matches the recent low seen in April. Positively, those expecting higher income jumped by 9 pts to the highest level since March. Negatively though, those expecting lower unemployment fell 2 pts to the lowest since January. Spending intentions rose across the board m/o/m.
4) The September consumer price index was flat m/o/m and up .1% at the core, both one tenth below the estimate. Due to rounding though, the core rate rose 2.4% as expected, holding at an 11 yr high. The headline increase was 1.7%, the same pace as in August. Services inflation ex energy continues to drive the core rate led by rents and healthcare as it rose .3% m/o/m for the 4th straight month and 2.9% y/o/y. Core goods prices fell .3% m/o/m driven by a rather sharp 1.6% m/o/m drop in used car prices but after a 1.1% rise in August.
5) Headline PPI fell .3% m/o/m, well below the estimate of up 1%. Goods prices fell .4% with ¾ of the decline related to gasoline prices. Ex food and energy saw goods prices fall by .1% m/o/m and it’s been trending around zero for most of this year. Because of a full 1% m/o/m drop in trade/transportation/warehousing, in light of the slowdown in manufacturing, services PPI fell .2% m/o/m. Machinery and vehicle wholesaling prices actually made up 50% of the decline in services. Truck transportation of freight costs in particular, which skyrocketed last year, continue to come down to earth as too much capacity was built up and business now slows. They fell .6% m/o/m and .2% y/o/y. Versus last year, headline PPI is up 1.4% and 2% at the core level.
6) Import prices remained benign in September.
7) With the help of a 10 bps drop in the average 30 yr mortgage rate to 3.90%, refi applications rose 9.8% w/o/w and are up 163% y/o/y.
8) I hope the chatter is true that some Hong Kong protestors are looking at ratcheting down the violence and property destruction so to keep their interests in line with the more moderate protestors.
9)Are we there yet? Hopefully if what the Irish PM and UK PM Boris Johnson have alluded to this week.
10) German IP in August surprised to the upside and July was revised to a less negative print but was still down 4% y/o/y and lower for the 12th month in the past 13.
11) German factory orders in August fell .6% m/o/m, more than the estimate of down .3% but July was revised up by 6 tenths so not as bad as feared. Versus last year though orders are still down 6.7% and have fallen for 15 straight months. The main weakness in August was within Germany as orders rose to the Eurozone and outside of the region.
12) Spain’s August IP also beat expectations with a .9% m/o/m rise vs the forecast of no change and July was revised up by 2 tenths.
1).The September NFIB small business optimism index fell to 101.8 from 103.1 and that matches the lowest since February. The NFIB bottom lined the report by saying “As small business owners continue to invest, expand, and try to hire, they’re doing so with less gusto than they did earlier in the year, thanks to the mixed signals they’re receiving from policymakers and politicians. All indications are that owners are eager to do more, but they’re uncertain about what the future holds and can’t find workers to fill the jobs they have open.”
2) The number of job openings in August fell to 7.05mm, the least since March 2018. The number of hiring’s fell as did the number of quitters.
3) Purchase applications to buy a home fell .9% w/o/w notwithstanding a 10 bp drop in mortgage rates but they are still up 9.7% y/o/y.
4) Household debt continues to rise sharply as nonrevolving debt outstanding (mostly student and auto loans, with the former up substantially) rose at a 7.8% annualized rate in August to another new record high of $3.06 Trillion. Revolving credit outstanding fell by $1.9b m/o/m but after rising by $9.4b in July.
5)China’s Caixin private sector weighted services PMI for September did soften to 51.3 from 52.1 and that was below the estimate of 52. That’s the lowest since February. Seen last week manufacturing rose slightly and Caixin bottomed lined the combined index by saying “China’s economy showed signs of marginal recovery in September, as the labor market improved and domestic demand increased at a faster pace. However, fluctuations in exchange rates, and rising costs of labor and raw materials increased pressure on companies, which restrained business confidence.”
6) The very volatile Japanese machinery orders fell 2.4% m/o/m and 14.5% y/o/y vs the estimate of down 1% and 8.4% respectively.
7) UK industrial production in August fell .6% m/o/m, worse than the estimate of up .1% and which follows a .1% rise in July.
8) French IP fell .9% m/o/m, well worse than the forecast of up .3% driven by an .8% fall in manufacturing. The challenging auto sector saw a m/o/m decline for the 6th month in the past 7.
9)German exports fell 1.8% m/o/m, more than the estimated decline of 1%. Imports fell .5% but as expected.
10) We keep hearing about more European banks that are passing along negative interest rates to retail depositors with some with balances as low as 100,000 euros. Fortunately, the internal pushback against the last round of ECB moves is getting loud and maybe we’re seeing the endgame of this monetary craziness which I believe we are.
11) The October Sentix economic sentiment index fell to -16.8, the lowest since April 2013. They said “Fears of recession are and remain imminent.”