Posts filed under “MacroNotes”

ISM mfr’g back below 50

The ISM mfr’g index in Nov is back below 50 at 49.5, below expectations of 51.4 and down from 51.7 in Oct. It’s the lowest since July 09 and follows the two prior months above 50 which followed the three months before that which were slightly below. New Orders softened by almost 4 pts to 50.3 while Backlogs fell a touch to 41 from 41.5 but that is the lowest since Apr ’09. After the inventory build seen in the Q3 GDP data, mfr’g inventories fell 5 pts to 45, a 5 month low and inventories at the customer level fell 6.5 pts to the lowest since Dec ’11. The Employment component fell 3.7 pts to 48.4, the 1st time below 50 since Sept ’09. Also of note, Export Orders fell 1 pt to 47, remaining below 50 for a 6th straight month. Production, which follows orders, did rise 1.3 pts to 53.7 but will be tough to sustain if New Orders slow further. Prices Paid fell 2.5 pts to 52.5 but remains above the 6 month avg of 49.3. Of the 18 industries surveyed, just 6 reported growth with 11 seeing contraction and 1 seeing no change. The ISM said this, “Comments from the panel this month generally indicate that the 2nd half of the year continues to show a slowdown in demand; respondents also express concern over how and when the fiscal cliff issue will be resolved.” Bottom line, lackluster still defines the state of manufacturing due to the issues well known. However, we know the hurricane had a pronounced impact on the economies of the northeast as seen in the NY and Philly mfr’g regions. Today’s ISM unfortunately can’t break it out to give us a better feel for the rest of the country but we know from other regional survey’s separate from the Northeast that things are just so-so. Also, export orders are just 1/2 pt from the weakest since April. This all said, a deal in the fiscal negotiations, whether good or not, could add clarity that is certainly missing. The S&P 500 above 1400 is definitely betting on it.

Category: MacroNotes, Think Tank

Sunday morning/China/Europe

If the Sunday morning talk shows were one’s only guide post as an investor going into Monday, sell would be the call after Geithner said there will be no deal unless the top tax RATES go up and Boehner said the negotiations have gone “nowhere.” Luckily we know the talk shows are for the cameras…Read More

Category: MacroNotes

“If you give a mouse a cookie…”

“If you give a mouse a cookie, he’s going to ask for a glass of milk. When you give him the milk, he’ll probably ask you for a straw. When he’s finished, he’ll ask for a nampkin…” This children’s book which I read to my son about hundred times years back now reminds me of…Read More

Category: MacroNotes

EIGHT DAYS

The move higher this morning in the S&P futures takes it back to the 50 day moving average of 1416 on hopes that negotiations in DC are proceeding as hoped. We’ll get a deal and stocks will like it temporarily but I repeat my belief that it won’t be a good one in terms of…Read More

Category: MacroNotes

New Home Sales light vs expectations

New Home Sales in October totaled 368k, 22k less than expected and Sept was revised down by 20k to 369k. Sales were last above 400k in April ’10 when the home buying tax credit goosed results. Sales fell by 10k in the Northeast but its unlikely it captured the storm at the end of the…Read More

Category: MacroNotes, Think Tank

NI CONGRESS

NI CONGRESS. Unfortunately that was my first input today on my Bloomberg to see what comment was made by some US politician depending on what side of the bed he or she got out on. This page will have to be up on my computer all day, everyday until a deal is finally announced on…Read More

Category: MacroNotes

Consumer Confidence best since Feb ’08.

The Conference Board Consumer Confidence # for Nov was 73.7, about in line with expectations and up modestly from the 73.1 print in Oct. It’s the best since Feb ’08 and the improvement is most seen in the answers to the labor questions where those that said jobs were Plentiful rose to 11.2, the most since Sept ’08. Those that said jobs were Hard To Get were unchanged but held at the lowest since April. Also of encouragement, those that plan to buy a home within 6 mo’s rose 1.5 pts to 6.9. the highest on record. Those that plan to buy a car/truck fell .7 pts. Also of note, those that plan to buy a home appliance such as a fridge, tv, or air conditioner rose to a new high. One year inflation expectations ticked lower to 5.6% from 5.8%, a 4 month low, consistent with the lowest gasoline prices since July. Bottom line, November confidence, depending on where you live and who you voted for, captured a lot of mixed emotions and still held at multi year highs. What this means for actual holiday spending remains to be seen but the mood for now is ok. I say just ‘ok’ because confidence is still below the 10 year average of 77.0 and the 20 year average of 93.1.

 

Richmond mfr’g bucks trend
Following negative readings in the NY, Philly and Dallas mfr’g surveys, the Richmond Fed said its region saw a jump from -7 to +9 which was well above expectations of -9. New Orders rose to +11 from -6 and Employment went to +3 from -5 with little change in the Workweek. Backlogs though fell 6 pts to -9. Both Prices Paid and Received were lower. The 6 month outlook rose for shipments, new orders, backlogs and cap ex. Bottom line, with just the KC, Milwaukee and Chicago mfr’gs reports to be seen this week before next week’s national ISM release, today’s # gives hope that we can see an above 50 print in the ISM. This said, the Richmond survey is very volatile as while Nov was +9 vs -7 in Oct, Sept was +4, Aug -9, July -17, June -1 and May +3.

 

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Category: MacroNotes, Think Tank

Durable Goods surprise to upside

Durable Goods Orders in Oct were better than expected as the headline figure was unchanged with Sept, up 1.5% ex transports and higher by 1.7% in the non defense capital goods ex aircraft component vs expectations of down .7%, .5% and .5% respectively. Sept was revised down however but only by .3-.4%. Helping to keep orders positive were gains in electrical equipment, computers/electronics, machinery and metals. Vehicles/parts orders though fell 1.6% and are lower for a 3rd straight month. From a strict GDP perspective, overall Shipments fell .6% but the core level of shipments didn’t fall as much as expected. As inventories rose by .4%, the I/S ratio rose to 1.69 from 1.67, the highest since Oct ’09. Bottom line, after very sluggish growth in the previous 4 months, it’s good to see a rebound in durable goods orders in Oct in the search for stability but in the core cap ex component, orders are still down 7% y/o/y and lower by .1% y/o/y ex transportation orders, reflecting the recession in Europe, slowdown in Asia, and the lack of policy visibility in the US. From a market perspective, all eyes remain on DC.

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Category: MacroNotes, Think Tank

Greece again buys time/Shanghai index/Fed’s Fisher

European officials in conjunction with the IMF finally came to an agreement to try to lower Greece’s debt to GDP ratio to 124% by 2020 from about 190% expected next year. The details on how to achieve it, that being a debt buyback, lowered interest rates and delayed payments of them and give back of…Read More

Category: MacroNotes

Spain/Greece/confidence/horse trading

With eyes remaining on Spain on whether and when they’ll ask for ECB bond buying help (the EC already blessed its bank bailout), the election over the weekend in the Catalonia region was a focus. The main question in which politicians were voting for was for the region to secede or not to secede from…Read More

Category: MacroNotes