John Williams

Key Events In The Coming Vacation Week: All About Inflation

With the traditional post-payrolls market lull setting in, and most trading desks taking a week or two off, it will be a relatively quiet week with attention turning to inflation data with releases in the US, China, Norway & Switzerland, a key factor as central banks consider if/when to tighten in the near future.

Global Stocks Rise On "Growth Optimism", Ignore Political Turmoil; Dollar, Oil Creep Higher

S&P futures rose 0.1% on the last trading day of the month, trailing European and Asian markets boosted by China's July Mfg. PMI, which despite declining from from 51.7 to 51.4, and missing expecations  of 51.5, saw the construction index rise to its highest level since December 13, sending Chinese iron ore futures surging and the European commodity sector broadly higher.

Goldman Is Troubled By The Fed's Growing Warnings About High Asset Prices

"At this point, the FOMC does not need additional reasons for gradual further tightening, which a traditional reaction function based on the dual mandate suggests is already warranted. But Fed officials do appear more concerned about financial stability risks, and this could strengthen the case somewhat for tightening in the future."

Key Events In The Coming Holiday-Shortened Week: Payrolls, Fed Minutes, ISM, G-20

The key economic releases this week are ISM manufacturing on Monday, ISM non-manufacturing on Thursday, and the employment report on Friday. There are several scheduled speaking engagements by Fed officials this week, including a speech by Fed Vice Chair Fischer on Thursday. The minutes from the June FOMC meeting will be released on Wednesday.

Bill Blain: "The 1-, 4- And 10-Year Cycles Top Out Mid-August At Which Point Be Very Afraid... Or Something Like That"

"Steve has thrown his bag of market bones into the air, and based how they’ve landed, his market read is for the current cycle to bottom in the next few days and could well turn positive into August. He’s got a wary eye looking at 1 year, 4 year and 10-year cycles which don’t top out till mid-August – at which point… Be very afraid.. or something like that..."

The Fed's Third Mandate Is Official

"The FOMC wants stocks to stop rising, and they will keep raising rates until they stop... It is stunning that markets are not taking these words more seriously..."