More From Ricky Cove
Could New Home Sales Continue to Rise?
The US Census Bureau and Department of Housing and Urban Development report monthly data on the number of new homes sold in the United States.
Why Existing Home Sales Have Been on a Continuous Slide
The United States National Association of Realtors (or NAR) releases a monthly report on the existing home sales (ITB) market.
What American Builders Were Worried about in June
The HMI was reported to have decreased by two points to 68 in June as compared to a May reading of 70.
Are Rising Rates Affecting Housing Markets?
Rising interest rates increase the cost of owning a home for prospective buyers, but the housing market hasn’t yet felt the impact of rate increases.
Why Did the Euro Appreciate against the US Dollar?
European equity markets didn’t have the same enthusiasm as the euro, as new tariff threats to the European car industry from the Trump administration unnerved investors.
What Bond Market Investors Are Watching for This Week
The US bond market continued to rebound as trade tensions and the limited appreciation in equity markets pushed demand for bonds higher, depressing the bond yields for a second consecutive week.
What to Make of the Increase in Consumer Expectations in May
The May LEI reported the average consumer expectations for business conditions of 0.83, a strong rebound from the revised April reading of 0.55.
How the Yield Spread Changed the Outlook for the Economy
In the May LEI report, the yield spread had a net impact of 0.14 (or 14.0%).
What to Make of the Rebound of the Credit Index in May
The Leading Credit Index expanded for the first time in four months in May with a reading of -0.86.
Did the S&P 500 Rebound Help the Leading Economic Index?
The S&P 500 Index (SPY) rebounded in May, thanks to a stellar earnings season and a de-escalation of trade tensions between the United States and China.
What Led to the Rebound of ISM New Orders Index in May?
The ISM New Order Index for May was 63.7, rebounding after four consecutive monthly declines, but still below the December peak of 67.4.
Manufacturing Workers’ Hours Slipped to 42.2 in May
The ISM manufacturing (VIS) index was close to the March high of 60.8 and was reported at 58.7 in June.
What Drove the Leading Economic Index Higher in May?
According to the June 21 Conference Board report, the May LEI was 109.5—a 0.2% increase from the revised April LEI of 109.3.
One Way China Could Twist Trump’s Arm
There is one economic measure at China’s dispense that could force the Trump administration to back away from its aggressive trade policy.
How China Could React to the US Tariff Increase
As the United States imported just $130 billion into China last year, it may be difficult for China to directly counter Donald Trump’s threat of imposing tariffs on $200 billion of US imports from China.
Does Donald Trump Think He Has the Upper Hand?
Donald Trump added fuel to the trade war fire by announcing that the United States would extend 10% tariffs to $200 billion of Chinese (GXC) imports.
Why the Yen Depreciated against the Dollar
Last week, the Japanese yen (JYN) succumbed to the US dollar’s strength. The Japanese yen (FXY) closed the week at 110.67.
US Dollar Is Dominating the Forex Markets
The US Dollar Index (UUP) managed a sharp recovery last week. The appreciation seemed to be due to tariff announcements.
Will Risk-Off Trade Push Bond Markets Higher?
The US bond market had a limited reaction to the Fed’s 25-basis-point rate hike and the 0.20% increase in interest paid on excess reserves.
How Capacity Utilization across US Industries Trended in May
The total industry capacity utilization in May has fallen from the upward revised April reading of 78.1 to 77.9 in May.
Why Industrial Production Figures Dipped in May
Industrial production in the United States fell 0.1% in May as compared to an increase of 0.9% in April.
Why There Could Be More Room for Inflation Growth
The PPI for final demand in May is reported to have increased by 0.5% month-over-month.
What Drove Retail Sales Higher in May?
The United States Census Bureau releases a monthly report on retail sales in the United States. Let’s take a look at the latest data.
Why Does the Fed Expect Unemployment to Fall Further?
The US Federal Reserve has a dual mandate of achieving maximum employment and stable prices (TIP) in the economy.
FOMC: We Are Not Declaring a Victory on Inflation
The FOMC’s June statement was released on June 13, and the outlook for inflation remained upbeat.
Why Did the US Federal Reserve Turn Hawkish at Its June Meeting?
