U.S. GDP Rose 3.2% in Q4 2010
U.S. GDP growth for Q4 was reported at 3.2% vs. 3.5% consensus. Q3 reading was at +2.6%.
Morning Reading – January 28, 2011
*** BBC News: China introduces first property tax for home buyers ***
*** FT BeyondBRICs: Food prices soar as EMs stockpile ***
*** FT Alphaville: Moody’s Aaa-rated American journey ***
*** FT Alphaville: Eek Eonia! ***
*** FT Alphaville: Regling looks at Manila, to help Athens ***
*** FT Alphaville: In Pharaoh’s markets ***
*** Calculated Risk: Update: Coming Existing Home Sales Revisions ***
*** The Big Picture: Coincident Indicators vs Real GDP (1959-2011) ***
*** The Big Picture: How Banking Works ***
U.S. Natural Gas Weekly – January 28, 2011
Working gas in storage fell 174 Bcf from previous week. The consensus was at 170 Bcf.
Storage level is 21 Bcf higher than same time year ago.
Daily Reading – January 27,2011
*** BoingBoing: Dubai’s artificial islands “sinking” ***
*** The Slope Of Hope: A Moment of Silence ***
*** The Big Picture: Has the Dow Entered a New Trading Range? ***
*** FT Alphaville: A record WTI-Brent spread, a new paradigm ***
*** FT Alphaville: The global inflation loop, a quick guide ***
*** FT Alphaville: Japan downgrade: The (umpteenth) denouement ***
*** FT BeyondBRICs: Egypt: bye-bye to the carry trade? ***
*** Macro Man: BDIY Underwater ***
Pending Home Sales Index Rose 2.0% In December
Pending home sales index rose 2.0% In December vs. revised (down from 3.5%) rise of 3.1% in November. On year level, the index is down 4.2%.
To repeat: Generally rising pending home sales are positive for the economy, but currently and until excess unsold housing inventory is cleared rising pending home sales index mean more foreclosed homes are being sold at depressed prices which is a sign of additional pressure on home prices.
Chicago Fed National Activity Index For December At 0.03
Chicago Fed National Activity Index for December was reported at 0.03 vs. revised November reading of -0.4. Chicago Fed National Activity Index 3-month moving average was at -0.22.
CFNAI is pointing to mild economic growth..
U.S. Durable Goods New Orders Fell 2.5% In December
Durable goods new orders fell 2.5% in December vs. 1.5% consensus and -0.1% revised increase in November (revised upwards from -1.3%)
U.S. Initial Jobless Claims At 454.000; Up 51.000
Initial jobless claims in the U.S. were reported at 454.000 vs. 405.000 consensus; last week revised (down 1.000) reading was at 403.000.
Again big spike upwards.
U.S. Petroleum Weekly – January 27, 2011
Crude oil stocks rose 4.8 million barrels; Gasoline stocks increased 2.4 million barrels; Distillate stocks fell 0.1 million barrels; Propane/propylene stocks were down 3.3 million barrels; Other oils stocks decreased 2.1 million barrels; Total crude oil and petroleum stocks were 2.4 million barrels higher for the week.
Refinery utilization fell 1.2% to 81.8%.
Implied crude oil demand rose 0.2 million barrels.
Crude oil and petroleum product net imports rose 0.2 million barrels to 9.7 million barrels.
Crude oil stocks rising, markets well supplied, demand weak.
Recent weeks are marked by record WTI vs. Brent crude price spread which is at record high of 11.2 USD per barrel. My best guess is that this is caused by three major factors: oversupplied U.S. market, smaller negative roll yield in Brent (or even positive roll on some contracts), coming CFTC futures position limits.
What this means for the crude oil price? I would say WTI is better proxy for oil price than Brent.
FOMC Statement – January 26, 2011
New: Formulation that despite rise in commodity prices longer-term inflation expectations have remained stable and; Since Mr. Hoenig in no longer a voting member all FOMC members voted in favor of FOMC monetary policy action.
U.S. New Home Sales Rose 17.5% In December
U.S. new home sales rose 17.5% to 329.000 SAAR; Consensus was at 300.000 SAAR, prior reading (revised downward 10.000) was at 280.000 SAAR.
Month of supplies fell from 8.4 down to 6.9 months. Backlog of unsold new homes is at 191.000, lowest since February 1968.
As I wrote yesterday, months of supply is still above pre-crisis levels, but the absolute level of unsold new homes is so low that small pickup in new home sales could lead to demand outweighing supply.
If inflow of foreclosed homes to the market does not increase dramatically the possibility of further large-scale decreases of home prices is not high. I will monitor situation closely as home prices are crucial for financial sector health.
Morning Reading – January 26, 2011 – Updated
*** The Slope Of Hope: Time Saver ***
*** The Slope Of Hope: Food Inflation- More Than Meets the Eye ***
*** Daily Options Report: Fading VIX Breakouts ***
*** FT Alphaville: A very messy Ambac lawsuit for JPMorgan ***
*** FT Alphaville: Searching for BoE credibility on inflation ***
*** FT Alphaville: WTI’s upcoming ‘Keystone’ problem ***
*** Self-Evident: Far from the madding crowd ***
*** Pragmatic Capitalism: IS QE ACTUALLY WORKING? ***
MBA Mortgage Applications Down 12.9%
MBA mortgage applications fell 12.9%; Prior reading was an increase of 5.0%; On year level MBA Basic Index is down 13.9%.
January Richmond FED Manufacturing Survey At 18.0
Richmond FED Manufacturing Survey was reported today at 18.0. Prior reading was at 25.0, consensus was at 22.0.
To repeat: Industrial production will continue to slowly expand in January.
January Conference Board Consumer Confidence At 60.6
Conference Board consumer confidence came out at 60.6 vs. 54.3 consensus and 52.5 reading for December.
Large positive surprise.