Edge and Odds

The enemy of knowledge is not ignorance, it’s the illusion of knowledge (Stephen Hawking)

It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so (Mark Twain)

Edge and Odds

Invest with smart knowledge and objective odds

China Inflation

THE DAILY EDGE (19 May 2017)

Very light deck today. Did you miss:

Conference Board Leading Economic Index: Growth in April, All-Time High

The Conference Board LEI for the U.S. increased again in April, fueled by positive contributions from all its components except for building permits and stock prices. In the six-month period ending April 2017, the leading economic index increased 2.4 percent (about a 4.9 percent annual rate), well above the growth of 0.7 percent (about a 1.5 percent annual rate) during the previous six months. Also, the strengths among the leading indicators have remained widespread. [Full notes in PDF]

No sign of recession:

Smoothed LEI
US consumer goods makers lose momentum amid slower retail sales growth

US producers of consumer goods reported the weakest rise in new orders for a year in April, representing a relatively poor start to the second quarter compared to the strong growth seen earlier in the year. New orders growth has now slowed for three successive months, corresponding with a similar waning in the retail sales trend.

IHS Markit’s PMI New Orders Index for US consumer goods manufacturers fell to 53.4 in April, down from 55.7 in March and a recent peak of 59.5 in January. Although still above the no change level of 50, the drop in the index in recent months signals markedly weaker inflows of new orders for consumer goods, which are commonly orders placed by retailers and wholesalers. As such, the index hints at a tentative softening in growth of demand from households.

The consumer goods PMI is a key indicator to watch as it has historically exhibited a close correlation with the three-month trend in retail sales growth, generally tracking turning points ahead of the release of official data. (…)

This chart from Meridian Macro Research is not economy bullish, is it?

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OPEC Delivers Oil Cuts. Others Not So Much

(…) Collectively, 21 nations are trying to curb output by almost 1.8 million barrels a day, with most of them using October’s production levels as their starting point. Last month, 10 of those countries met their targets, compared to nine in March, revised data show. But the big players matter most. Only five of nations producing more than a million barrels a day in April cut output as agreed, according to Bloomberg calculations. (…)

Russia, which accounts for half of the non-OPEC production cuts, has said it would gradually implement them and claimed to reach its target at the end of April. It didn’t do so for the full month. Non-OPEC compliance with crude oil cuts rose to 69 percent in April, according to Bloomberg estimates. It was at 66 percent when considering total liquids production, preliminary International Energy Agency data show. (…)

CHINESE INFLATION

Source: Danske Bank, @joshdigga (via The Daily Shot)

POLITICS!
Brazil’s Assets Dive as Political Crisis Engulfs President Temer
CETERIS NON PARIBUS
SELL IN MAY?

From Nautilus Investment Research:

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THE DAILY EDGE (9 March 2017)

Warm Weather May Bump NFP Print to Big League, Top Forecasters Say

Nonfarm payrolls will beat the 200,000 Bloomberg consensus estimate for February, according to leading forecasters of this data. Claims for unemployment insurance have hovered near almost 44-year lows, and economists, including top-rated jobs forecaster Jim O’Sullivan of High Frequency Economics, note that a warmer temperatures last month should boost outdoor jobs. (Bloomberg Briefs)

U.S. Productivity Rose at 1.3% Rate in 4th Quarter The productivity of U.S. workers increased last year at the slowest pace since 2011, a sign the economy continues to be plagued by long-term ailments despite recent momentum.

Productivity, or how many goods and services U.S. workers produced per hour, grew 0.2% last year compared with the prior year, the Labor Department said Wednesday. It expanded 0.9% in 2015 and 0.8% in 2014. (…)

The report also showed that unit labor costs—a measure of wages and benefits for American workers—grew at a 1.7% rate in the fourth quarter compared with the prior three months. (Table from Haver Analytics)

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Manhattan Rents Decline for Apartments of Every Size

Rents fell last month for Manhattan apartments of all sizes, the first across-the-board price decline in at least four years, as a construction boom brought more buildings to market and allowed some tenants to leave for bigger or newer units.

For studios, which held their own last year while costs for bigger apartments slid, the median rent dropped 2.6 percent, appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate said in a report Thursday. (…)

Apartments available for rent at the end of February numbered 6,872, a jump of almost 12 percent from a year earlier. The number of new leases fell 28 percent last month to 3,634. (…)

China Inflation Heads Off in Two Directions China’s consumer-price index in February was up just 0.8% from a year earlier, slowing from January’s 2.5% pace, while the producer-price index was up 7.8%, its biggest jump since September 2008.

OIL
  • Amazing!

US shale production is becoming more efficient.

Source: @nolahoubear (Via The Daily Shot)

  • Worrying!

  • Bulging!
  • Sinking!

Harold Hamm, the billionaire shale oilman, said the U.S. industry could “kill” the oil market if it embarks into another spending binge, a rare warning in a business focused on fast growth to compete with OPEC. 

The statement, at an energy conference in Houston on Wednesday, comes as top shale companies announce large increases in spending for this year, and the U.S. government says domestic oil output next year will surpass the record high set in 1970. (…)

Corporate Insiders Haven’t Been This Uninterested in Buying Stocks Since Reagan Was President

(…) There were a total of 279 insider buyers in January, the lowest in records of publicly traded companies that are required to disclose going back to 1988, according to the Washington Service, a provider of insider-trading data and analytics.

Meanwhile, the number of sellers has been above average, pushing a ratio of buyers to sellers in February to its lowest since 1988. (…)

“It’s not that insider selling is aggressive right now, it’s that there’s not a lot of insider buying,” Mr. Silverman said. (…)

Jeff Bezos Interview, RE/Code Conference