Consumer Confidence

UMich Is Worried About "Consumer Resilience" As Sentiment Tumbles To September Lows

We were wrong: several minutes ago when we documented the collapse in the Gallup Economic confidence, we said that "we look forward to the UMich confidence report to beat expectations when it is released in just a few minutes." Moments ago the official print came out and it was not pretty: sliding from 91 to 89.7, not only did the print miss expectations of a rebound to 92.0, but was the lowest print since September 2015. The reason for the drop? Consumers reported a slowdown in expected wage gains, weakening inflation-adjusted income expectations, and growing concerns that slowing economic growth would reduce the pace of job creation.

Frontrunning: April 7

  • U.S. readies bank rule on shell companies amid 'Panama Papers' fury (Reuters)
  • Co-Founder of Mossack Fonseca Defends Law Firm at Center of ‘Panama Papers’ (WSJ)
  • Fed's Cautious Approach on April Rate Hike Raises Stakes for June (BBG)
  • Dollar sinks again after Fed remains cautious (Reuters)
  • New Tax Rules on Inversion Deals Are Met With Protest (WSJ)
  • Fed Chairs Since 1979 Offer Peek Into Central-Bank Philosophy (BBG)

China's Latest Problem: Surging Subprime-Housing Loans

Government efforts to tackle a glut of vacant housing in China by spurring home lending have triggered a bigger problem: a surge in risky subprime-style loans that is generating alarm. Home buyers in China normally put down a third of the cost of a new property upfront. But a rapid rise in buyers borrowing for their down payments—an echo of the easy credit that cratered the U.S. housing market and sparked the financial crisis—has led authorities to clamp down

Fed Levitation & The Looming Liquidity Trap

Like the “little Dutch boy,” the Fed currently has a finger stuck in every hole of the dike. The only question is how long is it before the Federal Reserve runs out of “fingers” to plug the next leak?

As Conference Board Confidence Jumps, Gallup Confidence Dumps

A yuuge surge in stocks - amid collapsing earnings and GDP expectations - appears to have enabled a modest bounce off 2-year lows for consumer confidence. The Conference Board’s index of consumer confidence increased to 96.2 in March from 94 a month earlier - but still below January's levels. The bounce was driven purely by "hope" as expectations for the future rose and current conditions dropped to 4-month lows. At the same time Gallup's consumer confidence survey plumbes new depths to its lowest since 2015.

Futures, Oil Dip On Stronger Dollar Ahead Of "Hawkish" Yellen Speech

With Europe back from Easter break, we are seeing a modest continuation of the dollar strength witnessed every day last week, which in turn is pressuring oil and the commodity complex, and leading to some selling in US equity futures (down 0.2% to 2024) ahead of today's main event which is Janet Yellen's speech as the Economic Club of New York at 12:20pm, an event which judging by risk assets so far is expected to be far more hawkish than dovish: after all the S&P 500 is north of 2,000 for now.

Global Stocks Levitate Despite Ongoing Oil Weakness; China Stocks Jump After Easing Margin Debt

At the same time as the PBOC was cautioning about the dangers of excess debt (just as it injected a record amount of loans into the financial system), China's central bank warned about dangers from a stock market bubble, and perhaps just to assure the bubble gets even bigger, at the same time China eased on margin debt limits, in the process sending Chinese stocks soaring higher by 2.2%, and pushing the Shanghai Composite over 3000 for the first time in months as China now appears set to attempt another housing bubble "soft landing" while at the same time restarting its housing bubble.

Consumer Confidence Tumbles To 5-Month Lows As "Hope" Fades

But, but, but - low gas prices, high stock prices... everything is awesome. It appears not even the average joe American consumer is fooled by the latest manufactured rally in stock prices as UMich confidence tumbles to 5-month lows (90 vs 92.2 exp) with future expectations "hope" perfectly anti-correlated with the surge in stocks...

JPM Looks At Draghi's "Package," Calls It "Solid," But Underwhelming

"On the negative side, the forward inflation targets were downgraded substantially, ECB didn’t address the issue of capacity constraints, and the shift in focus away from facilitating further currency depreciation will, in our view, end up being a negative for region’s equity market. Overall, we believe the latest package is far from a game changer."

Life And Times During The Great Depression

I thought the Depression was going to go on forever. For six or seven years, it didn’t look as though things were getting better. The people in Washington DC said they were, but ask the man on the road? He was hungry and his clothes were ragged and he didn’t have a job. He didn’t think things were picking up.”

Most "Priced In" Policy Since 2011 - Why Draghi Better Not Disappoint

Mario Draghi better put up or shut up at the next ECB meeting as the market is more-than-pricing-in a very significant deposit rate cut (deeper into NIRP). In fact, at -56bps, 2Y German bond yields are the most "priced in" since 2011 (and bear in mind he disappointed in December).