Weekly indicators: summer doldrums edition

  - by New Deal democrat The monthly data for July released last week was almost all quite positive. Retail sales, industrial production, capactity utilization, and housing permits all rose quite strongly. Consumer sentiment rose slightly. As a result of permits, the Conference Board's Leading Index increased, exactly reversing June's decline. Consumer prices did not rise at all. Producer prices rose +.3. The only significant negative news was that both the Empire State and Philly regional manufacturing indexes both contracted....

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Not good enough

- by New Deal democratThree years ago I was arguing with Doomers on Daily Kos who thought that, as awful as things were, they were only going to get worse and worse as we fell into the bottomless abyss, quoting Zero Hedge and The Automatic Earth as gospel scripture that we were going to 25% unemployment and 1000 on the Dow Jones Indsutrial Average. Since then, I've countered the double-, triple-, and quadruple-dippers who have mistaken every spring slowdown for vindication. Over the last 9 months or so, I seem to have become the poster child...

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Stagnating wages are hurting the economy RIGHT NOW

- by New Deal democrat The global economic weakness that has intensified as this year has progressed has greatly tamped down inflation. If wages were growing at a reasonable rate, this would help jump-start demand. But wage growth has been declining for years, and is considerably worse than even during the Great Recession. As a result, even...

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Morning Market Analysis

The entire treasury curve continues its move lower.  All sectors have broken upward sloping tend lines and have bearish MACD formations.  Money is flowing out of the markets and volatility is increasing.  The next logical target is the 200 day EMA on the TLTs.The SPYs have moved to a six month high.  Momentum is rising, the...

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Finland Preparing For Eurozone Breakup

Erkki Tuomioja, Finland's Foreign Minister, has stated that Finland is preparing for the breakup of the Eurozone. He is quoted in the Telegraph:"Our officials, like everybody else and like every general staff, have some sort of operational plan for any eventuality."He wisely and honestly notes that the end of the Eurozone does not mean the end of the EU. Other politicians in the Eurozone would have us believe that the end of the Euro will sound the death knell for the EU, this is of course scaremongering nonsense.Kudos to Mr Tuomioja for...

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Bonddad Linkfest

The ugly presidential campaign (WaPo)US industrial production increases (FRB)Malaysian growth picks up (BB)FDI declines in 8 of the last nine months in China (BB)Brazilian unemployment still low despite slowing economy (FT)Despite evidence, farmers think warming temps are act of God (FT)Grain prices shouldn't impact overall CPI (Alphaville) Global growth stuck in twilight zone (Alphavil...

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Dude, where's my recession? Housing and Initial jobless claims

- by New Deal democratTwo piece of economic data released this morning make it considerably harder for bears to argue that we are slipping into, let alone already in, a new recession. Housing permits rose to 812,000. This is the first time over 800,000 and the highest level in 4 years. Permits have risen over 200,000 on an annualized basis over...

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Coincident economic indicators rise

  - by New Deal democratWe now know the values for July for 3 of the 4 indicators that the NBER uses to mark economic peaks and troughs.Nonfarm payrolls were reported up 163,000 for the month.  Further, their YoY growth has been acceleratiing slightly a compared with earlier this year.This morning Industrial production was reported at +0.6....

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Morning Market Analysis: Long-Term Europe Edition

The weekly Spanish chart shows the market may be making a bottom.  First, notice the depth of the sell-off; prices moved from 40 to about 21 for a drop of almost 50%.  However, prices have twice attempted to sell-off to the 20/21 area.  Also note the first sell-off was done on much higher volume than the second. The Italian market...

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Liborgate

Liborgate, despite the brief interlude provided by the chaff from the DFS over Standard Chartered, rumbles on.The BBC reports that seven banks (HSBC, Royal Bank of Scotland Barclays, Citigroup, Deutsche Bank, JPMorgan and UBS), are to be questioned in the US for alleged Libor manipulation.The US authorities will look to see if there is sufficient evidence to support a criminal prosecution.The coming weeks will see much behind the scenes haggling between the banks, the regulatory authorities and governments, in order to avoid this going to court....

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Bonddad Linkfest

A top for treasuries? (Marketwatch)The euro is already a zombie currency (Marketwatch)US retail sales up .8% (Census)US PPI up .3% (BLS)US CPI unchanged (BLS) UK unemployment hits lowest in a year (FT)Greece seeks extension (FT)An analysis of Bain's investments (BP) Data Dump (Tim Duy) ...

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#Grexit Next Month?

