GDPNow 05132015

Looking Pretty Calm Up Here You Guys

“Even though the S&P 500 has closed at an all-time high three times in the last week, investors are still waiting for breadth (i.e. more than just Carl Icahn Apple shares moving the market)…the current stretch of 61 trading days without a new high is the fourth longest drought of new highs in breadth for the entire bull market and the longest in nearly three years (December 2013).  At 61 days, though, the current drought of new highs in breadth has a ways to go before getting anywhere near the length of the three prior streaks.”  Meanwhile, “little conviction may actually be a good thing for stocks going forward…According to AAII, periods of unusually high neutral sentiment are typically followed by outsized returns in the equity market over the next six and 12 months…From 1987 until near the end of 2014, there were 71 instances of unusually high neutral sentiment.  Following such periods, the S&P 500 rose 86% of the time and averaged a 7.1% gain.”  Meanwhile, David Rosenberg says the current inflation and growth numbers are virtually perfect for stock investors: “In periods where real GDP growth is running between 2% and 3% at the same time that core inflation is between 1% and 2%, the average annual advance in the S&P 500 is 14.4%…Of course, the first-quarter GDP rate was atrocious, and the second quarter is looking weak as well, putting into doubt whether or not the U.S. economy can [produce] even 2% growth for the entire year  But don’t fret, according to Mr. Rosenberg’s table, the average S&P 500 advance when GDP falls to the 1% to 2% range slips only to about 13.7%.”

 

Under The Surface

“There’s a whiff of inflation in the air, thanks to Friday morning’s release of April’s Consumer Price Index (CPI).  The core CPI rose 0.3% in April, surprising economists and sending bond yields higher Friday morning…Core CPI is now up 2.6% annualized over the past three months…Is it strong enough to convince the Fed it can safely raise interest rates despite other weak recent economic reports?  Probably not, but it does provide some data in that direction.  However, the report also shows a 0% gain in real wages, which doesn’t bolster a case for inflation pressure.  Also, the year-over-year headline number posted a 0.2% decline.”  Meanwhile, “the debt millennials have incurred is a paradox for policymakers: A better educated workforce leads to a more powerful economy, but the rising costs of post-secondary education and inevitable interest rate hikes have created a looming debt trap for borrowers and a potential risk for the taxpayer.”  Meanwhile, next Friday we’ll find out if the Atlanta Fed’s GDPNow forecast is worth its salt.

 

WM: Josh Brown Gets Apocalyptic

 

Global: Academics Argue About War And Peace

Also, Zero Hedge got to use their three favorite words in this headline.

 

USA: BEA Is Looking Into “Residual Seasonality” In Their Data

bill murray

What If There Is No Tomorrow?

There’s been an abundance — nay, “cesspool of rotations” ever since the Fed announced the beginning of the end the tapering.  “Many were positioned this Jan for US macro liftoff.  Once weaker-than-expected Q1 data caused the Fed to ‘blink’ in March, an immediate painful US$ peak, biotech selloff and trough in oil prices ensued.”  Remember that?  About 6 months ago no one felt like chewing Mario Draghi’s grass?  Well: “investor appetite for U.S. stocks has slumped to its lowest level in more than seven years.  Though the S&P 500 has hit three new highs in May, the region has suffered its biggest drop in equity allocation since September 2008, with the number of investors overweight U.S. equities declining to a net 19% in May, according to [Merrill Lynch’s] monthly fund manager survey…Only 7% of those questioned cited the U.S. as the region with the most favorable earnings outlook.  The vast majority prefer Europe and Japan, where central banks are still committed to quantitative easing programs.”  “Not unlike the 1993 comedy ‘Groundhog Day,’…investors are doomed to relive a perpetual daisy chain of mediocre U.S. economic reports and lackluster returns from risky assets…Until (a) the US economy is unambiguously robust enough to allow the Fed to hike and (b) the Fed’s exit from zero rates is seen not to cause a market or macro shock (as it infamously did in 1937-7), the investment backdrop will likely continue to be cursed by mediocre returns, volatile trading rotation, correlation breakdowns and flash crashes.”  And Icahnic tweets: “Amidst this light trading volume environment, it does not take much to get markets moving.”  For example: the “market-moving impact of Carl Icahn, who tweeted on Monday that Apple is worth $240 a share.  That kick-started a rally in [Apple] and, it seems, the entire U.S. stock market…It is surprising to hear so many investors deny the bubbly nature of this market when such moves are now commonplace.”  Meanwhile, Tobin’s Q is getting a lot of attention suddenly: “Valuation tools are being dusted off around Wall Street…If you sold every share of every company in the U.S. and used the money to buy up all the factories, machines and inventory, you’d have some cash left over.  That (literally) is the math behind a bear case on equities that says prices have outrun reality.”  Meanwhile, here are some better questions to be asking yourself.  Also, what if everything started to go right in the world economy?

