Wall Street Kneejerk Responses To This Morning's Disappointing Economic Data Barrage

Tyler Durden's picture

The economic data this morning was bad across the board, as it has been for the past month, and without even looking at the futures we are certain that it is green across the board: nothing reflects reality any more, least of all the stock market, which is now trading based purely on short squeezes (as we warned two days ago), and a spike in hopes for QE4 (QE3 is already priced in). Regardless, here is a compilation of kneejerk Wall Street responses courtesy of Reuters.

PETER KENNY, MANAGING DIRECTOR, KNIGHT CAPITAL, JERSEY CITY, NEW JERSEY:

"We got a lot of data that cannot be spun in any way other than we are continuing to see weakness, we are continuing to see a complete dearth of growth and frankly, it's not a surprise. Markets reacted pretty much in-line, these numbers are not good, but they are not apocalyptic either. They are not good, they are trend confirming, so the recent rally we've seen this week is probably going to come under a little bit of pressure."

"Look, these numbers don't instill confidence and any policy wonk that comes on the tube that tries to make these numbers look better than they are -- there is nothing but sellers on the Street. Not for the markets, per se, but for that whole concept to try to make this look better -- it's unattractive."

MICHELLE MEYER, SENIOR ECONOMIST, BANK OF AMERICA MERRILL LYNCH, NEW YORK:

"Overall we see that activity is slowing down, and core inflation is a surprise on the upside, which is not a good combination when you think that Fed has to consider both sides of the mandate.

"The Fed can still do some additional easing given the weakness of the forward indicators. We can at least see a passive 'Operation Twist' next week. I think at this point business activity has slowed and confidence has fallen. But we haven't slipped into a recession yet."

SEAN INCREMONA, ECONOMIST, 4CAST LTD, NEW YORK:

"The overall picture from the three data releases we are looking at is not very good. Empire State continued to deteriorate in a month where many were expecting to see a slightly less negative picture. That is really not an encouraging sign.

"Initial claims had a pretty big increase, that really offsets any of the downside progress we had seen over the past few months. The layoff side of the equation is really starting to pick up now and that is a very bad sign on the employment side.

"CPI was larger than expected and that looks like a temporary boost from energy, but still inflation is not going down and activity is not doing well."

VIMOMBI NSHOM, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS

ON JOBLESS CLAIMS:

"While there are sure to be some hurricane-influenced claims embedded in the level, Hurricane Irene does not appear to be the catalyst for the elevated filings. For starters, the states reporting higher-than-usual claims (of more than 1k) in the week ending September 3 were not along the East coast (Irene's path). These included states like Washington, Nevada, Texas, and the highest change, Kansas. Secondly, the actual number of filers fell, just not as much as seasonals expected, so the seasonally adjusted number rose. Whenever a survey week carries a holiday, seasonals expect a decline in claims. This year, the NSA drop was about 8k smaller than forecast. Initial claim's moving average has also risen about 16k in the past four weeks. Now at 419,500, the average is 4k higher than last week's."

CPI:

"Consumer prices rose by 0.4% in August, showing an increase larger than the market was expecting (0.2%) after prices rose 0.5% in July. The same items contributed to increase, especially within the core group. Core CPI rose by 0.2% for the second month. Prices are 3.8% higher than what they were 12 months ago. Prior to August, the CPI's annual change had held for three months at 3.6%....

"Core prices have been alternating between 0.2% growth and 0.3% for the past five months as an emerging trend of consistent growth in certain items has taken shape. Apparel, being one of those items, rose by 1.1% in August, its fourth month of above-1% advances. The rent index experienced its largest increase in roughly three years (June '08), up 0.4% thanks to a 0.2% rise in owners' equivalent rent."

THEODORE LITTLETON, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS:

EMPIRE STATE MANUFACTURING INDEX:

"The internals looked somewhat worse than the headline on net. The new orders index edged down from -7.82 to -8.00, shipments plunged from +3.01 to -12.88 (the weakest since March 2009), and the current employment index fell from +3.26 to -5.43. Despite the general economic softness and slowdown in manufacturing, both price indices moved higher, with prices paid rising from +28.26 to +32.61 and prices received going from +2.17 to +8.70. It was the first increase in both for four months. The slight silver lining was that the expectations indices improved modestly, with the future activity index rising from +8.70 to +13.04 -- but that's a small dead cat bounce after falling from July's +32.22... This is a disappointing reading, seemingly confirming that the weakness in manufacturing is more durable than the turbulence of last month's debt limit battle, S&P downgrade, and market swings."