Good evening,
Ladies and Gentlemen, today we have reached all-time high prices / low rates for this year!
Holiday Season Kicks Off
by Craig Dismuke
This week is a holiday-shortened week as the country celebrates Thanksgiving. The bond market will be closed on Thursday as a result. But despite the short week, there are a plethora of data releases scheduled. Today’s calendar brings the Chicago Fed National Activity Index which is an aggregation of 85 different economic variables into one monthly metric that has been trending fractionally higher, of late. We will also see the second Markit services report for November – an index which is fairly new in the U.S. but which economists use to forecast the ISM Non-Manufacturing index. Finally, the Dallas Fed will release its regional manufacturing activity index. Perhaps most important for the bond markets, this week will bring Treasury supply and today kicks off with an auction of $28 billion 2-year notes.
Later in the week, we will get two home price reports, new and pending home sales, two consumer confidence reports, PCE inflation, durable goods orders, and the first revision to the 3Q GDP report. However, the biggest news to watch may be the pace of sales as the holiday season kicks off. All indicators point to this being a very good holiday season. As an example, Gallup surveys consumers about their expected holiday expenditures. This year’s survey shows that the average household is expecting to spend $781. That is an increase of 11% and points to retail sales for the holiday months being up 7% year-over-year. The real question for corporate profits may be the price at which they get business done. Retailers are already discounting merchandise and have conditioned consumers to expect such.
Overnight, Asian stock markets are up after the PBOC announced last Friday that they were cutting lending and deposit rates to stem slowing inflation. Moreover, they are reportedly prepared to do more if necessary. And again, after Draghi insisted that the ECB was prepared to begin buying more bonds, the euro is down 1.2% since his comments Friday and Eurozone stocks are still rallying. Amazingly enough, bond prices remain firm also. The German 10-year Bund is now trading at 0.77% while the French 10-year is at 1.11%. In the U.S., stock futures are green this morning and bond prices appear firm. Easing monetary policy is like a rising tide that lifts all ships.
Imports of oil from OPEC nations fell to their lowest levels in 30 years in August. According to the FT, “US imports of crude oil from Opec nations is at its lowest level in almost 30 years, underlining the impact of the shale revolution on global trade flows. ... The lower dependence on imports from the cartel ... comes amid advances in hydraulic fracturing that has propelled domestic US production to about 9m barrels a day - the highest level since the mid-1980s. ... In August, Opec's share of US crude oil imports dropped to 40 per cent - accounting for 2.9m b/d - the lowest since May 1985 ... At its 1976 peak it stood at about 88 per cent.”
Later in the week, we will get two home price reports, new and pending home sales, two consumer confidence reports, PCE inflation, durable goods orders, and the first revision to the 3Q GDP report. However, the biggest news to watch may be the pace of sales as the holiday season kicks off. All indicators point to this being a very good holiday season. As an example, Gallup surveys consumers about their expected holiday expenditures. This year’s survey shows that the average household is expecting to spend $781. That is an increase of 11% and points to retail sales for the holiday months being up 7% year-over-year. The real question for corporate profits may be the price at which they get business done. Retailers are already discounting merchandise and have conditioned consumers to expect such.
Overnight, Asian stock markets are up after the PBOC announced last Friday that they were cutting lending and deposit rates to stem slowing inflation. Moreover, they are reportedly prepared to do more if necessary. And again, after Draghi insisted that the ECB was prepared to begin buying more bonds, the euro is down 1.2% since his comments Friday and Eurozone stocks are still rallying. Amazingly enough, bond prices remain firm also. The German 10-year Bund is now trading at 0.77% while the French 10-year is at 1.11%. In the U.S., stock futures are green this morning and bond prices appear firm. Easing monetary policy is like a rising tide that lifts all ships.
Imports of oil from OPEC nations fell to their lowest levels in 30 years in August. According to the FT, “US imports of crude oil from Opec nations is at its lowest level in almost 30 years, underlining the impact of the shale revolution on global trade flows. ... The lower dependence on imports from the cartel ... comes amid advances in hydraulic fracturing that has propelled domestic US production to about 9m barrels a day - the highest level since the mid-1980s. ... In August, Opec's share of US crude oil imports dropped to 40 per cent - accounting for 2.9m b/d - the lowest since May 1985 ... At its 1976 peak it stood at about 88 per cent.”
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Economic Calendar
Date/Time(Central)
|
Indicator
|
Period
|
Est.
|
Actual
|
Prior
|
Revised
|
11/25/2014 7:30 AM
|
GDP QoQ (Annualized)
|
3Q S
|
3.3%
|
3.5%
| ||
11/25/2014 7:30 AM
|
Personal Consumption
|
3Q S
|
1.9%
|
1.8%
| ||
11/25/2014 8:00 AM
|
S&P/CaseShiller Comp-20 (YoY)
|
SEP
|
4.60%
|
5.57%
| ||
11/25/2014 8:00 AM
|
S&P/CaseShiller US HPI
|
SEP
|
--
|
5.10%
| ||
11/25/2014 9:00 AM
|
Consumer Confidence
|
NOV
|
96.0
|
94.5
| ||
11/26/2014 6:00 AM
|
MBA Mortgage Apps.
|
21-Nov
|
--
|
4.9%
| ||
11/26/2014 7:30 AM
|
Durable Goods Orders
|
OCT
|
-0.6%
|
-1.3%
|
-1.1%
| |
11/26/2014 7:30 AM
|
Initial Jobless Claims
|
22-Nov
|
287K
|
291K
| ||
11/26/2014 7:30 AM
|
Continuing Jobless Claims
|
15-Nov
|
2360K
|
2330K
| ||
11/26/2014 7:30 AM
|
Personal Income
|
OCT
|
0.4%
|
0.2%
| ||
11/26/2014 7:30 AM
|
Personal Spending
|
OCT
|
0.3%
|
-0.2%
| ||
11/26/2014 7:30 AM
|
PCE Deflator (YoY)
|
OCT
|
1.4%
|
1.4%
| ||
11/26/2014 7:30 AM
|
PCE Core (MoM)
|
OCT
|
0.2%
|
0.1%
| ||
11/26/2014 7:30 AM
|
PCE Core (YoY)
|
OCT
|
1.5%
|
1.5%
| ||
11/26/2014 8:45 AM
|
Chicago Purchasing Manager
|
NOV
|
63.0
|
66.2
| ||
11/26/2014 8:55 AM
|
U of Mich. Consumer Confidence
|
NOV F
|
90.0
|
89.4
| ||
11/26/2014 9:00 AM
|
New Home Sales
|
OCT
|
470K
|
467K
| ||
11/26/2014 9:00 AM
|
New Home Sales (MoM)
|
OCT
|
0.7%
|
0.2%
|
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