As expected, the Federal Reserve increased the interest rate by 25 basis points after its June meeting, which concluded on June 13.
How Could High Inflation Affect the Fed?
During the Fed’s May meeting, the inflation (TIP) target was described as “symmetric,” suggesting that the 2% target would not be used to initiate any dramatic changes to US monetary policy.
Why May’s Inflation Was Just Hot Enough
On June 12, the US Bureau of Labor Statistics reported that US consumer prices rose 0.2% in May, adding to the 0.2% increase seen in April.
Why This Week Could Define the Direction of Monetary Policy
The central banks of the US, EU, and Japan are scheduled to meet this week.
Will Bond Market Investors Benefit from Risk-Off Trade?
The US bond market seems to be benefiting from multiple crises around the world.
What Now as the US Fed Is Close to Meeting Its Targets?
As of June 1, the unemployment rate in the US has dropped to 3.8%—its lowest level in the last 18 years.
April Jobs Report: More Jobs Than Job Seekers
April’s JOLTS data indicate that there were only 0.9 job seekers for every job available.
A Sign That the Jobs Market Could Tighten More
According to the April JOLTS report, there were 6.7 million job openings at the end of April compared to 6.6 million in March.
Mexico Is Hitting Republicans in Their Weak Spot
Mexico hit the American economy where it hurts the most with tariffs on American products like pork, steel, apples, potatoes, cheese, and bourbon.
Treasury Yields and Trade War Fears Driving USD-JPY Price Action
The Japanese yen returned to weakness against the US dollar as political uncertainty in the euro area fell at the end of the week that ended on June 1.
What’s the Link between Italian Policy and the Euro?
The euro-dollar (FXE) exchange rate managed to move back above 1.16 against the US dollar (UUP).
Strong Jobs Report Had a Limited Impact on the Bond Market
The US bond market was volatile in May. The ten-year yield reached a peak of 3.1% and fell to a low of 2.8% in a span of three weeks.
This Economic Data Point Decreased the Odds of a 4th Rate Hike
In the current economic climate, we can expect the Fed to take a step back with respect to interest rate hikes.
Are Tax Cuts Helping US Consumers Spend More?
On May 31, the BEA’s report on personal income and spending for April indicated that personal income rose 0.3%.
Which Sector Posted the Most Job Gains in May?
As per the May ADP employment report, job growth in the professional and business services sector continued to be the key driver for jobs additions.
ADP: May Payrolls Could Be below 180,000
According to the ADP National Employment Report, the US private sector added 178,000 jobs in May.
Why May Consumer Confidence Signals a Strong Second Quarter
The consumer confidence index has increased to 128.0 in May as compared to a downward revised April reading of 125.6.
Will the Rollback of Dodd-Frank Help the Real Estate Sector?
In a continued effort to deregulate the economy, President Donald Trump signed the Economic Growth, Regulatory Relief, and Consumer Protection Act.
Why REIT Valuations Look Attractive as the Market Hits the Roof
In the recently concluded first quarter, more than 95% of REITs reported earnings beats and maintained their guidances for 2018.
Why the Recent REIT Rebound Could Stretch a Little Further
The real estate sector (VNQ) has been lagging in performance in 2018. It’s seen a year-to-date loss of 6%.
Tax Rules: Are Changes Helping Durable Goods Orders?
The durable goods orders in April were below the market expectations. The durable goods orders decreased by $4.2 billion or 1.7% to $248.5 billion.
Macro Events That Could Influence Markets This Week
The last three trading sessions in May are likely to be influenced by geopolitical issues rather than economic data.
Are Bond Yields Taking a Breather?
The US bond market had some relief from its ongoing slide as the Fed’s May meeting minutes were less hawkish than expected.
How Political Uncertainty Could Drive Markets This Week
Global markets mostly fell last week (ended May 25) as political uncertainty kept investors at bay.
Will Safe-Haven Demand Push the Japanese Yen Higher?
Last week, the Japanese yen (JYN) managed its first weekly gain against the US dollar in nine weeks.
What’s Driving the British Pound Lower against the US Dollar?
The British pound (FXB) depreciated against the US dollar (UUP) for the fifth week in the last six weeks.
Why Italian Election Uncertainty Drove EUR-USD Lower
Last week, the euro-dollar (FXE) exchange rate moved below 1.16 for the first time in six months.
