Consumer Prices

Stocks Resume Rout After Massive Chinese Intervention Fails To Lift Shanghai, Calm Traders

After yesterday's historic -6.9% rout in the Shanghai Composite, which saw the first new marketwide circuit breaker trading halt applied to Chinese stocks (on its first day of operation), many were wondering if the Chinese government would intervene in both the once again imploding stock market, as well as China's plunging and rapidly devaluing currency. And, after the SHCOMP opened down -3%, the government did not disappoint and promptly intervened in both the Yuan as well as the stock market, however with very mixed results which global stocks took a sign that the "national team" is no longer focused solely on stocks, and have resumed selling for a second consecutive day. 

2016 Is An Easy Year To Predict

No year is ever easy to predict, if only because if it were, that would take all the fun out of life. But still, predictions for 2016 look quite a bit easier than other years. This is because a whole bunch of irreversible things happened in 2015 that were not recognized for what they are, either intentionally or by ‘accident’. Things that will therefore now be forced to play out in 2016, when denial will no longer be an available option. Simply put, 2016 will be the year when a lot of ‘underlying wealth’ evaporates.

Canadian Dollar Crashes To 12-Year Low After Collapse In Consumer Prices

Not since December 2013 have Canadian Consumer Prices dropped by such a large amount. November CPI dropped 0.3% MoM, dramatically worse than expected to the largest drop since Dec 2013. The largest YoY drop in Canadian CPI, amid a surge in inventories relative to a collapsee in wholesale sales sent the loonie crashing above 1.4000 for the first time since August 2003.

Frontrunning: December 16

  • Fed Poised to Mark the End of an Era (Hilsenrath)
  • Fed opens meeting to put an end to crisis era policy (Reuters)
  • Fed's Historic Liftoff and Everything After: Decision Day Guide (BBG)
  • Emerging Markets Gird for Fed Rate Increase (WSJ)
  • What 7 Years at Zero Rates Have Looked Like (BBG)
  • 5 Things to Watch at the Fed Meeting (WSJ)

Brazil Devolves Into Full-Blown Political Crisis With Launch Of Impeachment Proceedings Against President Rouseff

Moments ago Brazil lower house chief Eduardo Cunha announced that he has accepted an impeachment request filed by Helio Bicudo. Cunha told reporters in Brasilia that the decision is not political, and while one can debate that, the implications will have a tremendous impact on both Brazil's political situation not to mention its already imploding economy. Cunha told reporters in Brasilia on Wednesday he "profoundly regrets" what’s happening. "May our country overcome this process." The impeachment process could take months, involving several votes in Congress that ultimately may result in the president’s ouster.

Global Stocks Start Off December With A Bang, US Equity Futures Rebound; Yuan Drops

There was something for everyone in last night's much anticipated Chinese PMI data, with the official number sliding to the lowest in over 3 years, suggesting the PBOC will need to do more stimulus and is thus bullish, while the unoffocial Caixin print rising to the highest since June, suggesting whatever the PBOC is doing is working, and is also bullish. Not unexpectedly, global stocks decided to take the bullish way out, and have risen across the globe led by Asia, where stocks rose as much as 1.8%, Europe also green and US equity futures up 10 points as of this writing.

China Plunges Most In Three Months, Pushing "Black Friday" Into The Red For Global Stocks

After several months of artificial, centrally-planned calm in Chinese markets, where "malicious sellers" found out the hard way the Politburo means business, overnight the relative quiet in Chinese stocks since August broke with a bang when the Shanghai Composite tumbled as much 6.1% before closing down 5.5%, the biggest drop in three months and the largest weekly loss since the depth of the Chinese rout in mid-August while a gauge of Chinese volatility surged from the lowest level since March.

Healthcare & Housing Cost Surge Sparks Biggest Rise In Core Consumer Prices Rise In 16 Months

Following September's strongest Core CPI gain since June 2014, October accelerated that modestly with CPI ex food and energy rising 1.9% YoY. Broad CPI rose 0.2% YoY (slightly better than the 0.1% expected rise) - the highest sicne December. Month-over-month saw new and used vehicle prices drop, Apparel prices drop 0.8% (most since Dec 2014), PCs drop 0.9%, but was notably offset by the bigger-weighting in Medical Care which rose 0.7% MoM (3.0% YoY) and Shelter rose 3.2% YoY.