 

USA: Nah Just Kidding, There’s A Recession Coming

 

What: It’s Up To Us To Understand How The Leap Second Will Impact Our World

candy crush mascot on NYSE floor

Enamored With Easy Money The Bull

There is a strange amount of taunting going on in financial media right now.  Exhibit A: We Dare You To Try Raising Rates This Year.  “The market is essentially calling the Fed’s bluff.  Traders are betting that policy makers won’t be able to raise rates this year…’In the end, the Fed is more likely to ‘cave’ to the market as opposed to ‘fight it’ by hiking when the market does not have it priced in.’”  Exhibit B: Fed Rate Move Will Make Doves Cry.  “There are some investors…who don’t think any increase will happen this year.  It is this last group — who are likely enamored of sectors paying big dividends, such as utilities and master limited partnerships — the Fed has to worry about…If the Fed does raise rates in September, these folks are going to be surprised — and inflict a few shocks of their own on vulnerable sectors.”  But wait…what if it’s all going to be fine you guys?  “Think about it: bond yields have spiked over the past two weeks…The stock market, however, hasn’t really been hurt that much as this has been going on.”  And “the more people see examples of rising yields and a fairly stable stock market, the more this ‘it’s going to be OK’ idea slips into daily conversations at steakhouses, by water coolers, and at lunches with clients.”  Meanwhile, Jesse Livermore (of blogging/Twitter fame, not, like, real life Jesse Livermore fame…that would be weird because real life JL is really dead) has significantly changed his tone on profit margins and I highly recommend reading this entire post but here’s the key point: “dramatic technological changes of the last 20 years have made credible competition in certain key sectors of our economy more difficult, and have allowed dominant [companies] to command sustainably higher profit margins.”  He argues that barriers to competition are most pronounced “where the dominant players have pricing power,” e.g. finance, technology and health care.  In conclusion, the undead Livermore thinks “bearishly inclined investors should seriously consider the possibility that the ‘mean-reversion’ that they’ve been patiently waiting for is not going to happen, at least not to the extent expected.”  Meanwhile CHECK OUT THE GROWTH.

 

WM: More On VaR-Shocks

 

EU: Tom’s New Strategy Is Just Let Jerry Self-Destruct

 

USA: Chicago, Let Me Downgrade Ya!

 

ICYMI: Atlanta Fed’s GDPNow Is Definitely Worth Following

ps. doesn’t really jive with “CHECK OUT THE GROWTH”

 

Fed: Some Fed Economists Think Your Polar Vortex Is A Sh*** Excuse

 

WM: Algorithms Have Really Made The Markets Unsafe For Comedy

 