What’s Driving the US Dollar Higher?
The US Dollar Index (UUP) continued to appreciate but did so slowly in the week that ended on May 25.
Why the Fall in April New Home Sales Isn’t a Reason to Worry
As per the recent report, new single-family homes (XHB) sold in April were at a seasonally adjusted rate of 662,000 units.
Why Existing Home Sales Continued Their Decline in April
The US National Association of Realtors (or NAR) releases a monthly report on the existing home sales (ITB) market.
Should Housing Investors Worry about Declining Building Permits?
An increase in the number of building permits in any given month is a signal for increased activity in the housing sector (DHI) in the future.
Why American Builders Remain Confident about the Housing Industry
The housing market index was reported to have increased by two points to 70 in May compared to the downwardly revised April reading of 68.
Why the FOMC Isn’t Confident about Sustained Inflation Growth
The FOMC’s May meeting minutes indicated that some of its members had turned bearish on inflation (TIP).
Key Takeaways from May’s FOMC Meeting Minutes
The most recent FOMC meeting was on May 1–2. At the meeting, the range for the federal funds target rate was left unchanged.
How the US-China Trade Deal Could Hurt Global Markets
China invests the trade surplus it has with its trading partners in US government securities (GOVT).
Can China Reduce Its Trade Deficit with the US?
In discussing the steps that China has agreed to take to help reduce its trade deficit with the United States, Steve Mnuchin said there was “a very good framework agreement.”
Why Fed Minutes Could Put Further Pressure on the Yen
Last week, the Japanese yen depreciated against the US dollar for the eighth consecutive week as the dollar continued its upward surge.
Can the US Dollar Continue to Surge Higher?
Last week, the US dollar index bounced back from a minor pullback in the week ended May 11, aided by the rise of bond yields.
What to Make of the Decline of Consumer Expectations in April
The Conference Board Leading Economic Index (or LEI) has ten constituent indicators and all but one of these forward-looking indicators is based on expectations.
Will Yield Spreads Continue to Decline?
The US bond markets remained under selling pressure as bond yields, especially at the short end of the curve, continued to shoot up, while the long-term yields remained subdued.
Should We Worry about the Contracting Credit Index?
The Conference Board uses credit conditions in the economy as one of the components of the leading economic index (or LEI) economic model.
Consecutive S&P 500 Declines Have Hurt Leading Economic Index
The S&P 500 Index (SPY) continued its negative run with another lower close in April.
The Housing Industry Is Painting a Positive Outlook for the Economy
In April, the number of building permits issued was reported at 1.35 million, a decrease of 1.8% from the downward revised March reading of 1.37 million permits.
Are New Tax Rules Helping Capex Spending by Industries?
As per the latest Conference Board LEI report, the core capital goods orders for April were valued at $39.1 billion as compared to the downward revised March reading of $39.0 billion.
What Led to the Decline of the ISM New Orders Index in April?
The ISM New Order Index for April was reported at 61.2, which represented the fourth consecutive monthly decline for the index.
Falling Weekly Claims Signal Overheating Job Market
The Conference Board uses average weekly unemployment claims as a constituent of its Leading Economic Index (or LEI).
Why Drove the Leading Economic Index Higher in April?
The latest Conference Board LEI reading was released on May 17. The LEI for April came in at 109.4, an increase of 0.4% from the March reading of 109.0.
Why Bond Yields Could Increase This Week
US ten-year bond market yields have scaled a new seven-year peak at 3.07, their highest level since July 2011.
Why Volatility Could Rise Quickly This Week
All major US indexes had a negative close in the week that ended on May 18. The S&P 500 Index (SPY) fell 0.23%.
Trends in Capacity Utilization across US Industries in April
According to the Fed’s industrial production and capacity utilization report, capacity utilization increased from 77.6% in March to 78% in April.
Global Fund Managers Think These Trades Are the ‘Most Crowded’
The frequency of an asset class making financial headlines is indicative of investor interest.
Why Bond Yields Rose on Tuesday
The April retail sales report was released on May 15, and the surprise reaction to this report was an increase in bond (BND) yields across the board.
What Drove Retail Sales Higher in April?
