Posts filed under “Think Tank”

Industrial Production

July Industrial Production rose .5%, .1% more than consensus and it’s the first gain since Oct ’08. Capacity Utilization rate was 68.5%, .2% more than expected, up from 68.1% in June and rose also for the first time since Oct ’08. The rise in IP was led by a 20.1% gain in auto production as GM and Chrysler plants came back on line after shutdowns in the previous few months. Even with the gain, motor vehicle/parts production is still down 31.6% y/o/y so there clearly is room for further increases that will lend support to Q3 GDP. To quantify, manufacturing production rose 1% but gained just .2% ex motor vehicle and parts. Computer/electronics production rose .6% while machinery fell by .5%. Due to the unseasonably cooler weather in July, utility output fell 2.4%. Historically, IP is never market moving on the day of release but the importance of auto production to the 2nd half recovery theme is big and thus this data grows in relevance.

Category: MacroNotes

At this point, what the market wants is different than what the Fed

The key CPI report is expected to be flat m/o/m but down 1.9% y/o/y, the biggest decline since 1949. The core rate though remains sticky and is expected to rise .1% m/o/m and 1.6% y/o/y. While the markets want inflation to be in line to less than forecasts because it will keep the Fed with…Read More

Category: MacroNotes

30 year auction

The 30 year bond auction was good as the yield was a touch below where the when issue was trading right before and the bid to cover of 2.54 was above the average seen this year of 2.32 and the 2nd highest going back to May ’08. Indirect bidders totaled 48.1%, about the same as…Read More

Category: MacroNotes

The FOMC Meets: Actions Speak Louder Than Words

Jim Bianco on FOMC Actions The Financial Times – Short View: Fed’s exit strategy Nobody is expecting the Federal Reserve to change its target Fed funds interest rate on Wednesday. It will remain at 0.25 per cent after the federal open market committee meets. But there has been a flurry of speculation that the Fed…Read More

Category: Federal Reserve, Think Tank

Business Inventories

June Business Inventories fell 1.1%, .2% more than expected and May was revised lower by .2% to a drop of 1.2%. Because sales rose by .9%, the inventory to sales ratio fell to 1.38 from 1.41 and is at the lowest level since Oct ’08 when it was 1.36. In addition to the drop in…Read More

Category: MacroNotes

Retail Sales and Jobless Claims

July Retail Sales unexpectedly fell .1% vs an expected clunker led gain of .8%. Ex auto’s, sales fell .6% vs an expected gain of .1%. Ex auto’s and gasoline, sales fell .4% vs forecasts of flat. Motor vehicles, parts sales rose a strong 2.4% due to the clunker plan but it seems that the spending…Read More

Category: MacroNotes

How much does free money work?

The first quantification of the impact that the stimulus of free money has on a particular sector comes out at 8:30 when July Retail Sales are reported and we see how much auto sales rose. Sales are expected to rise .8% but ex auto’s they are expected to rise just .1%. Jobless Claims, also of…Read More

Category: MacroNotes

An Update on the “Mini-TARP Employee Bonus Pool” Idea

Good Evening: Since Monday’s commentary, U.S. stocks have swooned and jumped without much to show for it. Sure, they went down by more than 1% on Tuesday and up by a similar amount today, but the major averages are just about back to the closing levels posted on Monday. Yesterday’s retreat was in part blamed…Read More

Category: Markets, Think Tank

Was China tipped off to what the FOMC will say ahead of the 10 year

Ahead of both the 10 year auction from the Treasury and the FOMC statement from the Fed, I wonder if the Fed tipped off the Chinese on what they will say in terms of either extending or just fulfilling the existing program of buying US Treasuries. China of course being the biggest foreign holder has…Read More

Category: MacroNotes

Lotta stuff going on

The FOMC tells us what they are thinking at 2:15pm and all eyes are on whether they extend their purchases of US Treasuries past the expiration of the plan in Sept. On March 18th they introduced this new form of QE and since then, 10 yr bond yields have risen from 3% to 3.67%, the…Read More

Category: MacroNotes