What: Shares Of Printing Company Rise On Rumors Of New Greek Currency

Interstellar BuzzFeed

Those Aren’t Mountains…

The “esoteric concern on almost everybody’s lips” these days is bond market liquidity: “while banks have cut their inventories of bonds, asset managers have recently been gobbling them up…But the catch is that many asset managers rely on potentially flighty forms of funding (ETFs anyone?)…If US rates suddenly rise, retail investors might flood out of bond funds…If that happens, those funds might discover the bonds are completely illiquid, or untradeable except at rock bottom prices…Thankfully, nobody expects the test to come quite yet.”  Whew!  Nice.  So, what might be driving that expectation?  “The sole bright spot is the eurozone”–this is where your lower jaw falls slightly and you start questioning the decision to keep reading this “connect the dots” nonsense — “The gap between US and eurozone growth has, for now, disappeared completely.  Overall, the growth rate of the global economy has therefore slowed further…Activity growth needs to recover markedly in the next few weeks if a generalised downgrade to global growth forecasts for the 2015 calendar year is to be avoided.”  “Like a pilot spotting a smoking engine at take-off, the US Federal Reserve is having second thoughts about when to raise interest rates…[A delay] may change the shape of the global recovery, crushing hopes for a sharp rebound in the eurozone (On the back of Wednesday’s Fed statement, the euro soared to $1.125), while removing some of the gloom from the outlook for emerging markets…The longer [the Fed] waits before cutting interest rates, the further they can go with loosening monetary policy.”  Furthermore, “emerging markets may find a surprise ally in Europe.  A stronger euro would make it harder for the ECB to meet its inflation target, [leaving them with] little option but to continue with their QE programme…But they should not take too much comfort.  Fed increases are powerful tsunamis — within hours, their effects are felt even on the furthest shores.”  Meanwhile, Vanguard says that “while you might expect the prospect of the Federal Reserve raising interest rates to put the brakes on capital inflows into emerging markets, thereby worsening their financing problems, our research suggests that doesn’t have to be the case…While financial crises have coincided with a drying up of capital inflows to emerging markets, that’s been less true of monetary tightening by the Fed.”  Getting back to the US for a minute, Gavyn Davies says the “persistent tendency for US growth to disappoint” is due to one or both of the following: “weak aggregate demand, owing to a demand-side form of ‘secular stagnation’; or a permanent slowdown in productivity growth…Ultimately, the behaviour of US inflation will distinguish between the two competing hypotheses, and the Federal Reserve will have to set policy accordingly.”  Meanwhile, “if these interest rates were to continue for 10 years, stocks would be extremely cheap now,” says Warren Buffett.  Meanwhile, John Hussman understands that using the Greek alphabet is a quick way to a financier’s heart.

 

The Latest Buzz

“The word ‘wrong’ is really good,” says a senior BuzzFeed video producer.  “Started in 2006 as a lab for experimental web content, BuzzFeed has attracted an audience of 200 million monthly unique visitors, making it the sixth-largest site in the U.S. — bigger than eBay, Yahoo, and Wikipedia…It’s known for its viral hits — jokey lists about cute animals — and increasingly, its investments into journalism.  But now, like its digital pers, BuzzFeed has aggressively expanded into video…Ideas for new ‘wrong’ videos get thrown around: Snacks you’re eating wrong.  Maybe you’re running wrong, or putting your pants on wrong…When Frank asks his team what they’re working on, they rarely tell him the individual piece they’re shooting, but rather the problem they’re trying to solve.”  Meanwhile, Twitter’s live-streaming app Periscope has taken pay-per-view piracy to a whole nother level: “Soon, viewers started to notice a trend.  If a Periscope session [got] too many ‘hearts (Periscope lingo for favorites), a stream would get shut down…This wasn’t really a problem, however, because like a hydra, we could just go to another Periscope stream somewhere else in the world to watch the fight on someone else’s TV.”

 

Global: Moody’s Has Become So Senile

 

USA: “No One Is Spared Their Side-Eyed Looks”

 

USA: The Bernanke Cat Fights Of 2015: John Taylor’s Contribution

 

