Outside the Markets

It’s the Economy… Stupid

Due out Friday: 1) SP Global Manufacturing PMI 51.5 expected versus 50.7 prior. 2) Construction Spending 0.2% expected versus 0.9% prior. 3) ISM Manufacturing PMI 49.5 expected versus 49.1 prior. 4) Michigan Consumer Sentiment 79.6 expected versus 79 prior. 5) Fed out speaking again… same old song and dance.

Thursday: 1) PCE 0.3% versus 0.3% expected versus 0.2% prior. Core PCE 0.4% versus 0.4% expected versus 0.2% prior. PCE Y/Y 2.4% versus 2.4% expected versus 2.6% prior. Core PCE Y/Y 2.8% versus 2.8% expected versus 2.8% prior. Personal Income 1% versus 0.4% expected versus 0.3% prior. Personal Spending 0.2 verus 0.2% expected versus 0.7% prior. Real personal consumption-0.1% versus 0.5% prior. Overall PCE was a positive to the markets… 2) Chicago PMI 44 versus 48.1 expected versus 46 prior. Still showing weakness. 3) Pending Home Sales -4.9% versus 1.5% expected versus 8.3% prior. Surpriseing drop? Remember rates were higher most of the month. 4) Initial Jobless Claims 219k versus 210k expected versus 201k prior. Continuing Claims 1.905 versus 1.874 m expected versus 1.862 m prior. Continuing claims higher? Watching that data. 5) Natural Gas Inventories -96b versus -86b expected versus -60b prior. Build continues with UNG lower on the day.

Wednesday: 1) MBA Mortgage index -5.6% versus -10.6% prior. 2) GDP Second Estimate 3.2% versus 3.2% expected versus 3.3% prior. 3) Weekly Crude Inventories… Fifth week in a row inventories rose… Cushing Ok. Inventories rose to 1.45 million barrels versus 0.74 million prior week. The short-term impact is uncertainty looking forward. The OPEC meeting is on the horizon.

Tuesday: 1) Durable Goods -6.1% versus -4.4% expected versus 0% prior. Ex-Transports -0.3 versus 0.3% expected versus 0.6% prior. Impact of government versus the private sector… BA didn’t help matters either. 2) FHFA Housing Price Index 0.1% versus 0.4% prior. Case-Schiller Home Price Index 6.1% versus 6% expected versus 5.4% prior. 3) February Consumer Confidence 106.7 versus 115.1 expected versus 114.8 prior. Well below expectation…

Monday: New Home Sales 1.5% M/M increase versus 3% expected. 661k versus 680k expected versus 664k prior. Below are two charts showing new home sales and Median home prices. Pictures are worth a thousand words.

Thursday: 1) Jobless Claims 201k versus 216k expected versus 212k prior. Continuing Claims 1.826 million versus 1.889 prior… Questions… who is accounting for all the announced layoffs? Fairytale numbers! 2) Flash Services PMI 51.3 versus 52.4 expected versus 52.5 prior. Still ugly data. Flash Manufacturing PMI 50.1 expected versus 50.7 prior. 3) Exiting Home Sales 4 million versus 3.97 million expected versus 3.8 million previous. Sales were up 3.1% versus 4.9% expected… Lack of supply is a challenge… higher interest rates are trapping people in their homes. 4) Fed out speaking.

Wednesday: FOMC minutes. Fed out talking again. FOMC minutes released… nothing new and nothing news from the puppets talking and reemphasizing the same storyline.

Tuesday: Leading Economic Indicators Jan. -0.4 versus -0.3% expected versus -0.1% previous. Not good news overall.

Friday: 1) Housing Starts 1.33 million versus 1.47 million expected versus 1.46 million prior. Down 15% not pretty. 2) Building Permits 1..47 million versus 1.52 million expected versus 1.5 million prior. Declined month over month. 3) Producer Price Index 0.3% versus 0.1% expected versus -0.1% prior. Core PPI 0.5% versus 0.1% expected versus 0.2% prior. PPI Y/Y 0.9% versus 1% prior. Core PPI Y/Y 2.6% versus 2.5% prior PPI showing increase and the markets didn’t like the news as it relates to the Fed’s stance on inflation.

Thursday: 1) Weekly Jobless Claims 212k versus 220k expected versus 218k prior. 2) Empire State Manufacturing Survey -2.4 versus -13.5% expected versus -43.7 prior. 3) Philly Fed Manufacturing Survey 5.2 versus -9 expected versus -10.6 prior. 4) US Retail Sales Jan. -0.8 versus -0.2% expected versus 0.6% prior. 5) Industrial Production -0.1 versus 0.2% expected versus 0.1% prior. 6) Capacity Utilization 78.5 versus 78.8% expected versus 78.6 prior. 7) Home Builder Confidence Index 48 versus 46 expected versus 44 expected. Retail sales data was negative, but XRT broke higher. Bad is good again?

Wednesday: No key data released. Markets found comfort in Fed talks to Congress stating they would not wait until inflation was exactly 2% to cut rates. Went so far as to make comments that sounded like, one month’s data is not a trend. Interesting how little can be said, and how much can be interpreted.

Tuesday: Consumer Price Index: 0.3% versus 0.2% expected versus 0.3% prior. Core CPI 0.4 versus 0.3% expected versus 0.3% prior. CPI Y/Y 3.1% versus 2.9% expected versus 3.4% previous. Core CPI Y/Y 3.9 versus 3.7% expected versus 3.9% prior. CPI Actual Prices: New record high +17.5% Since Biden took office. The data in light of the FOMC and following Fed comments garnered a negative response from investors sending the markets lower. The next key data point will be PPI… if it confirms the rise in prices at the producer level the markets will have to make a decision on direction near term.

This is a good chart of how inflation stacks up on all fronts… enjoy.

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