Posts filed under “MacroNotes”
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 and that there is still an underlying belief that some sort of a deal, whether good or bad, will be hashed out as no one wants to see tax rates go up on the middle class (putting aside one’s belief on the top 2%).
Elsewhere, the apparent stabilization in the economic data coming out of China has done nothing to assuage the concerns of A share investors (H share investors have been more positive). The Shanghai index closed down for the 5th day in the past 6, by another 1% to the lowest level since Jan ’09. This even though the state enterprise weighted mfr’g PMI rose to 50.6 from 50.2 (est 50.8) to the best since April. The HSBC final mfr’g figure was little changed with the preliminary and the services index rose to 55.6 from 55.5, a 3 month high.
In Europe, following the EU blessing last week to release funds to the Spanish banking system, today Spain is officially asking for it with BN reporting that Dec 12th is when funds should be made available. The disbursement is as expected. What is still a mystery is if and/or when Spain the sovereign asks for help which for now them seem loath to do. The Greek stock market is up 1.5% after they gave details on their bond buying program. It’s sending the bond maturing Feb 2023, up a sharp 10% (which of course makes the buyback more expensive).
“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
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
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
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
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.
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.
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
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
China’s economy continues to show signs of stabilizing as the private sector weighted HSBC flash mfr’g PMI rose to 50.4 in Nov from 49.5 in Oct. It’s the 1st time since Oct ’11 above 50 but the Shanghai index is actually down a touch over the past two days with the number reported Wed night….Read More