High income consumers, who generate a disproportionate share of spending, registered large declines in both their current personal finances as well as buying conditions for durables.
Bottom-line: 미시간대 소비지수에서 인플레이션 항목이 예상치를 상회하며 주가는 상승이 멈춤.
The S&P 500 held gains, but retreated a bit, after preliminary August UMich consumer sentiment beat estimates, while 5-to-10 year inflation expectations were higher than anticipated.
The S&P 500 held gains, but retreated a bit, after preliminary August UMich consumer sentiment beat estimates, while 5-to-10 year inflation expectations were higher than anticipated.
Bottom-line: 이번 지표는 중앙은행이 인플레이션에 대해 안심할 수 없는 이유를 제공했으며, 9월 75bp 인상에 대한 가능성을 다시 제공함.
Whoops. So much for lower gas prices taking inflation expectations lower. The UMich 5-10 year median inflation expectation unexpectedly rose back to 3%, close to the cyclical high. The less-watched 5-10 year mean expectation, meanwhile, rose from 3.4% to 4.0% -- back to its peak. Despite this, confidence improved to 55.1, which was the result of a rise in expectations from 47.3 to 54.9. The indicator on “bad time to buy large durables because of high prices” actually rose to a new peak of 50. This is not a report that will comfort the Fed, and while it won’t swing the balance of risk for September to 75 bps, it does suggest that declaring victory over inflation is decidedly premature.
Whoops. So much for lower gas prices taking inflation expectations lower. The UMich 5-10 year median inflation expectation unexpectedly rose back to 3%, close to the cyclical high. The less-watched 5-10 year mean expectation, meanwhile, rose from 3.4% to 4.0% -- back to its peak. Despite this, confidence improved to 55.1, which was the result of a rise in expectations from 47.3 to 54.9. The indicator on “bad time to buy large durables because of high prices” actually rose to a new peak of 50. This is not a report that will comfort the Fed, and while it won’t swing the balance of risk for September to 75 bps, it does suggest that declaring victory over inflation is decidedly premature.
Chinese officials are making plans for President Xi Jinping to visit Southeast Asia and meet face-to-face with President Biden in November, Dow Jones reports citing people familiar with the preparations.
Bottom-line: 12개월래 경기침체 확률이 50%까지 상승하면서 중앙은행의 금리인상 속도를 늦출 것으로 기대되며 주식시장에는 호재로 작용하고 있음.
Recession Odds Jump to 50% and That’ll Be Good for Stock. tocks can keep rising as the odds of a slowdown grow. The probability of a recession in the next 12 months jumped to 50% from 40%, according to economists surveyed by Bloomberg. This fits with the narrative that a slowing economy will temper the pace of the Fed rate hikes. The result, ironically, is that equities can still gain as the economic outlook deteriorates. At the rate things are going, the S&P 500 will soon be down just 10% for this year. Slowing growth will also help long bonds by contributing to slower inflation. The result is the inversion of the yield curve and the sliding term premium. The Fed’s Mary Daly reiterated that her base case is for a half-point hike at the meeting next month, following back-to-back 75-bp hikes in June and July, but said she has an “open mind” about another large increase being necessary. Swaps show traders are leaning toward 50 bps.
Recession Odds Jump to 50% and That’ll Be Good for Stock. tocks can keep rising as the odds of a slowdown grow. The probability of a recession in the next 12 months jumped to 50% from 40%, according to economists surveyed by Bloomberg. This fits with the narrative that a slowing economy will temper the pace of the Fed rate hikes. The result, ironically, is that equities can still gain as the economic outlook deteriorates. At the rate things are going, the S&P 500 will soon be down just 10% for this year. Slowing growth will also help long bonds by contributing to slower inflation. The result is the inversion of the yield curve and the sliding term premium. The Fed’s Mary Daly reiterated that her base case is for a half-point hike at the meeting next month, following back-to-back 75-bp hikes in June and July, but said she has an “open mind” about another large increase being necessary. Swaps show traders are leaning toward 50 bps.
Bottom-line: 파월이 그린스펀과 같은 실수를 하고 있다고 보는지에 대해 주택시장에 물어본다면 대답은 그렇다. 지나치게 오랜기간 낮은 금리를 유지해 주택시장에 거품을 만들었고, 실수를 만회하기 위해 그린스펀은 17번 연속 금리를 인상하며 시장을 붕괴시켰는데, 현재의 중앙은행 스타일은 그린스펀에 가깝다.
Is Powell’s Fed due to repeat the same mistakes as Greenspan’s? So far, for the housing market the answer may be yes. Greenspan kept rates too low for too long after the turn of the century. Famously, after a speech in which he encouraged home owners to take out variable rate mortgages, his Fed went on to raise the funds rate 17 times in a row. Since March of this year, the Fed has raised rates by the equivalent of nine Greenspan-style quarter-point hikes and may add as much as 75 bps next month. It is a widely held view that the Fed created the housing bubble by staying too low for too long and then abruptly cratered home prices when it hiked as many thought too aggressively afterward.
