Consumer Confidence

Oil Surges After OPEC Production Hits Record High: Here's Why

Despite the return of the record OPEC oil production, crude is now surging for one simple reason: oil is inversely correlated with the dollar. And thanks to today GDP shock, which showed that the US economy grew far slower than expected, the dollar has crashed. Confused? Don't be: "Dollar weakness follows disappointing U.S. GDP data, consumer confidence." As a result, ugly economic data has sent the dollar tumbling, oil soaring, and the S&P near all timehighs. Q.E.D.

"Hope"? Nope...!

Despite the protestations that everything will be awesome from Hillbama, the American people strongly disagree. The gap between tumbling 'expectations' (77.8) and 'current conditions' (109.0) is at its worst (least hopeful) since August 2006... shortly before overall confidence crashed in America.

Frontrunning: July 29

  • Yen, bond yields rise as Bank of Japan action underwhelms (Reuters); Bank of Japan Takes Modest Easing Action (WSJ)
  • Hong Kong shares end lower as BOJ disappointment sweeps Asia (Reuters)
  • Accepting White House nomination, Clinton offers 'clear-eyed' vision (Reuters)
  • Two Conventions, Two Distinct World Views (WSJ)
  • Democrats Emphasize American Exceptionalism at Convention (BBG)
  • Clinton’s Image Among Democrats at a Historic Low (WSJ)

Don't Show President Obama This Chart

If everything is so awesome (as initial claims hovering at 43 year lows suggests) then why are consumer confidence expectations (otherwise known as 'hope') tumbling?

US Futures Rise With All Eyes On Kuroda As Global Stocks Tread Water

Following yesterday's Fed decision and ahead of tonight's far more important BOJ announcement, European stocks have posted modest declines, Asian shares rise toward 9-month highs, while U.S. equity index futures are fractionally in the green in the aftermath of Facebook's blowout earnings. The dollar has extended on losses after Yellen reiterated a gradual approach to raising interest rates, and was down 0.5% in early trading.

Global Stocks, Futures Continue Rise On Apple, Japan Stimulus; Yellen On Deck

The markets were following a rollercoaster night for the Japanese Yen, when after several media headlines Abe was said to have announced a stimulus package that would be more than JPY28 trillion, sending Japanese stocks higher 1.7% while the USDJPY spiked but well off overnight highs, pushing risk assets higher. Europe and US futs were also in the green on optimism from AAPL's earnings, but all eyes will be on today's FOMC announcement.

USDJPY Plunges On Japan Stimulus Concerns; US Futures Flat With As Fed Begins Meeting

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.

Key Events And Earnings In The Coming Week

The key economic releases this week include consumer confidence on Tuesday, the durable goods report on Wednesday, and the advance release of 2nd quarter GDP on Friday. The July FOMC statement will be released on Wednesday at 2PM. There are several scheduled speeches from Fed officials this week. 197 S&P 500 companies are due to report (or 38% of the index market cap) with the notable names including Apple, Verizon, Facebook, Coca-Cola, Alphabet, Exxon Mobil and Chevron.

Philly Fed Slumps To 6-Month Lows As National Activity Index Jumps To 6-Month Highs

In the first wave of macro data today, initial claims beat expectations, dropping to 253k near record lows (but remains wildly divergent from tumbling consumer confidence). Following June's rebound in Philly Fed, July missed expectations tumbling to six-month lows, back to a contractionary -2.9 (against expectations of a flat print of +4.5). Finally, Chicago Fed's National Activity Index surged unexpectedly to six-month highs (+0.16 vs -0.20 exp) but the smoother 3-month avg remains in contraction for its 17th straight month.

Mario Draghi's "Whatever-er It Takes"-Promising ECB Press Conference - Live Feed

While sovereign and corporate bond markets might suggest 'all is well', the collapse of European consumer confidence indicates "whatever it takes" has failed and while Mario Draghi kept rates unchanged and maintained his global QE buying program, we suspect the need to offer another banal bone of hope for an artificial market running on fumes will overhwhelm any rational thought left in the former Goldman banker's mind.

What To Expect In Today's ECB Announcement: "Time To Send Another Dovish Signal"

Following the previously noted fireworks from Kuroda, who in a BBC interview said that there is "no possibility" of helicopter money (which however the WSJ quickly added was based on an interview conducted in mid-June which supposedly means there is possibility now) In under an hour the market will turn its attention to the ECB's latest statement, where as SocGen's Anatoli Annenkov writes, it is "time to send another dovish signal."

Yen Soars, Stocks Slide After Kuroda Says "No Need Or Possibility For Helicopter Money"

In a surprising rejection of Ben Bernanke, BOJ governor Haruhiko Kuroda said that there will be no helicopter money in Japan, amid increasing speculation over monetary and fiscal policy in the world’s third-largest economy. Given the current institutional setting, there is "no need and no possibility for helicopter money," Kuroda said in a BBC Radio 4 program that was broadcast Thursday. “At this moment, the Bank of Japan has three options with quantitative and qualitative easing with negative interest rates."

US Futures Rise To Session Highs, Set For Another Record Open; Global Stocks Jump

After yesterday's positive close in the Dow Jones, which hasn't had a losing day since July 7 and which took the series of consecutive green closes to 8 in a row - the longest stretch since 2013 - the index will look to lock in its 9th green day in a row with futures currently trading well in the green. It's not just the US - equities edged higher in Asia and Europe as positive earnings results from some of the world’s biggest companies countered concern the global economy is losing steam. The dollar strengthened while gold retreated.

"Whatever It Takes" Has Failed - European Economic Confidence Crashes To 4-Year Lows

If the premise of central-banking largesse is to maintain (or inspire) economic confidence, then Mario Draghi's smoke and mirrors have officially failed. This morning's ZEW data on German and European Consumer confidence is a disaster. Both the current situation and expectations for Germany tumbled but most worryingly, the 'hope' for European economic growth has crashed to its lowest since Draghi promised to do "whatever it takes" in the summer of 2012.