Monthly Strategy – May 2011
Mostly unchanged from April…
U.S. Construction Spending Rose 1.4% In March
U.S. construction spending rose 1.4% in March vs. 0.4% consensus and 2.6% fall (revised from 1.4% fall) in February. On year level we are at -6.7%.
April ISM Manufacturing Index At 60.4
ISM Manufacturing Index was reported at 60.4 vs. prior reading of 61.2 and consensus of 59.5.
Smaller slowdown than expected, positive surprise.
Daily Reading – Monday, May 2, 2011
*** Alphaville: El-Erian: Implications for global markets of Bin Laden’s death ***
*** FT Gideon Rachman’s blog: Conspiracy theories about Osama’s death ***
*** The Big Picture: The Destruction of Economic Facts ***
*** The Big Picture: Uh-Oh: Is Shiller Defending the Failures of Economists? ***
*** JESSE’S CAFÉ AMÉRICAIN: Portrait of Desperation ***
*** CAFÉ AMÉRICAIN: Open Letter From Ted Butler to Custodian of SLV Silver ETF ***
New Week Intro – May 2, 2011
Weekly economic calendar.
Dry Bulk Weekly – May 2, 2011
Baltic dry index rose 1.2% last week; Capesize Index was up 1.6%; Panamax Index rose 5.3%; Supramax Index was down 0.8%; Handysize Index fell 0.6%.
Huge drop in thermal coal stockpiles; Huge drop in steel inventory; Iron ore inventory unchanged. Prices are strong. Monetary tightening still not affecting Chinese commodity demand much.
China Official PMI For April At 52.9
Official (China Federation of Logistics & Purchasing and National Bureau of Statistics) China PMI fell form 53.4 to 52.9. Consensus was at 53.9.
Weakening, but that’s nothing new.
Rig Count Weekly – May 1, 2011
Number of crude oil drilling rigs rose for 13; Number of natural gas drilling rigs rose for 4.
Tanker Weekly – May 1, 2011
Baltic Dirty Tanker Index fell 1.2%; Baltic Clean Tanker Index rose 0.6%.
We could see a slight bounce in Q2 as refinery maintenance season ends.
U.S. Freight Carloads Weekly – May 1, 2011
U.S. railroads originated 292,706 carloads, down 1.8% compared with the same week in 2010 and down 3.8% compared with 5-year average. Week over week change was -0.9%.
Weakening.
U.S. Personal Income Rose 0.5%; U.S. Consumer Spending Rose 0.6%
U.S. personal income rose 0.5% in March vs. 0.4% consensus and 0.4% rise in February. On y-o-y level personal income is up 5.3%.
Daily Reading – Thursday, April 28, 2011
*** Econbrowser: Economy still growing and still disappointing ***
*** The Big Picture: Q1 GDP medicore ***
*** The Big Picture: Bank Arbitrage (JPM, C) ***
*** Reuters: What’s on Ben’s mind? ***
*** FT Alphaville: Meanwhile in China… ***
*** FT Alphaville: And now for Chinese zinc shenanigans ***
*** FT Alphaville: Chinese bonded warehouses’ copper inventories still rising ***
*** FT Alphaville: Copper, the re-export factor ***
*** FT BeyondBRICs: China property: to burst, or not to burst? ***
*** Pragmatic Capitalism: DAVID ROSENBERG TURNS BULLISH…. ***
*** WSJ The Source: Is It Different This Time Round? ***
*** MarketWatch: Buy gold ***
*** The Economist: Daily chart: which countries hoard the most gold? ***
*** New York Post: From rags to Internet riches, in 3 months ***
Video Of The Day: Fight of the Century: Keynes vs. Hayek Round Two
According to the National Bureau of Economic Research, the Great Recession ended almost two years ago, in the summer of 2009. But we’re all uneasy. Job growth has been disappointing. The recovery seems fragile. Where should we head from here? Is that question even meaningful? Can the government steer the economy or have past attempts helped create the mess we’re still in.
John Maynard Keynes and F. A. Hayek never agreed on the answers to these questions and they still don’t. Let’s listen to the greats. See Keynes and Hayek throwing down in “Fight of the Century”.
U.S. GDP Growth in Q1 2011 At 1.8%
U.S. GDP growth for Q1 was reported at 1.8%; consensus was at 2.0%. Q4 2010 reading was at +3.1%.
Slowing down.
FOMC Statement – April 27, 2011
As expected: rising commodity prices increased inflation but the effect are only transitory, asset purchase programs will be completed as scheduled, extended period formulation still here.