The April retail sales report indicated that the gains were broad-based with nine of the 13 major categories moving higher during the month.
Could There Be Respite for the Falling Yen?
Last week, the Japanese yen (JYN) depreciated against the US dollar for a seventh consecutive week, despite US dollar weakness.
Could It Be Time to Sell the British Pound?
The British pound (FXB) was unchanged against the US dollar (UUP) last week despite the dollar’s rally stalling, possibly due to the BOE’s (Bank of England) move to leave policy rates unchanged.
Why Disappointing Data Has Had Limited Impact on the Euro
The euro-dollar (FXE) exchange rate closed at 1.2 on May 11, with the euro depreciating by 0.13% against the US dollar (UUP).
What Drove the US Dollar Lower Last Week
The US dollar index (UUP) took a breather last week, closing at 92.44, 0.03% higher than its close of 92.41 in the week ended May 4.
Could the US Dollar Slump Be Short Lived?
The US dollar depreciated against its major trading-partner currencies after the Bureau of Labor Statistics reported on May 10 that US consumer prices grew 0.1% in April after falling 0.1% in March.
Bond Yields Fall after April Inflation Data Release
US bond market investors were relieved after the US Bureau of Labor Statistics’ April report, published May 10, indicated a lower-than-expected inflation growth rate.
Why Equity Markets Rose after April’s Inflation Report
US indexes (SPY) are reaching highs as investors ignore possible threats of the US pull-out from the Iran nuclear deal and focus on increasing crude prices.
How April’s Inflation Data Relieved Markets
On May 10, the Bureau of Labor Statistics reported that US consumer prices rose 0.2% in April.
Why Last Week’s Events Made the Bond Markets Interesting
US bond market yields continue to trend higher, but their overall movement last week was limited.
Speculator Positions on the S&P 500 for the Week Ended May 11
For the week that ended May 11, the S&P 500 Index closed at 2,727.72, rising 2.4% compared to its previous week’s close of 2,663.42.
Why Oil Price Spike Is Helping Stock Prices Rebound
Global markets (ACWI) seem to be ignoring the Iran deal exit for now despite the possibility of risk escalation in the Middle East.
Analyzing the Possible Impacts of the Iran Deal Exit
President Trump’s decision to withdraw from the Joint Comprehensive Plan of Action (or JCPOA) could lead to regional conflicts in the Middle East.
What Are the Implications of Iran Nuclear Deal Exit?
In this series, we’ll analyze how the US exit from the Iran deal has affected markets and how recent developments could affect oil prices and volatility.
Will the Japanese Yen Continue to Depreciate against the US Dollar?
Last week, the Japanese yen (JYN) depreciated against the US dollar for a sixth consecutive week as the US dollar continued to rally.
Could the Bank of England Postpone Hiking Rates?
The British pound (FXB) depreciated 1.8% against the US dollar (UUP) in April, and has depreciated 1.9% so far in May.
Why the Euro’s Gap with the US Dollar Is Widening
The euro-US dollar (FXE) exchange rate closed at 1.19 on May 7, with the euro depreciating 1.4% against the dollar (UUP) in May following a 2.0% decline in April.
Dollar Bears Under Pressure as Short Squeeze Continues
In April, the US dollar index posted one of its best monthly gains (2.0%) since November 2016, and it looks set to continue with the trend this month.
Why the Fed Expects the Unemployment Rate to Fall below 4%
The FOMC expects US labor market conditions to remain strong.
Is the US Economy on Track to Meet the 2018 GDP Projections?
In its most recent SEP release, the Fed upgraded its GDP growth outlook for 2018 by 0.2% to 2.7%, compared to the 2.5% growth outlook in December 2017.
Disappointing April Jobs Report: Lower June Rate Hike Odds?
For the week ending May 4, the ten-year (IEF) yield closed at 3% and depreciated by 0.8 basis points. The two-year yield (SHY) closed at 2.50%.
It’s Surprising that President Trump Isn’t Tweeting about This
The US goods and services deficit was at $49.0 billion in March, a decrease of $8.8 billion from $57.7 billion in February.
Could there be a 4th Rate Hike in the Cards?
The Bureau of Economic Analysis defines PCE (personal consumption expenditure) as the value of goods and services purchased by, or on behalf of, US residents.