Succinct Summations week ending August 2, 2013.

Positives:

1. S&P 500 crossed 1,700 for the first time ever.
2. U.S. jobless claims fell 19k last week to 326k — lowest level since January 2008!
3. U.S. GDP grows 1.7% (annualized) in Q2 v 1% expected. 2012 GDP revised to 2.8% from 2.2%;
3. ADP employment for July came in at 200k v 188k expected.
4. U.S PMI rose in July to 53.7 v 53.2 expected.
5. Chinese Purchasing Madeup Index comes in just above expansionary territory at 50.3 v 49.8 expected.
6. Good European PMI as Germany rises to highest levels in 18 months, France rises for the first time in 17 months, Italian PMI signals first expansion (50.4) since July 2011!
7. ISM manufacturing index rose to 55.4 in July, up from 50.9 in June, highest levels since 2011.
8. June pending home sales fell to -0.4%, but better than expected (-1%).
9. Euro-area unemployment rate unchanged at 12.1%, still very high but seems to be stabilizing.
10. U.S. July unemployment fell to 7.4% from 7.6% in June.
11. Ford truck sales increased 22% y/o/y and are at the highest levels since 2006.

Negatives:

1. US GDP in Q1 was revised down to 1.1% from an initial reading of 1.8%.
2. U.S. non-farm payrolls rose 162k in July, v 184k expected, should put the taper on hold, for now
3. Hourly earnings rose just 1.9% v 2.2% expected.
3. Exxon, the biggest energy company in the world posted its biggest quarterly miss since 1999.
4. U.S. MBA’s mortgage application index declined fell 3.7% to a two-year low (7th consecutive week of declines).
5. Consumer confidence slips to 80.3 v expectations of 81.3.
6. The Aussie falls to the lowest levels against the U.S. dollar since 2010 (PMI sinks to 42, not good).
7. Abenomics not enough? Japan industrial output -3.3% m/o/m v expectations of -1.5%.
8. Japan July PMI came in at 50.7 from 52.3 a month earlier. Employment fell for the first time in 3 months.
9. Ford, GM and Chrysler U.S. auto sales all missed expectations in July.

Thanks Mike!

Category: Markets

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3 Responses to “Succinct Summation of Week’s Events (August 2 2013)”

  1. 10x25mm says:

    Did anyone notice the 13.5% drop in motor vehicle gasoline consumption from April to May which was reported by the U.S. Energy Information Agency yesterday?

    http://www.eia.gov/dnav/pet/pet_cons_refmg_d_nus_VTR_mgalpd_m.htm

    The 24.8 MM gallons per day reported is the lowest reported for this data series since its inception in 1983, and the trendline has been relentlessly negative since the beginning of the Great Recession. It is a 19.5 % drop YoY. Even the ultra low sulphur diesel fuel used by over the road trucks dropped 8.6%, something we just haven’t seen recently:

    http://www.eia.gov/dnav/pet/pet_cons_refoth_d_nus_VTR_mgalpd_m.htm

    This is an incredible drop, given that we are heading into the summer driving season. It might explain Second Negative Number 3, XOM’s poor quarterly performance.

  2. rd says:

    On car sales,driving miles, household formation, and mortgages:

    I have four kids. The oldest has been out in the work force since mid-2009 (not a good time to graduate) and lives in a major city. Lives in an apartment (@300 sf), does not have a car and has no plans to get a car. If he needs a car, he rents one or uses Zip-Car. 95%+ of trips are by foot, bike, or mass transit. Does not buy a lot of furniture etc. since there is nowhere to put it.

    Another one has just graduated and will also be living in a small apartment in a major city. Will not have a car and has no plans to buy one. 95%+ of trips are expected to be by foot, bike, or mass transit.

    Another kid is working, has a car but is living at home to save money. So no mortgage coming from there in the near future.

    The fourth is still at school. Who knows?

    In sum, don’t expect the same level of vehicle and household purchases from this generation. As boomers retire, don’t be surprised if they are down-sizing their vehicle purchases as well since they won’t have the income to support multiple vehicles in retirement.

  3. jbegan says:

    2. U.S. jobless claims fell 19k last week to 326k — lowest level since January 2008!
    3. ADP employment for July came in at 200k v 188k expected.

    Wouldn’t it be nice if these numbers were reported not as absolutes each week, but as a moving average?