Is Powell’s Fed due to repeat the same mistakes as Greenspan’s? So far, for the housing market the answer may be yes. Greenspan kept rates too low for too long after the turn of the century. Famously, after a speech in which he encouraged home owners to take out variable rate mortgages, his Fed went on to raise the funds rate 17 times in a row. Since March of this year, the Fed has raised rates by the equivalent of nine Greenspan-style quarter-point hikes and may add as much as 75 bps next month. It is a widely held view that the Fed created the housing bubble by staying too low for too long and then abruptly cratered home prices when it hiked as many thought too aggressively afterward.
Bottom-line: 경기침체 위협에도 전년 동기 대비 +9% 성장을 한 미국과 달리 아시아 신흥국은 핵심적으로는 중국봉쇄, 그리고 반도체 산업 둔화, 대만 관련 갈등 등으로 -16% 역성장 한 것으로 예상됨. 전략가는 모든 불안요소들이 정상화 된 것이 없어 이익 사이클 전환이 요원해보인다 함.
Asian stocks just can’t catch a break. Fresh from being whipsawed by rising geopolitical tensions over Taiwan, they now face what’s forecast to be the worst earnings season since the start of the pandemic. Earnings per share for MSCI Asia Pacific Index members slid 16% in the three months through June from a year earlier, the steepest decline in eight quarters, according to analyst estimates compiled by Bloomberg Intelligence. That contrasts with a 9% gain seen for companies in the S&P 500 Index even as the US economy edges toward a recession. The prospect of dwindling profits adds to the negatives that have dragged the MSCI Asia Pacific Index down almost 16% this year, putting it on course for its worst annual performance since 2018. These include China’s lockdowns -- a key reason for the region’s poor earnings show, a slowdown in the semiconductor cycle, and the political furore over US House Speaker Nancy Pelosi’s trip to Taipei. “All the elements are not in place for a sustainable up-move,” said Rajat Agarwal, an Asia equity strategist at Societe Generale SA. Earnings have yet to enter a new cycle, geopolitical tensions will continue to be priced in, and financial conditions remain restrictive, he said.
Asian stocks just can’t catch a break. Fresh from being whipsawed by rising geopolitical tensions over Taiwan, they now face what’s forecast to be the worst earnings season since the start of the pandemic. Earnings per share for MSCI Asia Pacific Index members slid 16% in the three months through June from a year earlier, the steepest decline in eight quarters, according to analyst estimates compiled by Bloomberg Intelligence. That contrasts with a 9% gain seen for companies in the S&P 500 Index even as the US economy edges toward a recession. The prospect of dwindling profits adds to the negatives that have dragged the MSCI Asia Pacific Index down almost 16% this year, putting it on course for its worst annual performance since 2018. These include China’s lockdowns -- a key reason for the region’s poor earnings show, a slowdown in the semiconductor cycle, and the political furore over US House Speaker Nancy Pelosi’s trip to Taipei. “All the elements are not in place for a sustainable up-move,” said Rajat Agarwal, an Asia equity strategist at Societe Generale SA. Earnings have yet to enter a new cycle, geopolitical tensions will continue to be priced in, and financial conditions remain restrictive, he said.
Bottom-line: 고용지표가 75bp 금리인상 확률을 높였지만, 반대로 인플레이션 데이터로 인해 50bp 금리인상 확률에 다시 가까워지는 등 채권시장은 데이터에 기반한 조정을 지속하고 있음. 다음 주 소매판매가 인플레이션에 어떤 영향을 받았는지, 잭슨홀 미팅 등이 계속적으로 미세조정을 일으킬 것임.
Bond investors hoping for a summer lull have a problem: Next week could ratchet up market volatility at a time when wagers on the Federal Reserve’s next decision are near-evenly split. There’s a standoff resulting from conflicting US economic data: strength in hiring and wage growth on the one hand, and the first glimmer of moderation in inflation from generational highs on the other. As recently as Aug. 5, another three-quarter point rate increase was deemed likelier based on strong jobs data. This week, a smaller half-point move came back into favor after inflation decelerated. To avoid a potentially disorderly reaction to the Fed’s decision on Sept. 21, the market needs to reach a consensus -- and adjust pricing accordingly -- based on the latest economic data and comments by Fed officials. Next week, retail sales data may bring some clarity, revealing the extent to which ebbing inflation is helping consumers. The following week’s annual Fed confab in Jackson Hole, Wyoming, might also be decisive. “A month and a half to the September meeting is an eternity for the bond market,” said Gregory Faranello, head of US rates trading and strategy for AmeriVet Securities. The debate over 50 versus 75 basis points “will continue as the Fed is following the data,” and that will “predominantly play out in the front-end.”
