Global Macro Perspectives
A lot of economic announcements from China today. So, let’s start. China’s industrial production rose 16.1% in October from a year before following 13.9% rise in September. The export decline slowed to 13.8% in October (year-on-year). If we adjust for holidays, it was down only 9.1% . The trade surplus rose to 23.99 billion USD […]
Belisarius is annoyed with united horn blowing on dollar going further down and gold going further up. So annoyed it is on the brinks of placing a short gold and long dollar trade. I’ll cool down and think on that again. Such unified consensus always leads to opposite outcome. One of the reasons is (for […]
Full report. No recovery here. Credit continues to contract; both demand is weaker and lending standards are tightened. Summary: In the October survey, domestic banks indicated that they continued to tighten standards and terms over the past three months on all major types of loans to businesses and households. However, the net percentages of banks […]
We move fast up and down. Will watch carefully, maybe a long volatility opportunity. Chart 1. VIX
Well, new week, same stories. Asia ended higher, Europe is trading higher on no news (media in claiming on G-20 stimulus). Looks we have relief rally, we survived last week filled with economic data and events and now on no major economic announcement or earnings (except WMT) this week we move up. Skeptical, as I […]
Important U.S. earnings this week:
* Monday: Tesoro Corporation (TSO), Dril-Quip (DRQ), Rockwell Automation (ROK), Sempra Energy (SRE), Electronic Arts (ERTS), Priceline.com (PCLN), Hologic (HOLX), Quicksilver Resources (KWK), Windstream (WIN), Nationwide Health (NHP), Fluor (FLR), NBTY (NTY), Hospitality Property (HPT)
Bad numbers on employment continue. Non-farm payrolls came at -190k vs. -175 k consensus and -263k last month.. Contrary to my guess yesterday. Unemployment has hit 26-year high of 10.2%. Average hourly earnings up 0.3% vs. 0.1% consensus. Average workweek at 33 hours, down from 33.1 last month.
Slow day today ahead of unemployment release. RBS earnings caught my attention.
Divergence yesterday between PowerShares DB US Dollar Index Bullish and index that it tracks Dollar Index (DXY) as fund manager used up SEC registered shares. Similar to United States Natural Gas earlier this year, covered on Tainted Alpha. DB Commodity Services LLC filled to the U.S. SEC to register 100,000,000 additional shares in order to meet investor demand. Reuters story:Deutsche Bank unit files for 100 mln new UUP shares. Also, more important large volume in call options, looks someone is looking to profit on short covering/squeeze.
A lot of action on the earnings losses and economic announcements front. So, let’s start. Initial jobless claims came at 512k vs. 523k consensus and 530k the week before. Finally some improvement, but still at some 170k job losses a month.
Markets, off-course, cheered the data. All major indexes ended with nice gains of a 2% and more. We will see if the positive action continues after the tomorrows unemployment figures. Could be, consensus on non-farm payrolls is pretty low at 175k job loses, I think we could manage to beet that.
I will today start with U.S. petroleum weekly which I will prepare every week based on the the new EIA data.
Most widely followed category – crude oil stocks came yesterday at -4 million barrels vs. consensus of 0.8 million barrels increase. A surprising figure on upon first impression, one warranting crude oil price increase, but if we review the the data in detail we will find that the fundamentals of petroleum supply and demand have not changed and the oil price rise is not supported by supply and demand fundamentals.
Nothing new material in the statement. FED press release.
Higlihts:
Conditions in financial markets were roughly unchanged, on balance, over the intermeeting period. Activity in the housing sector has increased over recent months. Household spending appears to be expanding but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Businesses are still cutting back on fixed investment and staffing, though at a slower pace; they continue to make progress in bringing inventory stocks into better alignment with sales.
…at least for one trading session. Belisarius was occupied with his new firm in last few days so his blog suffered a little; now he’s back fully operational. Back to the theme; yesterday someone took a large position in gold and surprisingly moved the precious metal up on a positive dollar day. Media and blogosphere are full of various theories and reasons for the action. From India’s central bank buying MMF gold (Bloomberg story: IMF Sells Gold to India, First Sale in Nine Years) to “informed” buyer taking the position ahead of today FED interest rate decision/statement and rumors of big financial institution in trouble.
We have had a nice shoot up yesterday after the ISM Manufacturing Index release, but the gains flattened during the day. The ISM Manufacturing Index came at 55.7 vs. 53 consensus and 52.6 last month. It’s a diffusion index, I don’t care really, but markets react sometimes.
Important U.S. earnings this week:
* Monday: Sysco (SYY), Loews (L), Chesapeake Energy (CHK), Anadarko Petroleum (APC), Consolidated Edison (ED), Ford Motor (F)