Positives
1)After little change seen in the prior 3 weeks, purchase applications to buy a home rose 2.6% w/o/w and is up a robust 40% y/o/y. Refi’s were up by 3% w/o/w and 60% y/o/y. The average 30 yr mortgage rate was little changed at 3.07%, just off the record low.
2)The August NFIB small business optimism index rose 1.4 pts m/o/m to 100.2. Bill Dunkelberg, the NFIB chief economist summed up the report by saying “Small businesses are working hard to recover from the state shutdowns and effects of COVID. We are seeing areas of improvement in the small business economy, as job openings and plans to hire are increasing, but many small businesses are still struggling and are uncertain about what the future will hold.”
3)The number of job openings in July totaled 6.6mm, up from 6mm in June and is the 3rd straight month of increases after the sharp declines of March and April.
4)The Bloomberg weekly consumer confidence index rose to the best level since early April but at 47.8 is still well below the high of the year seen in January of 67.3.
5)The UK said its economy in July grew 6.6% m/o/m as expected but its output is still 12% below the peak in February.
6)The UK, Spain and Italy all reported July industrial production figures that were higher than expected.
7)Japan’s July core machinery orders rose 6.3% m/o/m, well above the estimate of up 2% but follows a 7.6% decline in June.
8)China’s exports in August rose 9.5% y/o/y, better than the estimate of up 7.5%.
9)Chinese inflation data and both CPI and PPI were about as expected. CPI rose 2.4% y/o/y vs 2.7% in the month prior and again was mostly all driven by higher food prices as prices ex food and energy were up just .5%. PPI was less negative with a 2% decline vs -2.4% in July.
10)Taiwan’s exports and imports in August rose more than 8% y/o/y, well better than the forecast of little changed for each.
11)The NFL is back.
Negatives
1)Initial jobless claims totaled 884k, 34k more than expected but unchanged with last week which was revised up by 3k. Delayed by a week, continuing claims were 13.39mm, about 485k above the estimate and up from 13.29mm in the week prior. Those receiving pandemic unemployment assistance rose for the 4th straight week and by 90k this past one to 839k. As of August 21st there were 14.59mm continuing to receive these payments. Thus, a total of 28mm people are receiving benefits of some sort.
2)August CPI rose .4% m/o/m both headline and core with the former one tenth more than expected and the latter 2 tenths higher than forecasted. The y/o/y gain is 1.3% headline and 1.7% core. Core goods prices jumped 1% m/o/m after a 7 tenths rise in July led by higher used car prices. On the services side ex energy, prices rose .1% m/o/m and 2.2% y/o/y which is a slight moderation because rent gains are slowing, mostly because of what’s going on in the big cities like NY, Chicago and San Francisco. Medical care costs rose 4.5% y/o/y.
3)After a jump in wholesale prices in July, they continued upward in August by a pace that was more than expected. Headline PPI rose .3% m/o/m vs .6% in July and that was one tenth more than expected. The core rate, ex food and energy, was higher by .4% m/o/m, two tenths more than the forecast and vs .5% in July. Prices versus last year though are still muted with the headline rate down .2% y/o/y and the core rate higher by .6% y/o/y.
4)On the negative side because of the debt buildup, aggregate financing in China in August totaled 3.58T, 1T more than expected and up from 1.69T in July. It was really all the non bank side as bank loans made up 1.28T of the total, about as expected. Much of the rise was local government issued bonds likely related to infrastructure projects. Money supply growth though was 10.4% y/o/y vs 10.7% in July. Loans to companies moderated from July while they rose 11% m/o/m to households.
5)China’s August imports, many of which end up as exports, fell 2.1% y/o/y, worse than the forecast of a slight rise of .2%.
6)The export dependent German economy saw its exports in July rise 4.7% m/o/m, a touch below the estimate of up 5%. Imports were higher by 1.1%, below the estimate of up 3.5%.
7)Germany’s July industrial production number rose 1.2% m/o/m, below the estimate of up 4.5% while June was revised up a slight 4 tenths.
8)France said its industrial production figure in July rose 3.8% m/o/m but that was below the forecast of up 5%. The manufacturing component though did beat forecasts.
9)Today every year is always a tough day.
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor. Each day The Boock Report provides summaries and commentary on the macro data and news that matter, with analysis of what it all means and how it fits together.