1)Initial jobless claims fell to 751k from 787k and that was 20k below expectations. Continuing claims, delayed by a week, totaled 7.76mm, down from 8.37mm and about 20k less than expected.
2)The October Chicago manufacturing PMI was 61.1. That is better than the estimate of 58 but down slightly from the 62.4 seen in September. MNI said “Anecdotal evidence provided mixed signals, with some firms noting a drop in demand, while others saw a stable level of orders and production or a gradual improvement in business activity.”
3)The October Richmond mfr’g index rose to 29 from 21 and that was better than the expected decline to 18.
4)The final October UoM consumer confidence index rose to 81.8 from 81.2 initially. No change was expected and it’s up from 80.4 in September. The internals though were mixed from September as Current Conditions fell while Expectations rose. One year inflation expectations were unchanged at 2.6% from last month. Employment expectations fell but only after a jump last month. Income expectations were up too. Spending intentions were mixed, falling for both vehicles and major household items but rising for those saying it’s a good time to buy a house.
5)Both income and spending in September rose more than expected with the savings rate falling slightly to a still high 14.3% from 14.8% in August. It peaked at 33.6% in April.
6)The third quarter saw GDP grow by 33.1% q/o/q annualized, about in line with the consensus of a 32% rebound. Under these circumstances it is best to look at the y/o/y numbers and they fell 2.9% y/o/y after the 9% drop in Q2. And importantly, the Q3 real GDP level of $18.58 Trillion is still 3.5% below the level of Q4 2019 at $19.25 Trillion.
7)Core durable goods orders in September rose by 1% m/o/m, twice the estimate and August was revised up by 2 tenths to a gain of 2.1%.
8)Mortgage apps were up slightly w/o/w with purchases higher by .2% and refi’s by 2.5%. The purchase side saw the 1st gain, however slight, in 5 weeks.
9)South Korea, Taiwan and Hong Kong all reported better than expected Q3 GDP figures.
10)In Japan in September, industrial production grew by 4% m/o/m vs the estimate of up 3% led by auto’s and semi equipment. Their unemployment rate held at 3% but the Jobs to Applicant ratio fell slightly to 1.03 from 1.04 and was 1.58 last year. CPI in Tokyo in October ex food and energy fell .2% y/o/y as expected on a tough comparison as last year saw the VAT hike and includes the discounts to travel.
11)South Korea reported November business confidence for both manufacturers and service businesses. For the former, it rose 7 pts to 76, almost matching the February print of 77. The service side also rose 7 pts m/o/m to 69 vs 74 seen in February.
12)Industrial production in September in Singapore dramatically exceeded expectations with a 10.1% m/o/m increase vs the expected decline of 7.8%. Attribute the jump to a 90% m/o/m and 114% y/o/y increase in pharma production. Without this, IP would have been up a more modest 1.6% m/o/m but still well above the estimate. The production of electronics also helped.
13)In the Eurozone, Q3 GDP rose 12.7% q/o/q vs the estimate of up 9.6% and fell by 4.3% y/o/y after the almost 15% drop in Q2. The forecast was for a 7% contraction.
14)The headline CPI for the Eurozone in October fell .3% y/o/y as expected but the core rate was still positive, up .2% as forecasted.
15)EU economic confidence index for October was unchanged from September at 90.9, better than the estimate of 89.6. That’s the best since March when it printed 94.1 although still remains well below the 103.4 seen in February. Obviously with the new restrictions, the November data will weaken.
16)The ECB said bank loans to non financial companies in the Eurozone rose by 7.1% y/o/y in September, unchanged since June. Loans to households were up by 3.1% y/o/y vs 3% in August. Broad money supply growth was up by 10.4% y/o/y, beating the estimate of 9.6% and up from 9.5% in the month prior.
1)Is the Fed put dead? Bill Dudley argued this week that it is. “No central bank wants to admit that it’s out of firepower. Unfortunately, the US Federal Reserve is very near that point… Even if the Fed did more – much more – it would not provide much additional support to the economy. Interest rates are already about as low as they can go, and financial conditions are extremely accommodative. Stock prices are high, investors are demanding very little added yield to take on credit risk, and a weak dollar is supporting US exports.”
2)As of October 9th, the combined number of people receiving Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation rose to 14mm.
3)The PCE inflation index rose .2% both headline and core as expected with the y/o/y increases of 1.4% and 1.5% respectively.
4)The Conference Board’s Consumer Confidence index in October fell to 100.9 from 101.3. It was a touch below the estimate of 102. The internals were mixed as the Present Situation rose 5.7 pts m/o/m but the Expectations component slipped by 4.5 pts. One year inflation expectations fell one tenth to 5.6% vs 4.8% one year ago and vs 4.5% in March. Helping the current situation was the improvement in the labor market answers. Business expectations looking out the next 6 months were muted. Employment expectations weakened while income expectations were unchanged. Spending intentions were also mixed. Here was the Conference Board’s bottom line: “There is little to suggest that consumers foresee the economy gaining momentum in the final months of 2020, especially with Covid cases on the rise and unemployment still high.”
5)New home sales in September totaled 959k, about 65k less than expected and August was revised down by 17k to 994k. Either way, these are the highest monthly level of sales since 2006. Months’ supply did tick higher to 3.6 from 3.4 but is historically still very low as the 20 average is 5.8. The median home price rose 3.5% y/o/y but this bounces around a lot each month as mix is the big driver. The average price rose to a record high of $405,400, again mostly due to mix as there was a pick up in homes sold priced above $750k and a decline in those sold below $300k. Regionally, sales in the Northeast fell to the lowest since May but are up sharply since then down South and out West.
6)Christine Lagarde and her ECB colleagues hint at even more monetary moves in December (either more or a ‘recalibration’ of existing policies) not understanding that the source of the economic challenge is Covid and more money printing is not going to change that or even cushion it and will instead further entrench the challenges of the banking sector.
7)The ECB said in its quarterly lending survey that “For the fourth quarter of 2020, banks expect credit standards to continue to tighten for firms, reflecting concerns around the economic recovery as some sectors remain vulnerable, as well as uncertainties around the prolongation of fiscal support measures.”
8)Thanks to a new round of restrictions, the UK October CBI retail sales index fell to -23 from +11 and that was well worse than the expectation of -1. There have been no direct restrictions on retail but the other restrictions did reduce shopping tendencies.
9)The German October IFO business confidence index fell a touch to 92.7 from the September read of 93.2. The estimate was 93. The internals were mixed as the Expectations component fell 2.4 pts m/o/m to 95 but the Current Assessment was up by 1.1 pts to 90.3. In their typical succinct way, the IFO said “In view of rising infection numbers, German business is becoming increasingly worried.”
10)The NY Jets are now 0-7.