I see that with the depressing inevitability of the return of an unloved season, there is renewed speculation (which frankly has never gone away) that Greece will exit the Eurozone possibly as early as next month.CNBC quote Paul Day, Chief Strategist, at Market Securities:“It’s a question of when, not if. Next month there is the ratification of the ESM [European Stability Mechanism] in Germany and you may well see a situation where Greece leaves the euro, the ESM is ratified and Spain and Italy then go in and ask for the money. There...

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Will We See Second Half Improvement, Part III; Housing

Let's continue our look at the possibility of a second half rebound by looking at housing.  We'll first look at new home sales, which account for a small portion of the real estate market.Look at the data from the long term perspective, new home sales are still at very low historical levels.  HoweverNote the increase over the last 9 months,...

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Morning Market Analysis

The entire grains complex is still at elevated levels.  Corn and soybeans are still trading in a sideways pattern while wheat has moved lower, with prices targeting the 50 day EMA.  Considering the USDA recent downgraded the US crop estimate again, I would use the sell-offs as a buying opportunity.The euro is in a downward sloping channel,...

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Bonddad Linkfest

Will the Ryan choice pay off?  (WaPo)GOP operatives fret over Ryan pick (Politico)Minutes of June 11th and 12th Monetary Policy Meeting (BOJ)German GDP increases .3% Q/Q (German Statistics Bureau)EU GDP contracts .2% Q/Q (Eurostat)EU industrial production contracts (Eurostat)Currency flows are reversing (BB)India's Inflation at 32-month low (BB)Labor productivity verses demographics (Alphaville)Still waiting on looser lending standards (Alphavil...

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Will We See Second Half Economic Improvement? Pt. 1

Last week, the Washington Post ran an article titled, Economy Might Be Gaining Traction, New Data Suggest.  The article highlights recent developments in exports, housing and employment as the reasons for enthusiasm.  This week, I'm going to look at some of the points made in the article to see if they're valid.Let's continue with exports:The...

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Morning Market Analysis

After moving through upside resistance, the Chinese market hit the 200 day EMA and has since sold off to the 10 day EMA.  However, the price bars on the chart are quite moderate; they look like a standard, profit-taking sell-off rather than a panic sell.  Also note the underlying technicals are still solid: the MACD is rising, the CMF shows...

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Spain Looking For Another Bailout

It seems that Spain (unsurprisingly) is looking for another bailout.According to Spanish Economy Ministry sources quoted by La Vanguardia, Spain could make a formal request for the early disbursement of €30BN from its bank rescue package this Thursday or Friday.The money, apparently, will be used to help Bankia and other nationalised savings ban...

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Bonddad Linkfest

The Ryan plan analyzed (hint -- it doesn't add up) (Econbrowser)The Heritage Foundations questionable analysis of the Ryan Plan (BP)The Ryan Plan and the Fallacy of Say's Law (Bonddad)Hedge funds abandon European shorts (BB)Japanese GDP slows (Japanese Statistics Bureau)Russia puzzles investors with privatization plan (Marketwatch)US economy downshifting, but not stalled (Marketwatch)G20 plans response to rising food prices (FT)Corn hits record after crop cut (Agrimon...

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Trends in hiring vs. firing, employment vs. jobless claims

Last week, the Washington Post ran an article titled, Economy Might Be Gaining Traction, New Data Suggest.  The article highlights recent developments in exports, housing and employment as the reasons for enthusiasm.  This week, we'll be looking at some of the points made in the article to see if they're valid.  NDD wrote this piece...

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Morning Market Analysis; Are We Really Breaking Out?

Last week, the big news was the sell-off in the treasury market.  I've previously written that so long as the treasury market was rallying, the equity markets would have a difficult time rallying.  So, now that we're seeing some flows from the treasury market, let's see if they're moving into the equity market.Prices have moved through resistance...

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Bank of England Clueless

Unfortunately, it appears that according to former MPC member Danny Blanchflower:"The MPC didn't know where the economy had been, didn't know where it was when they made the forecast, and had no clue where it was going and still doesn't."The  most alarming question that arises from the above is that, if the Bank of England (which has been relatively proactive in trying to reboot the economy) is so clueless, what does that say about the ECB?...

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Some Points Just Aren't Debatable

The policy paper issued by the Romney campaign has received a rather harsh reaction since its release.  Brad Delong provided the most well-researched and in-depth response (which should probably be called a very thorough smack-down), but there were others (see here and here).Most telling, a reporter contacted the economists cited in the report...

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Morning Market Analysis; Bonds Finally Selling Off

The 60 minute charts of the major sectors of the treasury market show that prices have moved through support and are all now in downward sloping channels.We also see it in the daily charts, all of which have bearish characteristics: declining MACDs, declining shorter EMAs (the 10 and 20), weakening RSIs and declining CMF readings.The point of the above...

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