Moments ago the latest data from the Census Bureau shelved any lingering concerns about a sharp slowdown in the US housing market, when it reported that in June new home sales surged 25.4% from a year ago and up 3.5% from the upward revised May print of 572K to 592K, above the 560K expected, and the highest number reported since 2008, even if still well below half of the peak hit before the recession struck.
Aginst expectations of a -5 print, July's Richmond Fed printed +10 (up from a revised lower -10 in June). This is the 2nd biggest MoM spike since 1998 (the biggest being March's insane spike). This beat is a 7 standard deviation beat over expectations among the 9 economists tracking it with none of them forecasting a gain at all. Across the board components improved with a surge in employees, workweek and the biggest jump in new orders since 1998!
Despite an excited bounce in US Manufacturing PMI's preliminary print (and ISM Services last month), Markit reports a disappointing drop in US Services to a 5-month low. New business slowed but that did not deter hope as business confidence rebounded (albeit from record lows). However, as Markit notes, "The U.S. service sector remained stuck in a low gear at the start of the third quarter of 2016..."
"We remain cautious heading into Apple’s FQ3 results as we believe that iPhone expectations are still high for the second half of CY16. Our revenue estimate for the September QTR (FQ4) is 1.5% below sell-side consensus as we remain concerned about weaker consumer demand driven by macro conditions. We believe this could be exacerbated by consumers delaying upgrades this Fall in favor of a reported large form factor change in 2017."
It turns out that Donald Trump’s proposed border wall is not such a bad idea after all. Though Mexico’s current and former Presidents have both lambasted Trump for implying that a wall would curb immigration, it turns out that Mexicans like the idea...
In another reminder that monetary unorthodoxy in the face of NIRP is coming to a savings account near you, overnight the RBS banking group warned 1.3 million customers they could be charged negative interest rates if the Bank of England cuts base rates below zero. As seen in the letter posted below, the bank warned that: "Global interest rates remain at very low levels and in some markets are currently negative. Dependent on future market conditions, this could result in us charging on credit balances."
Despite its supposed seasonal adjustment, Case-Shiller home price growth in May tumbled for the 3rd year in a row (in fact, with revisions, the 0.23% drop since March is the biggest drop since June 2014). This is the first consecutive home price drop since 2012. The almost unbelievable 'stability' of the 5-ish percent growth in Case-Shiller home prices for the last 2 years is impressive if only for its historical lack of precedence but May's 5.24% YoY rise in the slowest since Sept 2015.
In the latest European assault to take place just over the past hour, two knifemen raided the Church of the Gambetta in the northern French town of Saint-Etienne-du-Rouvray, taking between 4 and 6 hostages and allegedly killing a priest before being killed by police. According to subsequent unconfirmed reports the priest had been beheaded.
With WTI now down over 17% from its mid-June highs, and energy stocks just beginning to wake up to the 2015-analog collapse, fears are rising that once again low oil prices are not 'unequivocally good' for stocks or the economy. Between record speculative long positioning in futures, the fundamental strength of the dollar and surge in gasoline inventories remain the big overhangs (along with rising storage levels at Cushing as demand begins to fade seasonally).
'World economic growth remains subdued and is not sufficient to drive improvement in most of the industries and markets we serve. Commodity prices appear to have stabilized, but at low levels. Global uncertainty continues, and the recent Brexit outcome and the turmoil in Turkey add to risks, especially in Europe."
The sustained applause and sea of "Bernie" signs in the crowd as he took the stage called into question whether Hillary had any support at all among the convention goers. Sanders spent nearly the first half of his speech thanking his supporters and touting progressive policies with the first mention of Clinton not coming until about 800 words later.
Russian Foreign Minister Sergey Lavrov responded to accusations that Russia was allegedly behind the DNC server hack, when he blasted a reporter over her question that Russia was behind the DNC email leaks. Lavrov had a concise reply, stating: "I don't want to use four-letter words." This appears to be a denial of the accusations.
In a turbulent session for FX, the Yen soared as much as 1.4%, the most in three weeks, after Finance Minister Aso says the government will "leave actual policy measures to BOJ", sending the Nikkei lower by 1.4%. European stocks and U.S. equity index futures are little changed despite the slide in the key carry pair as the Fed starts its two day meeting.
The “Islam versus the West” meme is filled with lies. In much of the post-war 20th century period, the CIA and other intel agencies prosecuted Operation Gladio, which manufactured terror incidents purportedly generated by left-wing forces. Has a neo-Operation Gladio been started?
Clinton Cash investigates how Bill and Hillary Clinton went from being “dead broke” after leaving the White House to amassing a net worth of over $150 million, with over $2 billion in donations to their foundation.
We believe Hillary Clinton lost the Presidency this past week. While the explosive DNC leaks will undoubtably have a long lasting effect, this post will barely reference the leaks. Rather, it will explain how recent decisions by the Hillary campaign played right into Trump’s hands by essentially waving a gigantic middle finger to the 73% of Americans who think the country is headed in the wrong direction.