Posts filed under “MacroNotes”

CPI benign? Not for many.

Consumer inflation in Oct rose .1% headline m/o/m and .2% core. The headline figure was in line with estimates but the core rate was .1 of a % higher. The y/o/y gain headline is 2.2%, the highest since April and is above the 1.6% avg hourly earnings gain seen in Oct and is a clear squeeze on many. The core rate was up 2% y/o/y. The .2% decline in energy prices was offset by a .2% gain in food. Owners Equivalent Rent, 24% of CPI, was higher by .2% m/o/m and 2.1% y/o/y and Rent of Primary Residence was up by .4%, the biggest m/o/m gain since Nov ’07. Apparel prices were higher by .7%. New and used vehicle prices were lower. Medical care costs were flat as were commodity prices. Bottom line, on a seasonally adjusted basis, the CPI index went to another all time high and is up 2.2% y/o/y, a 6 month high. I continue to state the absolute index level in addition to the rate of change because many Americans are not seeing their highest income ever just as we’re seeing the highest cost of living ever. With consumer spending about 70% of growth, it obviously is important.

Category: MacroNotes

Europe/Japan,China/bears

Notwithstanding a slightly better than expected Q3 GDP print for Germany and France, the euro zone economy contracted in Q3 as forecasted. Q3 GDP for the region fell .1% q/o/q, the 3rd q in the past 4 of declines. At the same time, CPI rose 2.5% y/o/y in Oct, remaining above the 2% ECB target…Read More

Category: MacroNotes

FOMC minutes, QE4 soon to come

Noteworthy in the Oct FOMC minutes was the discussion on the effects of the Sept announcement of QE3. They said “the initial effects were generally viewed as consistent with a marked easing in financial conditions. For example, yields on MBS dropped noticeably, leading to a decline in mortgage interest rates, and corporate bond yields generally…Read More

Category: MacroNotes, Think Tank

MBA/Japan/Europe

After 5 weeks in a row of declines totaling 28%, notwithstanding historically low mortgage rates, the MBA said refi apps for the week rose 13.1% to a 4 week high. Purchase apps rose 11% also to a 4 week high. With the stabilization in housing a bright spot, albeit off dramatically low levels, lets hope…Read More

Category: MacroNotes, Think Tank

Retail sales and PPI

Retail Sales in Oct were soft as the core rate, taking out autos, gasoline and building materials, fell .1% m/o/m vs expectations of a gain of .4%. Building materials fell by 1.9%, autos/parts were down by 1.5%, electronics were lower by 1%, furniture sales fell for a 3rd month, clothing sales fell by .1%, department…Read More

Category: MacroNotes

Greece/Germany/Asia/US small biz

Markets this morning are worried about how European officials plan on further funding Greece with extra money to bide them over for a few more years. The EU is completely unrealistic in thinking they can pull this off without taking any losses on their debt holdings while the IMF on the other hand understands that…Read More

Category: MacroNotes

Until an agreement, it’s headline watching time again

As we’ve been all well trained (and annoyed) with the art of politician newswire headline watching throughout Europe over the past few years as they grappled with Greece, Ireland, Portugal, Spain, etc…hopefully we’ll be ready for the barrage of US political sound bytes and opinions on how to come to an agreement between Dems and…Read More

Category: MacroNotes, Think Tank

S&P’s kissing their 200 day MA

We start the day with the S&P futures basically kissing its 200 day moving average of 1369, thus making the action from here a key focus of every technician. The theme of European economic weakness and our own fiscal issues at the same time US earnings are no longer growing for now remains intact. We…Read More

Category: MacroNotes

My market diary

Review of my personal market diary over the past few months: 1)The Fed, ECB, BoE, BoJ and SNB will continue to print huge amounts of money, CHECK. 2)Earnings growth globally is slowing with GDP and we’ve seen the peak in profit margins, CHECK. 3)Election is over, DC doesn’t change, taxes are going up at exactly…Read More

Category: MacroNotes

Monetary policy and the election

The direction of monetary policy depending on who wins today’s election has been an important discussion with an Obama win expecting to have no impact and a Romney win expected to alter the focus. As an Obama victory will just give us more of the same, I wanted to give a quick opinion on what…Read More

Category: MacroNotes