Personal Income

Bad Data, Broader Alarms, And Business Cycles

The economy is pointing downward with alarms ringing in a wider and broader variety of important economic accounts. From this view, it is no wonder the FOMC overreacted to the May payroll report; that’s all that is left as it is more and more isolated.

Rising Recession Risks & The Tears In America's Economic Fabric

Stock market “bulls” should pray that interest rates don’t rise. Don’t blame those poor consumers for not spending – they are spending everything they have and then some. Just one word describes the outcome of that event given the current excessively leveraged consumption based economy of today – disaster.

World Stocks Drop For Third Day On Growing Concerns About Central Bank Policy, Tumbling Oil

After 7 consecutive drops in the Dow Jones, the Industrial average is set for an 8th decline with US equity futures modestly lower in the premarket as risk-averse sentiment persists overnight. Oil’s continued slide and recent plunge into a bear market, despite some stabilization this morning just south of $40, has finally rekindled global growth concerns, and is keeping a lid on bullishness. European stocks are little changed, while Asian stocks and S&P futures fall.

Hidden In Today's Revised Personal Income Data, A Troubling Trend For The US Consumer

As of this moment, absent a substantial pick up in wages and disposable income in general, US spending - that key driver of US GDP - is about to slow down sharply as the savings rate enters the red zone. As shown in the chart above, every time the savings rate hits about 5%, consumers slow down. The problem is that it comes just as spending in Q1 supposedly soared.

US Personal Income Growth Slumps To Lowest Since 2013, Spending Rises

Savings are slumping (which means credit is surging) as the American consumer keeps on spending (+3.7% YoY near highest since May 2015) despite income growth at its slowest since Dec 2013 (+2.7% YoY). The diverging trend of the last 6 months (higher spending, lower income) is unlikely to last but with the savings rate at 5.3% (down from 6.2%)at March 2014 lows, we suspect the run way is running out.

Global Shares Slide As Japan Stimulus Disappoints, RBA Underwhelems, Italy Bank Fears Return

European stocks slid to a two-week low amid mixed earnings, as bank stocks extended yesterday’s decline as fears that Italy is not "fixed" have reemerged, not helped by an adverse market reaction to a disappointing Japanese fiscal stimulus announcement, while the AUD first dropped but then jumped after the RBA's priced in rate cut was announced, seen as underwhelming.

Preview Of Key Events In The Coming Week

After last week's central bank and GDP fireworks, we have another busy week on deck culminating with Friday's jobs report, the 100% priced in BOE rate cut, as well as a possible easing by the RBA.Here is the full breakdown.

Your Last Minute Payrolls Preview

  • US Change in Nonfarm Payrolls (June) M/M Exp. 180K (Low 50K, High 243K, Prey. 38K, April. 160K)
  • US Unemployment Rate (June) M/M Exp. 4.8% (Low 4.7%, High 4.9%), Prey. 4.7%, April. 5.0%
  • US Average Hourly Earnings (June) M/M Exp. 0.2% (Low 0.1%, High 0.3%), Prey. 0.2%, April. 0.3%

Brexit Blowback - The Panic Will Start With Property

The problem lies mostly with the human tendency to avoid short-term pain...Unless it is accepted that demand must be tied to income growth, and not extra debt, we’re never getting out of this one. The current disconnect between high asset prices, stagnant incomes and increasing, overall debt levels, is both economically and politically unsustainable. And what is the ultimate result? Brexit politically and economically there is no housing market for our young workers.

Day 3 Of Global Post-Brexit Rally: European Stocks, US Futures At Session Highs

Day three of the post-Brexit rally continues, and after some initial weakness due to concerns about Chinese currency devaluation, both European stock and US equity futures were trading at session highs, facilitated by yesterday's stress test results which saw dozens of US banks unleash a tsunami of stock buyback announcement which in turn pushed S&P futures to new post-Brexit highs.

Global Stock Surge Continues As "Investors Look To Central Banks For Support"

Why the ongoing rally? A squeeze, sure, and also month-end fund flows. But the fundamental driver remains one and the same, and we quote Bloomberg: "the relief rally endures as Asian and European stocks rally with crude oil amid speculation policy makers will use stimulus to blunt the impact of the U.K.’s decision to leave the European Union, including a pause in the Federal Reserve’s tightening cycle. Investors are looking to policy makers for support."

Key Events In The Coming Week: All About Brexit

With global markets gyrating on every piece of news surrounding the Brexit drama, what’s the timetable for UK-related (and all other macro) events this week and beyond?

European Stocks, US Futures Extend Slide On UK Chaos, Pound Carnage

With global asset correlations once again approaching 1, overnight stocks have been trading in broadly "risk off" mode, following every twist of pound sterling and the rapidly deteriorating British financial situation as "chaos infects" virtually all markets, from China, to European banks, to US equity futures.  As a result of ongoing aftershocks from the Brexit vote, coupled with the sudden political chaos in UK politics, where both parties now seem in disarray, with the pound has extended its selloff to a fresh 31-year low dropping below the Friday lows while European equities are dropping to levels last seen in February.