Wholesale Inventories

Global Stocks Sharply Lower As Bond Yields Hit New Record Lows; Oil Slides Below $50

Global stocks, U.S. index futures are sharply lower pressured by fears of another day of record low bond yields, as investors start to worry about numerous risk catalysts in the coming weeks, from the Brexit vote to Fed meeting. The Dollar spot index rose for the second day in a row, pushing commodities lower for their first two-day decline since May 24, while WTI has dipped back under $50.

Wholesale Inventories Rise Most In 10 Months, Sales Miss; Ratio Only Higher Post-Lehman

Wholesale inventories rose more than expected in April (up 0.6% MoM vs 0.1% exp) - the biggest monthly jump in 10 months - but sales disappointed (rising only 1.0% versus a 1.1% expectation). This sales growth topping inventory growth is a positive but for context the inventory-to-sales ratio remains at 1.35x - the highest level ex-Lehman on record.

Futures Slide On Rising Dollar As Global Bond Yields Hit Fresh Record Lows

Please do not adjust your screens: that off-green color you are seeing, that is not a malfunction. Yes, for the first time in six days, global stocks are lower with the MSCI all-country world index dipping from a 6 month high dragged down by lower European and Japanese equity markets, as the USDJPY dropped to a fresh five-week low while Treasury yields continued to hit new record lows because, as Bloomberg explains, "traders assessed the outlook for the global economy."

Key Events In The Coming Week

After last week's global data deluge which culminated with the worst US jobs reported in 6 years, looking at this week’s calendar we get the usual post-payrolls data lull, punctuated by Yellen's speech today which will be the last scheduled Fed statement before the June FOMC.

Futures Flat Following Friday's Jobs Fiasco: All Eyes On Yellen Again

Every ugly jobs report has a silver lining, and sure enough following Friday's disastrous jobs report, global mining and energy companies rallied alongside commodities after the jobs data crushed speculation the Fed would raise interest rates this month.  “The disappointing U.S. jobs report on Friday means that a summer Fed rate hike is off the table,” said Jens Pedersen, a commodities analyst at Danske Bank. “That has reversed the upwards trend in the dollar, supporting commodities on a broader basis. The market will look for confirmation in Yellen’s speech later today.”

US Futures, European Stocks Drop As USDJPY Tumbles

One day after the biggest jump in stocks in two months on what has still been an undetermined catalyst, overnight global equities did a U-turn with European stocks falling toward a one-month low and U.S. stock index futures declining, as crude oil dropped toward $44 a barrel. A driver the move lower was a sharp reversal in the USDJPY which dropped 100 pips from yesterday's highs which took places just as Goldman predicted the USDJPY has finally bottomed, facilitated by a weaker dollar (also following a Goldman report yesterday forecasting the USD was about to surge).

Wholesale Inventories-Sales Ratio Holds Near Record Highs As Automakers Suffer

While wholesale sales rose modestly MoM, the continued stagnation in wholesale inventories (lowest since 2010) bodes poorly for Q2 GDP. At 1.36x, the wholesale inventories-to-sales remains near record highs, but Automotive inventories to sales soared to cycle highs at 1.83x (as Auto sales dropped 0.7% MoM but inventories rose 1.0% MoM).

Global Stocks Jump; Oil Rises As Yen Plunges After Another Japanese FX Intervention Threat

In what has been an approximate repeat of the Monday overnight session, global stocks and US futures rose around the world as oil prices climbed toward $44 a barrel, with risk-sentiment pushed higher by another plunge in the Yen which has now soared 300 pips since the Friday post-payroll kneejerk reaction, and was trading above 109.20 this morning. At the same time base metals regained some of Monday’s steep losses following Chinese CPI data that came in line while PPI declined for 50 consecutive months however showed a modest rebound from the prior month on the back of China's recent, and now burst, speculative commodity bubble.

Key U.S. Events In The Coming Week

In the traditional post payrolls data lull, we’re kicking off what’s set to be a much quieter week for data this week with nothing of note due to be released in the US on Monday, however the week picks up with notable economic dataon NFIB small business cofidence, Import prices, PPI and culminates with Friday's retail sales report, UMichigan sentiment and business inventories.

US Economy - Ongoing Distortions

The economy’s capital structure remains imbalanced as a result of the enormous amount of monetary pumping since 2008 (total TMS-2 growth since then: approx. 128%). There is a limit to this though, even if it cannot be quantified. What can be stated though is that the greater the boom, the greater the eventual bust usually is. There are now more and more indications that a decisive inflection point may be quite near.

How Wall Street's Biggest Permabull Became Its Go To Permabear

Ever since the beginning of 2016 and especially in the last few weeks, while Hugh Hendry has been chugging horse doses of blue pills, Joe LaVorgna has finally discovered the red pill, and perhaps because he has been focusing a little to much on the performance of the stock price of his employer, or for whatever other reason, gradually Wall Street's biggest bull has mutated into its most outspoken bear.

U.S. Futures Jump In Tandem With Soaring Italian Banks On Hopes Of Government Bailout

it has been a rather quiet session, which saw Japan modestly lower dragged again by a lower USDJPY which hit fresh 17 month lows around 170.6 before staging another modest rebound and halting a six-day run of gains; China bounced after a slightly disappointing CPI print gave hope there is more space for the PBOC to ease; European equities rose, led by Italian banks which surged ahead of a meeting to discuss the rescue of various insolvent Italian banks, while mining stocks jumped buoyed by rising metal prices with signs of a pick-up in Chinese industrial demand.

Wholsale Inventories Drop Most Since 2013; Sales Miss As Slowdown Accelerates

There was one thing keeping US GDP growing in recent months: rising inventory. Well, no more. Moments ago the Dept of Commerce reported the latest inventory data and following major historical revisions, not only was last month's inventory print slashes from 0.3% to -0.2%, but the February Inventory number was a dramatic -0.5% drop, far below the -0.2% expected.

Stocks To Reopen In The Green For 2016 After Crude, USDJPY Rebound

In the final day of the week, it has again been a story of currencies and commodities setting stock prices, however instead of yesterday's Yen surge which slammed the USDJPY as low as 107.67 and led to a global tumble in equities, and crude slide, today has been a mirror imoage after a modest FX short squeeze, which sent the Yen pair as high as 109.1, before easing back to the 108.80 range. This, coupled with a 3.5% bounce in WTI, which is back up to $38.54 and up 4.9% on the week as speculation has returned that Russia and OPEC members can reach a production freeze deal on April 17, led to a global stock rebound which will see the S&P open back in the green for 2016.

Key U.S. Events In The Coming Week

Key economic releases for the coming week include the ISM non-manufacturing report on Wednesday. There are several scheduled speeches from Fed officials this week. Fed Chair Yellen will take part in a discussion with former Fed Chairs on Thursday.