What: Turns Out Goldman’s Coal Mines Weren’t A Passion Project

zeppelin logo

Confusion Trending

The Wall Street Journal proclaims that “the trades that had proven winners in recent months backfired [in April] (alt)…The euro strengthened 4.5% against the dollar in April after tumbling 11% in the first quarter.  The U.S. benchmark crude-oil price soared 25% after declining 11% in the first three months of the year.  The Nasdaq Biotechnology Index fell 2.8% in April after jumping 13% in the first quarter.  Yields on German government bonds bounced higher after nearing zero last week.”  Furthermore, “the turnaround month ended with an exclamation point,” read: selloff in “suddenly vulnerable technology stocks.”  Twitter, Yelp and LinkedIn are the culprits.  “It is spring cleaning,” says one.  “It’s a short-term unwind,” says another.  “I’m convinced medium-term trends will re-establish themselves.”  Nice.  As you can probably tell, everyone is a bit “um, what?” about recent economic data.  ICYMI, 1Q GDP came in at 0.2%, and people were all like “probably not a true reflection of the economy’s health, given the role of temporary factors such as the weather and the ports dispute.”  Then, the impossible happened:  “private sector pay rose 2.8 per cent in the first quarter (alt)…the quickest upward pace since 2008;” “personal spending rose 0.4% in March from February (alt)…the biggest gain since August;” “new claims for jobless benefits tumbled to a 15-year low” etc.  “This is precisely why we told you to ignore the weak first-quarter GDP data produced yesterday.  It’s old news.  And the economy is showing”–cue Institute for Supply Management: “the pace of U.S. manufacturing growth held at its slowest in almost two years in April, as a rebound in new orders was offset by employment shrinking to its lowest level in more than five years.”  Also, “U.S. construction spending fell in March to a six-month low…Economists polled by Reuters had expected construction spending to rise 0.5 percent.”  Of course, the best head-scratcher of all is still with us: “consumer confidence increased in April to the second-highest level in more than eight years as Americans grew more upbeat about their financial prospects.”  Meanwhile, 10 year Treasury prices have fallen nearly 8% since Wednesday.

 

China: Chinese Equities Are A Stairway To Heaven (Alt)

Orientalism aside, this is pretty suspect: “After jumping by the maximum-allowed 44 per cent from the offer price when it floated in Shenzhen just a month ago, the stock has risen by the daily maximum of 10 per cent every day since…Every one of the 29 IPOs in Shanghai and Shenzhen this month have risen by the daily limit each day since.  The worst performing IPO from earlier in the year has doubled in price.”

 

USA: P2P Derivatives

“LendingClub chief executive officer Renaud Laplanche said he’s aware of the interest to bet against the market.  Derivatives that give investors the ability to protect against losses on the loans the company arranges is just smart risk-management, he said.”

 

Musk: “The Goal Is Complete Transformation Of The Entire Energy Infrastructure Of The World”

 

What: Eyeglass Retailer Gets $1.2 Billion Valuation With No Profits

 

WaitWhat: Guy Thinks VCs Are Gonna Need A Dark Pool

oliver twistEat Up

“The performance of the US stock market is quite impressive considering that there isn’t much of a spring in the latest batch of economic indicators.  The winter’s ice patch is looking more and more like the spring’s soft patch.”  “It is one of the market’s paradoxes that soft economic growth can be a fine climate for stocks.  As long as the economy is advancing, corporations can increase sales and profits.  But in a soft advance, interest rates stay low, keeping costs down.  The uncertain economy keeps Federal Reserve monetary policy easy, one of the main bulwarks of a bull market…Severe bear markets usually occur when the Fed is raising interest rates sharply to cool off inflation…low inflation and low rates increase the present value of future corporate earnings.”  Meanwhile, the Wall Street Journal says “core inflation readings would be even weaker but for the pace of gains in the BEA’s measure of housing costs, which counts toward about one-fifth of its core price index.  This was up 2.9% from a year earlier in February.  Absent that, core inflation would have been running at just 1%.  Housing counts for an even bigger chunk of the Labor Department’s consumer-price index, which is a big reason why its core measure has been running ahead of the BEA’s…The rental vacancy rate fell to 7% in the fourth quarter from 8.2% a year earlier…the lowest level since 1993.”  Meanwhile, “Japanese life insurers — some of the world’s largest institutional investors — plan to keep pouring money into U.S. debt this year as the list of countries able to meet their thirst for yield shrinks…Even though the roughly 2% current yield on 10-year U.S. Treasurys is a far cry from yields of 5% or better before the global financial crisis, it is still light-years better than the current 0.16% yield for German bunds with the same maturity or the 0.29% yield for 10-year Japanese government bonds…’Considering current yield levels, liquidity, hedging of currency exposure, the U.S. is likely the primary destination.’”  So inflation and rates are low, which means there’s a lot of “stocks are expensive, BUT” going on at the moment: “stocks are expensive but while rates stay low, and earnings avoid a serious collapse, money flows into them.  A strong catalyst — really bad earnings, a bad geopolitical event, or a surprise from the Fed — is needed before the market can jolt out of its steady ascent.”  Speaking of surprises, the “Make my day, Janet Yellen” crowd is eating their last free lunch: “what the market never worried about was whether the statement would include the most dreaded news: a rate hike, and because of that, every meeting was something of a free lunch for the market.  That is the case this week, too.  The Fed’s signals have been very clear: there won’t be a rate hike at the April meeting.  However, this is the last meeting at which that certainly presides.  After this, higher rates are firmly on the table.”

