Personal Consumption

UBS Makes A Striking Discovery: Ex-Energy, US GDP Growth Is The Slowest Since 2010

According to UBS, global growth acceleration in 2017 was largely a commodity bounce, and nowhere more so perhaps than in the US which was 20% of the global growth improvement but, again entirely energy investment. Once you strip that out 'underlying' growth is only 1% or so (ex inventories) - the slowest since 2010! 

The Savings Rate Conundrum

"With the average American still living well beyond their means, the reality is that economic growth will remain mired at lower levels as savings continue to be diverted from productive investment into debt service."

Why Today's Big Fed Risk Is A "Dovish Surprise": One Trader Explains

"There’s much greater potential for rates to fall than rise in reaction to the Fed decision and statement on Wednesday... While an anticlimactic Fed decision may be a reasonable base case, it’s rare to approach such a meeting where the potential market reaction is so largely skewed in one direction."

S&P Futures Slide After Chinese Stock And Bond Rout; Spain Rebounds, Dollar Drops

U.S. futures slid 0.2% as investors awaited a barrage of announcements including Wednesday's Fed decision, Friday's jobs report and, most importantly Trump's imminent announcement of who the next Fed chairman will be, although after the latest trial balloons, Jay Powell is now largely priced in, even as they kept a weary eye on the biggest Chinese stock and bond rout in months.

Key Events In The Coming Week: ECB Taper, Q3 GDP And Durables

The main even this week will be the ECB's taper announcement on Thursday where consensus expects the ECB to announce a QE extension of €30bn per month for 9 month until Sep-18, with potential extension after. Net purchases between now and Dec-17 will continue at €60bn per month as planned. To cope with rate hike expectations, the ECB is also expected to strengthen forward guidance.

Investors Are Ignoring The Evidence At Their Peril

"Exuberance and confidence are at the highest levels on record, but the underlying stories are beginning to weave a tale of an economy that is very late in the current cycle... Importantly, these are not short-term stories either. The long-term picture for the economy and the markets from the three biggest factors (Debt, Deflation, and Demographics) continues to build."

Producer Prices Surge At Fastest Rate In Over 5 Years (Thanks To Hurricane Harvey)

Great news America - your standard of living just dropped little more as producer prices rose by 2.6% YoY in September, the fastest rate of increase since Feb 2012 - driven by a surge in energy prices. This no doubt relieves some pressure on the 'transitory' Fed - enabling higher rates (and yet lower living standards)