An Unrepresentative Day

November 21, 2018

Equities have rebounded but just partly from earlier steep losses this week. Moreover, being the day before the U.S. Thanksgiving, trading is distorted and should probably not be viewed as representative of either economic and political fundamentals or of the state of investor psychology.

U.S. stocks are up less sharply than those in Germany, Canada or the U.K..

Ten-year sovereign debt yields fell 11 basis points in Italy but are little changed in Germany Japan, the U.K. or the United States.

Gold and WTI oil are up 0.8% and 1.0%, respectively.

The dollar declined overnight by 0.9% against the kiwi, 0.8% versus the Aussie dollar, 0.4% relative to the euro, 0.2% against the the loonie and 0.1% each versus sterling and the Swiss franc. The dollar firmed 0.3% against the yen.

A bunch of sour U.S. economic data was released:

  • Durable goods orders plunged 4.4% in October, their greatest monthly drop in 15 months.
  • The U. Michigan/Reuters consumer sentiment index for November got revised 0.8 points lower to 97.5, a three month low and the second weakest reading since January.
  • After climbing 0.5% in August and 0.6% in September, the U.S. index of leading economic indicators only edged 0.1% higher in October.
  • Existing home sales rose 1.4%¬† in October, which reverses less than half of September’s drop to a 3-year low.
  • Mortgage applications dipped another 0.1% last week after a 3.2% slide in the prior week.
  • Jobless insurance claims averaged 218.5K during the four weeks ending November 11th. That’s up from a 206.25K four week average through September 22.

Japan’s all-industry index, a monthly supply-side proxy for GDP, slumped 0.9% in September and 0.8% in the third quarter. September’s reading was marginally below its year-earlier value, too.

Japanese department store sales in October were 1.6% higher than a year earlier, but supermarket sales fell 0.7%.

The British budget deficit was the biggest one for October in three years. That didn’t prevent the accrued deficit over the first seven¬† months of the current fiscal year from being the smallest gap in 13 years.

South African CPI inflation rose to a 3-month high of 5.1% in October. Core CPI remained level at 4.2%.

Spain’s year-to-date trade deficit through September (EUR 24.2 billion in size) was 30.5% greater than a year earlier.

Dutch consumer confidence weakened for a fourth straight month, printing at a reading of 13 in November versus 15 in October and 23 last July.

Canadian wholesale turnover contracted 0.5% in September and by 0.6% in the third quarter as a whole. September turnover was 3.8% higher than a year earlier.

Copyright 2018, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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