 

China

“There are two main routes through which the slowdown could develop into something much worse…investment could slow sharply…[and] there could be a rise in household savings in response to concerns about falling household wealth, which is what happened during the US housing crash.  Given the bubble-like surge in equity prices, this may seem improbable, but it would become more likely if the equity surge ends in a crash.  The second route, also reminiscent of events in the US in the last decade, would be a financial crash led by stressed loans to the real estate or manufacturing sectors.”  Meanwhile, “Chinese companies are increasingly tapping the equity market for funds to pay down liabilities and invest in growth.  They’ve announced $82 billion of secondary stock offerings in 2015, a figure UBS Group AG predicts will increase to a record $161 billion by December.”  Also, “authorities have pledged to move toward a so-called ‘registration system’ where markets, rather than regulators, determine most aspects of an offering, including pricing and timing.”

 

WM: Consensus Expectations

Also, Why International Diversification Matters.

 

Greece: He Who Shall Not Be Named Shall Not Be In Negotiations

 

What: Socialist Muslim Slash Deflationary Force

The-death-of-equitiies-Business-Week-cover-1979

Stories, Markets, Luck And You

“China’s central bank reduced the amount of reserves commercial banks are required to hold, freeing up about $200 billion for lending in the latest easing measure.”  The “larger-than usual reduction…is the second cut in banks’ reserve requirement in less than three months and comes after the economy decelerated to 7%…’The question is whether the PBOC is a little slow on easing.  They’re fighting the last battle, like generals do.’”  Speaking of generals, “perhaps Mr. Tsipris will step back from the brink, ditch his party’s hard-line left-wing and recast his coalition with moderate pro-Europeans willing to back reforms, thereby securing a last-gasp deal to avert disaster…The more likely scenario is that Greece defaults.”  “News from Greece and China disrupted U.S. markets on Friday, but the deeper problem was closer to home.  First-quarter U.S. corporate revenue, now beginning to be reported, is coming in even lower than analysts’ sharply reduced forecasts had indicated…’It is making investors cautious, maybe a little bit confused.’”  Meanwhile, “we like stories, we like to summarize, and we like to simplify, i.e., to reduce the dimension of matters…the [narrative fallacy] is associated with our vulnerability to overinterpretation and our predilection for compact stories over raw truths.”  Also, “the biggest threat to your portfolio is you.  China is not threatening your portfolio, nor is the price of oil or the level of the Fed Funds rate.  What’s threatening your portfolio is the way in which you may react to any of these items, plain and simple…No one will see the thing coming that derails the economy or the market next time around.  It certainly won’t be something that’s on the front page of the newspaper like Greece or interest rates…If we cannot even identify the reason for why a market tops or crashes on a given day with the benefit of looking back, what makes any of us think we can do so in real-time or in advance?  More importantly, doesn’t it make more sense to recognize the durability of the capital markets in the face of all these threats rather than try to play hopscotch with our retirement assets each time a new one arises?”  “In the financial markets, where so many investors are highly skilled (…), their actions cancel each other out as they quickly bid up the prices of any bargains — paradoxically making luck the main factor that distinguishes one investor from another.  And a streak of being right can make anyone forget how important luck is in determining the outcome…Guarding against the illusion of control takes constant vigilance.  The longer you’ve been right, the harder it gets.”

