1)The consumer mood improved in December according to the UoM consumer confidence index which rose to 81.4 from 76.9. The estimate was for little change at 76. Current Conditions rose 4.8 pts m/o/m while the Expectations component was higher by 4.2 pts. One year inflation expectations did recede to 2.3% from 2.8%. Employment expectations got back 9 of the 18 pts lost last month. Income expectations recovered 3 of the 6 pt drop in November. Spending intentions were mixed. The UoM said “Long term prospects for the economy were quite sensitive to partisanship. Favorable long term prospects for the national economy were anticipated by 58% among Democrats in early December, surging 19 percentage points above last month and 41 percentage points above August. In contrast, just 33% of Republicans anticipated that the economy would avoid any downturn during the next five years.”
2)The MBA said that mortgage rates fell to a fresh record low at 2.9% and that helped refi apps to rise 1.8% w/o/w after last week’s drop and they are higher by 89% y/o/y.
3)The November PPI rose .1% m/o/m both headline and core. The headline rate was as expected, the core rate was one tenth less. On a y/o/y basis, headline PPI was up by .8% vs .5% in October. The core rate was higher by 1.4% vs 1.1% last month and that is the most since January. The rise in goods prices was apparent as they rose .4% with energy up 1.2%, food by .5% and those ex these two up by .2%. Service prices on the other hand saw no change.
4)Job openings in October totaled 6.65mm vs 6.49mm in September and above the estimate of 6.30mm. That’s a 3 month high. Hiring’s though fell and layoffs rose. The number of quitters was little changed.
5)Germany, France, Spain, Italy and the UK all reported better than expected October industrial production figures before Covid restrictions were added in November.
6)The UK said GDP growth in October was just above expectations.
7)The German ZEW December investor confidence index rose to 55 from 39 and that was 9 pts better than expected. Current Conditions though fell 2 pts to -66.5, about as forecasted. ZEW said “The announcement of imminent vaccine approvals makes financial market experts more confident about the future.”
8)Aggregate financing in China in November totaled 2.13T yuan, above the estimate of 2.08T with bank loans making up 1.43T of it. This compares with 1.42T and 690b respectively in October. Money supply growth as measured by M2 was higher by 10.7% y/o/y vs 10.5% in the month prior.
9)The consumer price index in China in November saw a .5% y/o/y decline vs the estimate of no change and this is all due to a 2% drop in food prices after a long stretch of pork filled increases. Prices ex food and energy rose .5% for the 5th straight month. PPI fell 1.5% y/o/y, not as much as the 1.8% expected decline and a moderation from the 2.1% fall in October.
10)Chinese exports in December rose 21.1%, well above the estimate of up 12%. Imports were up by 4.5% y/o/y but that was below expectations of a 7% rise. This growing surplus to a record high (going back to at least 30 yrs of info) led to a rise in FX reserves to $3.178T in November, the highest since August 2016.
11)Japan said its October machinery orders figure jumped by 17.1% m/o/m, well better than the estimate of a 2.5% gain.
12)Taiwan’s November exports rose 12% y/o/y, above the estimate of up 8.8%. Imports jumped by 10% vs the forecast of up just .3%.
1)Initial jobless claims rose to 853k from 716k last week and that was well above the estimate of 725k. This increase also comes after the Thanksgiving holiday that possibly kept last week’s level lower than what it would have been otherwise. The 4 week average rose to 776k from 741k in the week prior. Pandemic Unemployment Assistance jumped to 428k from 288k. Continuing claims, delayed by a week, totaled 5.76mm, up from 5.53mm in the week prior and about 550k more than expected. Finally those receiving continuing Pandemic Emergency help fell by a modest 36k to a still high 4.5mm. Those receiving continuing PUA fell by 314k to 8.56mm. Adding it all up, almost 19mm people are still receiving benefits of some sort.
2)The November CPI rose .2% m/o/m both headline and core and that was above the estimate of up .1% for each. Versus last year headline CPI is up 1.2%, the same pace as in October and the core rate was higher by 1.6%, also unchanged. Goods prices rose 1.4% y/o/y, the quickest pace since 2012. Services inflation, ex energy, moderated to a .2% m/o/m and 1.7% y/o/y increase.
3)Purchase applications fell by 5% w/o/w but only after jumping by 9% last week. They are still higher by 22% y/o/y.
4)The November NFIB small business optimism index fell to 101.4 from 104, a 3 month low but still not that far from the pre Covid level of 104.5. The components were very mixed. The NFIB summed up the report by saying “Small business owners are still facing major uncertainties, including the Covid-19 crisis and the upcoming Georgia runoff election, which is shaping how they’re viewing future business conditions. The recovery will remain uneven as long as we see state and local mandates that target business conditions and disproportionately affect small businesses.”
5)Now $18 Trillion of negative yielding bonds outstanding. $18 Trillion that once were assets that are now liabilities for the holders.
6)German trade data in October saw both exports and imports were higher m/o/m but less than expected.
7)Household spending in Japan in October rose 1.9% y/o/y after a 10.2% drop in September (tough comp as it was pre VAT hike). That though was below the estimate of up 2.8% on an easy comp. Modest wage growth still hasn’t helped. Regular pay rose just .3% y/o/y while overtime and bonus pay fell sharply in October.