Succinct Summations week ending July 11th

Positives:

1. Despite a nasty opening on Wednesday, the S&P 500 is less than 1% away from its all-time high.
2. Japanese consumer confidence rose to 41.1 from 39.3, the highest of the year.
3. Average gas price is down to $3.64, the lowest levels since April
4. The Fed announced they will end their taper in October with a $15B reduction in stimulus.
5. Initial jobless claims fell to 304k, down from 315k last week and below expectations.
6. AAII bearish sentiment had the biggest one week increase since April, working off some froth is healthy.
7. Job openings in May increased to 4.63M from 4.46, the most since June ’07.
8. MBA home applications rose 3.7% w/o/w

Negatives:

1. Troubles with Banco Espirito Santo (Portgual)  spooked the market on Wednesday, the S&P had its largest gap down since early March, the Russell 2000 had the largest gap down since ’12.
2. German exports drop 1.1% in May m/o/m, more than the estimate of down .4% and April is revised lower
3. Baltic Dry Index
4. Japanese machinery orders cratered 19.5% m/o/m
5. NFIB small business optimism index fell to 95 from 96.6
6. Student loan debt outstanding in rose to yet another record high in May.

Thanks, Batman

Category: Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

6 Responses to “Succinct Summation on Week’s Events July 11 2014”

  1. spencer says:

    Interesting how tapering has been met by a drop in bond yields — the 10 year yield fell from some 3.0% at the end of 2013 to about 2.50% now.

    Now how does that support the argument that the Fed is keeping interest rates too low?

    • ilsm says:

      Seems the amount of money looking for interest bearing notes prefers treasuries to other notes.

      Lots of cash still.

      While US unified deficit will be 3.4% GDP this year as revised this week.

    • RW says:

      It doesn’t but then there was never a serious case for the argument that the Fed is keeping interest rates low in the first place.

      The Fed has great control over the short end of rates of course and it’s pretty direct too but the long end is not under direct Fed control and primarily projects market expectations regarding strength of future economic growth; that story hasn’t changed for some time now and, if secular stagnation is real, it won’t change for some more time either.

      Folks who blame the Fed because they aren’t getting enough interest income should be focusing on fiscal policy and the cruel folly of deficit reduction obsession in an era of slower growth.

      We should be increasing the deficit, not shrinking it, but a lack of investing and macroeconomic knowledge on the public’s part coupled with a terminally venal political class and a news media incapable of accurately informing their audience assures we will stay pretty much where we are. Pity.

  2. airok says:

    Tax receipts are higher with tax rates up and less available loss carry forwards due to broad based long recovery. Treasury’s issued decreased more than the taper. ISI had a nice chart on this. Quantitative easing was $55 billion in April while the deficit was $41 billion.

  3. Robert M says:

    BR
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