 

USA: Dr. Ed Lays Out The Evidence For Wage Pressure

 

USA: Deutsche Bank Says Defaults Are Very Low Compared To Historical Standards

 

China: $46 Billion Rail/Road To Wealthy Consumers In Europe

 

USA: Financial Situation “Getting Better” For Over Half Of Americans Surveyed By Gallup

Meanwhile, half are in, half are out, and half of those “because they simply don’t have the money.”

 

What: Jon Corzine Is “Gratified That Others Might Want To Invest With Him”

help me obi wan kenobi leia

Help Me Emerging Markets; You’re My Only Hope

The weakness in retail sales from December through February didn’t jibe with the strength in employment and consumer confidence.  Another surprise was that the windfall from falling gasoline prices didn’t show up in better spending in other retail categories.  Then March employment data turned weak, and the month’s 1.0% gain in retail sales excluding gasoline (to a new record high) wasn’t much of a spring rebound following the 0.8% decline from December through February.  Even worse, on an inflation-adjusted basis, core retail sales (excluding autos, gasoline, and building materials) fell 1.3% saar during Q1.”  “Saving, not shopping, is the hallmark of this expansion…Recent consumer data suggest households remain very focused on building a financial cushion to guard against the next crisis.  To do that, they are being very cautious about their purchases…For global producers who have long depended on the American consumer…the frugality means a re-think about strategy.  Emerging middle classes in developing economies may be the best hope for consumer-related manufacturers.”  Meanwhile, a Bloomberg poll of money managers reveals some high optimism for Nigeria, Vietnam, Argentina and Saudi Arabia.  “According to the United Nations, Nigeria has the potential to become the third most populous country in the world by 2050 and also boasts the highest percentage of people under the age of 15 today…growth could eventually rival China’s.”  Meanwhile, the IMF would like you to know about the “super taper tantrum”: “higher US interest rates could expose particular vulnerabilities in emerging markets where companies have issued large amounts of debt in dollars, the IMF said, adding that between 2007 and 2014 debt had grown faster than GDP in all major emerging markets.”  Meanwhile, Research Affiliates concur with Janet Yellen’s “gradual and lower than you expect” forecast for interest rates: “Looking toward retirement and still needing to repair their balance sheets in the aftermath of the housing recession, Main Street Americans are reluctant to borrow at any price.  To reach significantly higher real interest rates, we need not only more optimistic GDP forecasts but rectified balance sheets and greater willingness to spend rather than save and invest…The demand just isn’t there.  After seven years of trying to bring the punchbowl back to the party, the Fed may be realizing that this time nobody seems interested in drinking off the hangover.  Don’t expect the party to ramp up anytime soon.”  Meanwhile, the party got turnt up in Europe this morning!

 

Fear Leads To Anger

“According to Bank of America Merrill Lynch’s monthly Fund Manager Survey, 13% of global investors believe equity bubbles are the biggest risks facing stocks.  That number is up from just 2% in February.  Among the panel surveyed, 25% believe global stocks are overvalued and 68% think the U.S. is the most expensive region.”  Meanwhile, “your appetite for risk will likely ebb and flow with the markets even if your ability to take risk based on your financial situation hasn’t changed much.”  Also, “the more confident investors are in a risk model’s saving power the more useless they become…The best a risk model can do for the investor is point out where potential areas of risk exist, not how that risk will manifest and play out.”

 

Global: The Question Is No Longer If, But When The World Will Transition To Cleaner Energy

 

