Market Summary Japan unemployment rate falls to a 21 year low Japan Household spending continues to decline Japan retail sales fall 0.20% UK mortgage approvals fell in July Germany headline inflation flat on month over month basis German HICP lower at 0.30% in August Today’s Economic events Japan household spending y/y -0.50% vs. -1.30% Japan unemployment rate 3.0% vs. 3.10% Japan retail sales y/y -0.20% vs. -0.90% Australia building approvals m/m 11.30% vs. 0.0% German import prices m/m 0.10% vs. -0.10% Spain flash CPI y/y -0.10% vs. -0.50% UK Mortgage Approvals 61k vs. 63k UK M4 money supply m/m 1.20% vs. 1.20% Germany CPI m/m 0.0% vs. 0....
Why the tough talk out of one side of her mouth and ‘other policy tools’ language out of the other (ref. Yellen Lays Out Tools… )? Oh, I don’t know. Maybe it has something to do with this… The stock market has merrily followed money supply aggregates upward since 2009. When money supply decelerates the market corrects. When money supply ramps upward the market ramps upward. Money supply has been rolling over since 2014, which was not coincidentally when the first tremors began for the stock market in its recently completed top (that wasn’t). From SlopeCharts… But something is out of whack here. Let’s dial i...
Dear Fed, We have come to a point in time where you are causing more harm than good. For decades, your role as not only the central bank to the US, but to the entire financial world helped ensure confidence in a fiat economy. Central control of a nation’s monetary system is undoubtedly an incredibly important role. You know this. After all, you were created in 1913 in response to systemic banking crises and failures in the years prior. You were created to prevent crises from happening. Damage control was always key to your central mission from the very start, achieved through the “dual mandate” of maximizing employment and sta...
The non-seasonally adjusted Case-Shiller home price index (20 cities) year-over-year rate of home price growth slowed from 5.3 % to 5.1 %. However, the index authors stated “home prices have risen at a consistent 4.8% annual pace over the last two years without showing any signs of slowing”. Analyst Opinion of Case-Shiller HPI Recently, there has been an almost insignificant slowing of the Case Shiller HPI year-over-year growth. Many pundits believe home prices are back in a bubble. Maybe, but the falling inventory of homes for sale keeps home prices relatively high. I see this a situation of supply and demand. 20 city unadjusted...
The market recognizes that the indication by the FOMC at the end of last year that four rates hikes in 2016 may be appropriate was far from the mark. At the same time, investors are coming around to the prospects that the Fed is not one and done either. A key issue for investors and policymakers is what is the terminal rate for Fed funds. This terminal rate is what economists call the natural or neutral interest rate. It is the rate that is consistent full employment and capacity utilization and stable prices. In June, the Fed’s dot-plot pointed to a long-term equilibrium rate (natural or neutral rate) of 3%. It has been stea...
The Banking Index closed at 71.61 with the C-RSI at a good positive level of +10.43. The Banking Index was above its support line and its Accelerator was positive with an up tick. The Timing Indicator was in positive territory and merged+. The Banking Index was in a high risk up condition that started March 1st. What’s helping? High levels of Inflowing Liquidity have been a plus for the market and have helped mitigate downside movement while recent stress levels have been high. Our economy needs a strong banking system to keep functioning properly, so it is important to keep the Banking Index on one’s radar....
In November of 1863, Lincoln said that: “The government of the people, by the people, for the people… Oh, not you. Or you, or you, or you, or you, maybe that guy with the nice hat, no, not you, or you, not you either, maybe you…“ They edited some of that out but clearly our first Republican President’s (back when Republican meant a rejection of the aristocricy, not the worship of it) selectivity was taken to heart as the wealth of the top 10% has more than doubled in the last 30 years while the rest are, of course, flat or down (because where do you think they took the wealth from?). The above chart is from the CBO...
Headquartered in Winchester, VA, American Woodmark Corporation (AMWD) is a leading manufacturer and distributor of kitchen and bath cabinets for remodeling and new home construction markets. The company manufactures cabinets under four major brands: American Woodmark, Timberlake Cabinetry, Shenandoah Cabinetry and Waypoint Living Spaces and sells more than 500 cabinet lines in a wide variety of design materials and finishes. Their products are sold through a network of independent dealers and distributors, and directly to major builders, Lowe’s and The Home Depot. Excellent Quarterly Results The company reported its fiscal f...
Technical Outlook: S&P 500 (SPX) rallied back into the range high resistance yesterday, and potentially nullifying the pullback opportunity the market was looking going into the week. SPDRs S&P 500 (SPY) volume dropped off yesterday from the previous day’s above average reading. Now it is in line with what what we have seen over the past week. On the 30 minute chart of SPX, there is a clear downtrend in place that has yet to be broken with lower-highs and lower-lows. USD/JPY continues its rally via BoJ intervention. Up another 0.5% this morning. The 5-day, 10-day and 20-day moving averages are all separated by les...
The Pound Sterling edged lower against the US Dollar as it appears the monetary policies for the UK and the US central banks clearly are on diverging paths. Investors have expectations that the Bank of England is likely to once again lower its benchmark interest rates while the Federal Reserve Bank looks to possibly hike rates by the end of 2016. Two key members of the US Federal Reserve, specifically Janet Yellen and Stanley Fischer, recently laid out their arguments for an imminent rate increase which has given the greenback a broad boost. Investors now have a rate hike priced in at around 55% by year’s end. As reported at 10:43 am (BST) ...