Goldman: "Yellen Remarks Point To Higher Odds Of September Hike", Market Disagrees

With pundits unable to decide if Yellen's speech was hawkish or dovish, we need a tiebreaker, and as always the best one is the bank that has spawned more central bankers than any other institution, Goldman Sachs. As such, according to the just released analysis of Goldman's Jan Hatzius, the Fed speech "raised the odds of a rate increase at the September FOMC meeting," but he adds that "any action will depend on the result of next week's jobs report. "

"Hawkish" Yellen Speech Sparks Buying Spree In Everything (Except Dollars)

The US Dollar is being dumped after Yellen's apparently 'hawkish' speech as the market appears to have latched onto one sentence..."future policymakers may wish to explore the possibility of purchasing a broader range of assets." Stocks are up, gold is up, bonds are up, oil is up...

Consumer Confidence Slumps As Inflation Expectations Crash To All-Time Lows

The "disinflationary mindset" remains as UMIch-reported medium-term inflation expectations plunge back to record lows. Headline consumer confidence also dropped to its lowest since 2016 lows in April driven by drop in 'hope' from the flash print - stuck at lowest levels since 2014.

Iran Sets Condition Under Which It Would Join OPEC Oil Production Freeze

Iran's oil minister Bijan Zanganeh made the most explicit statement on the topic, when he laid out the conditions under which Iran would be willing to "help other oil producers stabilize the world market."  It was a simple condition: Iran will cooperate as long as it is excluded from the freeze.

US Trade Deficit Shrinks On Biggest Spike In Food & Beverage Exports In History

Forget the new economy, it appears - judging by July's preliminary trade data - that USA's great export is 'food and beverage'. Thanks to a 31.3% surge month-over-month in this category - the biggest MoM gain in history - the US trade deficit 'improved' to -$59.3bn (from -$64.5bn revised lower) and beat expectations of -$63bn.

Q2 GDP Revised Lower To 1.1%, As Expected, Even As Personal Consumption Rises

In what has been called the economic equivalent of hitting 00 on roulette, moments ago the BEA announced that Q2 GDP eased off from the original estimate of 1.2%, declining fractionally to 1.09%, and right on top of consensus etimates, which also expected a 1.1% print in the second quarter. This means that following the disappointing Q1 print of 0.83%, the first half economic growth is now officially just below 1%, or 0.096% to be precise.

Inventory Growth Slowdown Dashes Hopes For Q3 GDP Bounce Back

Following the surge in sales (on higher petroleum costs) in June (and modest build in inventories), the sales-stock ratio fell back from cycle highs (though remained deep in recessionary territory). July's preliminary data showed a notable slowdown in inventories (-0.02% vs a 0.1% expected gain and revised lower 0.2%) confirming recent PMI data of no pickup in growth in Q3. For 32 months straight, inventory growth has outpacced sales growth year-over-year with 18 straight months of wholesale sales declines.

"Will Yellen Shock Today?"

Well, we made it. It’s finally Janet Yellen day. Has a speech by a Fed Chair ever been anticipated, dissected and stressed over to this extent? It’s partially down to the fact that she has largely, even unprecedentedly, made herself unavailable for public comment. Sending her minions out to confuse us. But more distressingly, they have put themselves in a situation where a measly 25 basis points looms like a life-changing event. 

Frontrunning: August 26

  • Global equities set 2-week low before Yellen speech, dollar dips (BBG)
  • Lochte signs new endorsement deal, legal woes persist in Brazil (Reuters)
  • Blackstone Unleashes Cash Hoard in Texas Shale Oil Land Grab (BBG)
  • China to prosecute former statistics bureau chief for corruption (Reuters)
  • Turkey fires on U.S.-backed Kurdish militia in Syria offensive (Reuters)

In Surprising Twist, Ackman Named As Potential Buyer Of Icahn Herbalife Stake

Having won the battle with Bill Ackman over the existential legality of Herbalife, who owns 18% of the nutritional company, has found himself in a curious place: with no further upside catalysts and with the company levered to the neck with recent buyback-funding debt issues, there is litle upside left. In fact, the stock has been drifting lower ever since the settlement. Which is why, perhaps it is not surprising, that as the WSJ reported overnight, Icahn has been quietly shopping his stake in Herbalife to a group "including the company’s arch-nemesis William Ackman,

With Janet Yellen Just Hours Away, Directionless Markets Wait For A Signal

With Yellen's much anticipated speech just hours away, the already comatose market flatlined overnight in another directionless session, with European stocks and US equity futures practically unchanged, while Asian shares to a two-week low, led by Japan, as investors showed a reluctance to take on risk before Yellen’s speech. The dollar was a tad lower, along with oil which is set for its first weekly drop in a month. 

"Things Are Worse" - Dollar Stores' Startling Admission: Half Of US Consumers Are In Dire Straits

"I know that when we look at the overall U.S. population, it seems like things are getting better. But when you start breaking it down and you look at that core consumer that we serve on the lower economic scale that's out there, things have not gotten any better for her, and arguably, they're worse because rents are accelerating, healthcare is accelerating." - Dollar General CEO, Todd Vasos