Succinct summation of week’s events:

Positives:

1) US Sept Retail Sales rise more than expected almost across the board.
2) Housing starts and Permits in Sept well above estimates.
3) Months supply of existing homes falls to 5.9 from 6, the lowest since Mar ’06 as Sept sales total 4.75mm, the 2nd highest since the tax credit boosted month in May ’10 and homes for sale fall to lowest since Mar ’12.
4) Purchase apps up just .9% but higher for 4th week.
5) Philly mfr’g positive again at +5.7 after 5 straight mo’s below zero but components very mixed.
6) Initial Claims normalize last week’s distorted figure with a 4 week avg near the lowest since mid Sept.
7) Moody’s keeps Spain’s credit rating IG, bonds rally on week even as Rajoy continues to drag his feet.
8) Greek stocks rally 5.5% on the week to the best level since Sept ’11 and bonds at new post exchange high.
9) German ZEW investor economic confidence 6 mo’s out the least negative in 5 mo’s.
10) UK unemployment falls to 7.9%, lowest since June ’11 with claims down in Sept.
11) Chinese retail sales, IP, FAI, M2, exports all better than expected and CPI moderates to 1.9%.
12) With room to do so, Thailand joins South Korea and cuts rates.

Negatives:

1) NY mfr’g in Oct remains below zero for a 3rd straight month at -6.2 vs -10.4 in Sept and est of -4.0.
2) Sept CPI rises .6% m/o/m to a new record high.
3) IP better than expected but prior month revised down and y/o/y gain of 2.8% matches lowest since Nov ’11.
4) According to Bankrate.com, avg 30 yr mortgage rate rises 10 bps on the week to 3.49%, obviously historically low but impact from Fed quickly ran its course with not much of a drop (8 bps).
5) Refi apps fall for 2nd week by 5.3%.
6) China’s Q3 GDP growth of 7.4% is slowest since Q1 ’09.
7) German ZEW current conditions component falls to lowest since June ’10.

Category: Markets

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2 Responses to “Succinct Summation of Week’s Events (10/19/12)”

  1. Back on Memorial Day, the TRI short-term outlook suggested GDP would dwindle to 0.3% by the Election. With less than 3 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 7 2013.

    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 7.7% Unemployment Rate. General job creation is finally exceeding the 99k required to offset the monthly rise of the labour force via graduation and immigration. When the UR dips below 7% (2018Q2 imho), the FOMC will commence to normalize its discount rates.

    TRI’s June warning of a horde of revenue misses and slashing of guidance remains remains intact. This environment will continue thru mid-February.

    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 may be at least some good news ahead. The Nov13 – Dec14 lame-duck session will most probably see introduction of the Senate’s gang-of-8 draft legislation addressing the source of the uncertainty causing this GDP pause: Sequester, Bush-era tax cuts, alternative min tax, payroll holiday, increasing Debt Limit & paring of entitlements. If they don’t just kick-the-can, the S&P will see a new record high in the ensuing days! If Romney wins, we’ll see it earlier…

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

  2. VennData says:

    Positive:

    Texas begins to nudge California out of first place in the “Weirdo stuff happens here” list in the view of NYT editors:

    http://www.nytimes.com/2012/10/20/us/fire-destroys-big-tex-icon-of-texas-state-fair.html