More Favorable Data Reported for the U.S.

November 15, 2023

The U.S. producer price index dropped 0.5% on month (most in 42 months) and recorded a 3-month low of 1.3% when compared to the same month a year earlier. Core producer prices — unchanged versus September and +2.4% year-on-year — was 0.3 percentage points below expectations. U.S. October retail sales contracted by a smaller-than-anticipated 0.1% on month and recorded the smallest 12-month rate of rise (2.5%) since June, but Target’s third-quarter financials beat forecasts.

Stock future gains prior to the U.S. data have been trimmed a tad in their wake, but some profit-taking is to be expected following Tuesday’s strong rally. In overseas stock markets, Hong Kong, Japan, South Korea, Australia, and India closed up 3.9%, 2.2%, 1.4% and 1.1% today. The German, British and French stock markets are up 0.6-1.1% so far this Wednesday.

The dollar is narrowly mixed, but Bitcoin remains well-bid with a 1.5% advance so far. Gold has strengthened 0.5%, while oil is down 0.2%. The 10-year Treasury yield has rebounded six basis points to 4.5%.

Japanese real GDP fell 0.5% last quarter, equivalent to a 2.1% annualized pace of contraction that left GDP 1.2% above its year-earlier level. Personal consumption, net exports, and both residential and non-residential investment affected GDP growth adversely. Japanese industrial production growth in September got revised upward to 0.5% on month, but third-quarter changes of -1.2% versus 2Q and -3.6% on year remained in the red.

Chinese October data revealed an unchanged 22-month low jobless rate of 5.0% and on-year growth in retail sales and industrial production of 7.6% and 4.6%.

Price data were released by Britain, France, Italy and Germany as well as the aforementioned U.S..

British CPI inflation fell to a 2-year low 4.6% in October from 6.7% in September, and core CPI of 5.7% after 6.1% in the prior month was at an 18-month low but still too high. On-year drops of 0.6% in producer output prices and 2.6% in producer input prices were the most deflationary in 3 months.

French CPI inflation of 4.0% last month was unrevised and its lowest in 20 months.

Italian CPI inflation in October was revised 0.1 percentage point lower to a 28-month low of 1.7%.

German wholesale prices sank 0.7% on month in October, resulting in their biggest 12-month rate of decline (4.2%) in 41 months.

Euroland industrial production declined 1.1% in September, resulting in the largest 12-month contraction (6.9%) in 39 months.

The euro area experienced its sixth seasonally adjusted trade surplus in seven months in September, although such shrunk to EUR 9.2 billion from EUR 11.1 billion in August. The unadjusted trade balance swung from a EUR 275 billion deficit in the first three quarters of 2022 to a surplus of EUR 16.3 billion so far this year.

Australia’s wage price index jumped 1.3% on quarter in 3Q 2023 (the most in 26 years) and was 4.0% above its year-earlier level.

The People’s Bank of China didn’t change its 2.5% one-year MLF interest rate at this month’s fixing.

Expectations regarding today’s talks between the presidents of the U.S. and China at the APEC conference in San Francisco are understandably low.

Copyright 2023, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

Tags: , ,


Comments are closed.