Bond investors hoping for a summer lull have a problem: Next week could ratchet up market volatility at a time when wagers on the Federal Reserve’s next decision are near-evenly split. There’s a standoff resulting from conflicting US economic data: strength in hiring and wage growth on the one hand, and the first glimmer of moderation in inflation from generational highs on the other. As recently as Aug. 5, another three-quarter point rate increase was deemed likelier based on strong jobs data. This week, a smaller half-point move came back into favor after inflation decelerated. To avoid a potentially disorderly reaction to the Fed’s decision on Sept. 21, the market needs to reach a consensus -- and adjust pricing accordingly -- based on the latest economic data and comments by Fed officials. Next week, retail sales data may bring some clarity, revealing the extent to which ebbing inflation is helping consumers. The following week’s annual Fed confab in Jackson Hole, Wyoming, might also be decisive. “A month and a half to the September meeting is an eternity for the bond market,” said Gregory Faranello, head of US rates trading and strategy for AmeriVet Securities. The debate over 50 versus 75 basis points “will continue as the Fed is following the data,” and that will “predominantly play out in the front-end.”
Bottom-line: 중국의 소매판매, 투자, 산업생산 모두 부진하면서 주가지수가 하락 반전, 중국 지표 발표 전 부양책은 오히려 악화 된 데이터에 경계감을 심었을 뿐이며, 국채 수익률 또한 역전폭이 확대되며 미국 중앙은행의 금리인상이 침체로 몰아갈 것에 대한 우려 또한 심해지고 있음.
U.S. equity-index futures slipped, stocks posted tepid gains and commodities from oil to iron ore fell as disappointing data from China further clouded the outlook for the global economy. Contracts on both the S&P 500 and Nasdaq 100 were lower, suggesting a four-week stocks rally may stall. Europe’s equity benchmark advanced about 0.3%, as corporate news buoyed healthcare stocks while miners and carmakers declined. An Asian share index added 0.1%. Treasury yields ticked higher and the bond curve remained deeply inverted, pointing to worries that the Federal Reserve’s campaign of monetary tightening against high inflation will spark a US recession. The dollar gained. Data showed China’s July retail sales, investment and industrial output missed economists’ estimates. The central bank had earlier cut borrowing costs. China’s bond yields and the offshore yuan fell, while its bourses wavered.
U.S. equity-index futures slipped, stocks posted tepid gains and commodities from oil to iron ore fell as disappointing data from China further clouded the outlook for the global economy. Contracts on both the S&P 500 and Nasdaq 100 were lower, suggesting a four-week stocks rally may stall. Europe’s equity benchmark advanced about 0.3%, as corporate news buoyed healthcare stocks while miners and carmakers declined. An Asian share index added 0.1%. Treasury yields ticked higher and the bond curve remained deeply inverted, pointing to worries that the Federal Reserve’s campaign of monetary tightening against high inflation will spark a US recession. The dollar gained. Data showed China’s July retail sales, investment and industrial output missed economists’ estimates. The central bank had earlier cut borrowing costs. China’s bond yields and the offshore yuan fell, while its bourses wavered.
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Bottom-line: 월스트리트의 전략가들조차 현재 주식시장 랠리에 대해 의견이 나뉘는데, 약세론을 대표하는 모건스탠리는 기업 이익 성장 둔화와 높은 금리로 인해 다시 하락할 것, 제이피모건은 기술주 중심으로 연말까지 +20% 이상 랠리를 이어갈 것으로 예상함.
JPMorgan Says the Stock Rally Has Legs. Morgan Stanley Disagrees. Top Wall Street strategists are divided on whether the US stock market is poised to extend its longest winning streak of the year -- or slip back after another false dawn. Morgan Stanley strategists said in a note Monday that the sharp rally since June is just a pause in the bear market, predicting that share prices will slide in the second half of the year as profits weaken, interest rates keep rising and the economy slows. But rivals at JPMorgan Chase & Co. said the rally -- which has pushed up the tech-heavy Nasdaq 100 index by over 20% -- could run through the end of the year.
JPMorgan Says the Stock Rally Has Legs. Morgan Stanley Disagrees. Top Wall Street strategists are divided on whether the US stock market is poised to extend its longest winning streak of the year -- or slip back after another false dawn. Morgan Stanley strategists said in a note Monday that the sharp rally since June is just a pause in the bear market, predicting that share prices will slide in the second half of the year as profits weaken, interest rates keep rising and the economy slows. But rivals at JPMorgan Chase & Co. said the rally -- which has pushed up the tech-heavy Nasdaq 100 index by over 20% -- could run through the end of the year.