Fed: The Mythic Quest For Early Warnings


Tech:
We Made 8 Trillion Transistors Every Second Last Year

children bucket stream

Some People Are Uncomfortable With Living In The Moment Data Dependency

“Yellen took the April meeting off the table for the first rate increase, but insisted that a June liftoff was a very real possibility, and that no June liftoff was also a very real possibility.”  Meanwhile, “twelve of 16 U.S. primary dealers that do business directly with the Fed said on Wednesday they see a rate liftoff in September or later. Just four of those responding to a Reuters poll stuck with June as their forecast…‘It was primarily the downward shift in their outlook on growth and inflation’…Policy makers lowered their median view of U.S. growth for 2015 to 2.3 to 2.7 percent, from an outlook in December of 2.6 to 3.0 percent, while reducing their outlook on core inflation for this year to 1.3 to 1.4 percent, from 1.5 to 1.8 percent three months earlier.”  Meanwhile, David Merkel plots FOMC members’ projections for inflation, fed funds and GDP over time, and expects “the FOMC to continue to err on the side of monetary lenience.”  “Yellen’s response to a question about standard formulas or mechanical rules for monetary policy illustrated that her responses were not intended to be evasive, but rather to emphasize the complexity and uncertainty inherent in the economy, and that simple rules, while useful for thinking about how the theoretical economy functions in the long run, are impractical for conducting monetary policy in the real economy in real time.”  Also, “you cannot understand life and its mysteries as long as you try to grasp it.  Indeed, you cannot grasp it, just as you cannot walk off with a river in a bucket.  If you try to capture running water in a bucket, it is clear that you do not understand it and that you will always be disappointed, for in the bucket the water does not run.”  Meanwhile, it’s Markets 1 Fed 0 you guys.

 

JPN: “When Japan Post Goes Public, People Who Are Not Interested In Equity Markets Will Become Interested In Them”

 

What: “A 3D View Of A Chart That Predicts The Future”

Related: Multi-Informational, Trans-Dimensional Finance Cube

largest restaurant and retail employers in US

Juggernauts

A modest bidding war has broken out among the retailers who hire from the bottom of the labor pool, buoyed in part by improving sales…Turnover in the retail sector has been steadily rising and now stands at 5 percent a month.  At this rate, if Walmart’s workforce were to hold to the national average, over a full year it would be losing 60 percent of its sales staff.”  Meanwhile, “employers added 295,000 jobs in [February] (alt), up from an average gain of 266,000 over the previous 12 months and comfortably above Wall Street expectations…The rate of unemployment fell from 5.7 per cent to 5.5 per cent…Pay growth was muted, however, with average hourly earnings rising by 3 cents, leaving earnings up 2 per cent on the year…The [participation rate] was little changed at 62.8 per cent.”  The dollar is trading higher on the news; EUR/USD exchange rate is now 1.08.  Meanwhile, “since December, 22 major foreign currencies have declined an average of 4.5 percent against the [$US].  A cheaper currency makes exports less expensive and thus more attractive to foreign buyers.  A devalued currency also drives up import prices, which discourage domestic consumers from purchasing foreign goods…Call it currency manipulation or domestic economic policy…almost every country in the world want their money to be cheaper.”  Keyword: almost.  “The renminbi has weakened against the dollar by about 4 per cent since October, a meaningful change in a semi-fixed exchange rate regime…This has been driven mainly by a reversal in private sector capital flows, which have traditionally been in large surplus but are now in deficit…The capital outflow has also tightened the domestic money markets, a very unwelcome development for the People’s Bank of China given the powerful contractionary forces that have taken hold in the domestic economy…Although the renminbi has fallen against the dollar, the semi-fixed band has resulted in China’s overall effective exchange rate rising by 11 per cent since early 2014…China is finding it increasingly difficult to remain tied to the dollar bloc at a time when the US Federal Reserve is tightening monetary policy and the dollar is rising…Other countries may complain about ‘currency wars’, but a gradual renminbi adjustment would be far safer for the world economy than a failed attempt to maintain a fixed rate that has outlived its usefulness.”  Meanwhile, here are some insane statistics about China: 1) There are more internet users in China than there are people in the United States and Europe combined, 2) Chinese construction firms broke ground last year on enough homes for the entire population of Australia, 3) They also built or at least worked on 143k miles of road, which is longer than five times the circumference of the earth.

 

USA: Grain Of Salt

Despite the positive jobs report this morning, there have actually been quite a few negative economic data points from the United States recently.  

 

WM: Funds Indexed To The Dow Are Gonna Have To Buy Apple And Sell AT&T

 

EU: Being A Tourist In Greece Is About To Get Real Awkward (Alt)

 

USA: Researchers Say 1 In 8 Spinoffs Preceded By Suspicious Trading In Options Markets

 

WM: JPMorgan Is Super Good At Returns