1)Moderna, while still having to progress thru phase 3 trials, reported positive antibody results from phase 1 data and brings us a step closer to that hoped for vaccine.
2)Disney World, “the happiest place on earth”, reopened.
3)Refi’s bounced by 12% w/o/w and are up 107% y/o/y as mortgage rates took another leg lower, down by 7 bps on the week to a fresh record low of 3.19%.
4)The July NY manufacturing index rose to 17.2 from -.2 and that was better than the estimate of 10. The 6 month business outlook did moderate but only after the June spike to 56.5 from 29.1. July settled in at 38.4. Capital spending plans increased for a 2nd month but still remain below where it was pre Covid not surprisingly. Expectations for both prices paid and received rose to 4 month highs. Employment expectations also grew.
5)The Philly July manufacturing index also was better than expected at 24.1, 4 pts above the forecast but is down from 27.5 in June. After spiking last month, the 6 month outlook moderated to 36 from 66.3 and vs 49.7 in the month prior. Capital spending plans were unchanged from June.
6)The June CPI rose .6% headline and .2% core m/o/m, about as expected. The y/o/y increase is .6% headline and 1.2% ex food and energy. A 5.1% m/o/m gain in energy and .6% rise in food drove the headline increase relative to May. Medical care led the price gains in services ex energy that are moderating in part to slower rent growth.
7)The June NFIB small business optimism index improved to 100.6 from 94.4 and that is the best since February when it printed 104.5. The economic reopening (before some of the reclosings we’re now seeing) was all over this report. The NFIB chief economist Bill Dunkelberg said “Small businesses are navigating the various federal and state policies in order to reopen their business and they are doing their best to adjust their business decisions accordingly. We’re starting to see positive signs of increased consumer spending, but there is still much work to be done to get back to pre-crisis levels.”
8)Industrial production in June exceeded expectations with a 5.4% m/o/m increase driven by a 7.2% rise in manufacturing as more facilities reopened.
9)Core retail sales grew by 5.6% m/o/m in June, above the estimate of 4% as consumers continued to venture outside again.
10)The NAHB July home builder sentiment index jumped to 72 from 58 and was 11 pts above the estimate. All 3 categories improved m/o/m and the NAHB said “New home demand is improving in lower density markets, including small metro areas, rural markets and large metro exurbs, as people seek out larger homes and anticipate more flexibility for telework in the years ahead. Flight to the suburbs is real.”
11)Housing starts were slightly better than expected in June when we include the modest upward revision to May and was the best in 3 months. Permits though were less than expected but only because of a slowdown in multi family (giving back the May jump). Single family permits rose to a 3 month high.
12)The BoJ and ECB did nothing as expected as there really isn’t much left for them to do. The Bank of Korea kept rates unchanged too while Indonesia cut rates by 25 bps as expected.
13)China reported its trade data for June and both exports and imports and they were better than expected. Exports were up a slight .5% y/o/y but that was above the estimate of down 2%. Reopenings and the continued increase in exports in medical equipment and pharma helped. Imports grew by 2.7% y/o/y, well more than the forecast of down 9% and helped by a rise in commodity imports.
14)China said its economy grew by 3.2% y/o/y in Q2, above the estimate of up 2.4% but I’m not really sure how this is possible considering the state of the world relative to last year.
15)Australia said June job growth was twice expectations at 211k but all because of a spike in part time.
16)Singapore said its June non oil domestic exports grew by 16.1% y/o/y, double the estimate.
17)After a massive jump in jobless claims in May of 529k in the UK, they fell by 28k in June.
18)I had my baseball fantasy draft this week so the abbreviated baseball season better happen.
1)The virus daily case counts continue to surge and businesses are having to reclose.
2)Initial jobless claims totaled 1.3mm, above the estimate of 1.25mm and little changed with the 1.31mm seen last week. And these numbers don’t include the Pandemic Unemployment Benefits for those self employed, including gig workers. Continuing claims did recede but still remain alarming high at 17.34mm.
3)Purchase applications, which have been powering thru the economic slowdown, took a breather on the week with a 6.1% w/o/w decline but still remain up almost 16% y/o/y.
4)For the 12 months thru June, the US budget deficit stood at $3 Trillion, about 14% of GDP.
5)Financing these budget deficits becomes more dependent on the Fed monetizing them as foreigners continue to be large sellers of US Treasuries. In May they were net sellers of $27.7b after selling $153b in April and $227b in March as they scrambled for dollars and thus resulted in the Fed “we need to repair market functioning” actions. They were repaired months ago but the Fed is still gobbling up Treasuries.
6)For those looking for froth in the US stock market, we’ve obviously seen the spike in Robinhood accounts but Charles Schwab said this week in its earnings call that new retail brokerage accounts rose to 1.65 million in Q2, quite a change from last year’s Q2 increase of 386k when the world was quite a different place. Nothing like a global pandemic to stoke speculation.
7)The July ZEW investor confidence index in the German economy slipped to 59.3 from 63.4 but was about as expected. Current Conditions were up slightly but worse than expected at -80.9 vs the estimate of -65. Bottom line from ZEW: “The outlook for the German economy largely remains unchanged compared to the previous month. After a very poor 2nd quarter, the experts expect to see a gradual increase in GDP in the 2nd half of the year and in early 2021.”
8)New car registrations in the EU in June fell by 22.3% y/o/y but a moderation from the 52% decline in May.
9)It still seems that EU leaders are not close to agreeing to the 750b euro grant/loan program proposed.
10)Core inflation rose in June in the UK to a 1.4% y/o/y rate from 1.2%. No change was expected. The headline rate was up just .6% y/o/y.