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Finance 0
April 2016 CPI: Inflation Little Changed
by Doug Short and Steven Hansen According to the BLS, the Consumer Price Index (CPI-U) year-over-year inflation rate was 1.1 % – an increase from last month’s 0.9 %. The year-over-year core inflation (excludes energy and food) rate declined 0.1% to 2.1 %, and remains slightly above the target set by the Federal Reserve. The market expected (from Bloomberg): month over month change Consensus Range Consensus Actual CPI-U 0.3 % to 0.5 % +0.3 % +0.4 % CPI-U less food and energy 0.1 % to 0.3 % +0.2 % +0.2 % As a generalization – inflation accelerates as the economy heats up, while inflation rate falling could be an indicator... -
Finance 0
E The Daily Shot And Data – May 17, 2016
Greetings, 1. Once again, let’s start with the United States where the New York area (Empire) manufacturing activity fell back into contraction mode The survey showed CAPEX expectations falling sharply. If we see similar results from other Fed regions, the manufacturing recovery in the US may take significantly longer than some have been expecting. 2. US homebuilder optimism remained unchanged in the latest report but the regional breakdown shows the Northeast sentiment deteriorating (while stable elsewhere). Source: ?@TheStalwart 3. The Atlanta Fed wage growth tracker is approaching 3.5% (year-over-year growth). Are we finally seein... -
Finance 0
Technically Speaking: Maybe You Should “Sell In May”
Last Friday the market closed below its 50-day moving average. Theoretically, such a close should have sent traders scrambling for cover Monday morning. As I noted in this past weekend’s missive: “While the long-term picture still clearly suggests a high level of risk aversion, short-term dynamics have improved which led to a small increase in equity exposure several weeks ago. As shown below, the market has continued to defend the 50-day moving average of the last week while in a corrective process, until Friday.” “While the market did violate the 50-dma on Friday, the market held support at recent bottoms. Critically, there is a... -
Finance 0
Housing Construction & Industrial Output Rebound In April
US housing starts and industrial activity posted solid increases in April, rising by stronger-than-expected rates last month. But the upbeat news is clouded by negative trends for the year-over-year data. In the housing sector, the change in tone on the downside is conspicuous—for the first time in 13 months, new residential construction and newly issued building permits fell relative to their respective year-earlier levels. Meanwhile, industrial output rebounded sharply in April, rising by a better-than-projected 0.7%. But the improvement wasn’t enough to reverse the red ink in the annual comparison. As a result, US industrial acti... -
Finance 0
Daily Market Digest: RBA Minutes, Inflation Numbers From US & UK
The Australian dollar erased some of its previous losses as RBA minutes showed that members were hesitant to cut rates. Meanwhile, inflation data from the UK disappointed while in the US inflation increased at the fastest pace since February 2013. Today’s Economic events RBA releases monetary policy meeting minutes Australia new motor vehicle sales m/ -2.50% vs. 2.20% previously New Zealand inflation expectations q/q 1.60% vs. 1.60% previously Japan revised industrial production m/m 3.80% vs. 3.60% Switzerland PPI m/m 0.30% vs. 0.10% UK CPI y/y 0.30% vs. 0.50%; Core CPI y/y 1.20% vs. 1.50% Canada manufacturing sales m/m -0.90% vs. -0.70% US... -
Finance 0
Gold Loses Upside Momentum, Vulnerable
Gold: Having lost its upside momentum to close on a rejection candle on Monday, further weakness is envisaged. On the downside, support comes in at the 1,265.00 level where a break will turn attention to the 1,260.00 level. Further down, a cut through here will open the door for a move lower towards the 1,250.00 level. Below here if seen could trigger further downside pressure targeting the 1,240.00 level. Conversely, resistance resides at the 1,280.00 level where a break will aim at the 1,290.00 level. A turn above there will expose the 1,300.00 level. Further out, resistance stands at the 1,310.00 level. All in all, gold looks to weaken fur... -
Finance 0
US Core Inflation Looks OK – USD Looks Strong
Prices advanced 0.4% in April 2016 m/m, slightly better than 0.3% expected. The rest of the figures met expectations with year over year figures reaching 1.1%. Core inflation rose 0.2% m/m and 2.1%. While this is slightly lower than last 2.2% in March, it is bang on expectations. Housing data looks a bit more positive. Compared with other developed economies, inflation is OK in the US. The US dollar is looking stronger with EUR/USD dipping under 1.13. USD/JPY stands out with an attempt to move above the triple top of 1.0950. Will the third try be a charm? The Fed has two mandates: jobs and inflation. Regarding inflation, the focuses more cl... -
Finance 0
Optimism Would Come Forward If Breakouts Happen Here
Over the past year, a few sectors (Transports, Bio-Tech, Banks and Russell 2000) have been weaker than the broad markets. For the broad market to move higher, “Risk On” traders/investors want these weak sectors, to start reflect some strength. Below looks at the patterns of these downside leaders. As you can see, each as created a series of lower highs since 2014/2015. Will the third time be a charm and these sectors break falling resistance? To help push the broad markets higher, these sectors need to start reflecting some strength/break falling overhead resistance. Each sector is testing a support zone at (1) above, not far below fal... -
Finance 0
Now Is Not A Normal Time: Central Banks Buying Piles Of Gold
These are not normal economic times. Interest rates have remained artificially low, plunging into negative territory in many places. Central banks continue to inflate the money supply with quantitative easing. Some policy-makers have even floated the idea of helicopter money. Worldwide money printing is reportedly approaching $100 trillion. There is no end to this crazy monetary policy in sight. This led billionaire investor Stanley Druckenmiller to recommend selling US stocks to buy gold. Well-known hedge fund manager Paul Singer said the recent surge in gold is just the beginning. And Bank of America said gold is entering a new and lo...
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