Succinct summation of week’s events:

Positives:

1) According to Bankrate.com, the average 30 yr mortgage rate fell to an historic low of 3.41% last night, down 7 bps on the week.
2) Initial Jobless Claims total 359k, down from 385k last week.
3) Personal Spending in Aug rise .5% m/o/m, the most since Feb (but up just .1% after adjusting for inflation) .
4) Conference Bd Consumer Confidence up 9 pts in Sept to 70.3, well above est and the best since Feb as answers to labor market questions improve slightly.
5) Richmond mfr’g improves to +4 from -9, Dallas mfr’g remains negative but less so at -.9 vs est of -2.7.
6) July S&P/CS home price index up 1.2% y/o/y to most since Jan ’11 seasonally adjusted with 16 of 20 cities up y/o/y.
7) German unemployment rate holds at 6.8% with number of unemployed up as expected.
8) German and Italian consumer confidence about as expected.
9) Italian and French business confidence about as expected.

Negatives:

1) Spanish IBEX down 6.3% on the week, 2 yr yield near 3.5% and 10 yr near 6% on upside. Budget news one thing, implementation and results another. Bank bailout needs in line with expectations but well below reality.
2) German IFO business confidence falls to lowest since Feb ’10.
3) Euro zone Economic Confidence falls to 3 yr low.
4) Aug Durable Goods orders fall sharply mostly due to nondefense aircraft orders. Ex transports still down and while non defense cap goods ex aircraft orders rise 1.1%, July revised to sharp 5.2% decline. Inventories to shipments ratio rises to most since Nov ’11.
5) Chicago PMI falls below 50 for 1st time since Sept ’09 at 49.7. New Orders fall to 47.4.
6) Aug Pending Home Sales fall 2.6% vs est of up .3%.
7) Aug New Home Sales total 373k, 7k less than est.
8) MBA said purchase apps rise just .7% and refi’s up only 3.3% notwithstanding record low rates.
9) Personal Income in Aug up just .1% m/o/m and down .3% after inflation. Savings rate falls to 3.7% from 4.1%, a 4 month low.

Category: Markets

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4 Responses to “Succinct Summation of Week’s Events (9/28/12)”

  1. Back on Memorial Day, the TRI short-term outlook suggested GDP would dwindle to 0% by the Election. With less than 6 weeks ’til Americans go to the polls, this projection still holds. Adding to the fray, my Debt Wall model projects Congress will again be handcuffed by its $16.4 trillion Debt Limit on Jan 8 2013.

    The current downturn does not appear to be a conventional inventory-inspired downturn of the business cycle. TRI finds animal-sprits-plus remain quite high and are in fact increasing. I believed this to be related to anticipation of regime change, but my current Race-for-the-White-House electoral college votes projection still indicate an Obama victory on Nov 6th.

    Today’s TRI projection infers BEA will be announcing Q3 GDP of -0.1% eleven days before the Election. Four days prior to voting day, BLS is likely to announce an 8.2% Unemployment Rate and dwindling job creation. The falling UR is a mirage. 518k souls left the labour force this Summer!

    TRI’s June warning of a horde of revenue misses and slashing of guidance remains remains intact and indeed has been extended to cover the next five months.

    Despite the TRENDLines Recession Indicator being at its worst level since the Great Recession, the mainly left-dominated media appears to have purged “double dip” from its on-air rhetorics albeit they took pleasure in those dire ad nauseum warnings thru 2009, 2010, 2011 & early 2012. It is indeed apparent they’re avoiding to report the collapsing numbers in order to protect “the chosen one”.

    But there will be good news in late November. The Senate’s gang-of-8 is back on the job and readying draft legislation for the lame-duck session to address the source of the uncertainty causing this GDP pause: Sequester, Bush-era tax cuts, payroll holiday, increasing Debt Limit & paring of entitlements.

    Debt Wall & TRI charts: http://trendlines.ca/free/economics

  2. AHodge says:

    talk about negative Romney coattails
    Tommy Thompson former WIS governor
    ahead in the open senate seat race
    is now behind following the R convention.

  3. 10x25mm says:

    To the ‘Negatives’ column you should add the rise in RBOB gasoline prices. From Reuters:

    “The RBOB gasoline future contract for October delivery jumped by more than 27 cents to above $3.40 a gallon in thin trade late on Friday, taking front-month prices to the highest level since March.

    Inventories of gasoline in the five states around New York Harbor, delivery point for the benchmark gasoline contract, have fallen to the lowest level on record, data from the U.S. Energy Information Administration showed on Wednesday.”

    http://www.reuters.com/article/2012/09/28/rbob-surge-idUSL1E8KSD0A20120928

  4. 10×25, residual high petroleum costs trimmed 0.8% off GDP growth in September. This up from the 0.5% damping in June, but way down from the 1.6% headwind back in April 2011.