Conference Board Leading Economic Index Sees Fractional Decline in July

The index dropped 0.2 percent, which follows a 0.6 percent May increase. The latest indicator value came in below the 0.2 percent forecast by Investing.com.

Here is an overview from the LEI press release:

The Conference Board LEI for the U.S. decreased slightly in July, primarily the result of a large decline in building permits. In the six-month period ending July 2015, the leading economic index increased 1.7 percent (about a 3.5 percent annual rate), slower than its growth of 2.4 percent (about a 4.8 percent annual rate) over the previous six months. However, the strengths among the leading indicators remain more widespread than the weaknesses. [Full notes in PDF]

As we can see, the LEI has historically dropped below its six-month moving average anywhere between 2 to 15 months before a recession. The latest reading of this smoothed rate-of-change suggests no near-term recession risk.

U.S. Existing-Home Sales Rise to Prerecession Pace

Existing-home sales rose 2% last month from June to a seasonally adjusted rate of 5.59 million, the National Association of Realtors said Thursday. Last month’s sales pace was the highest since February 2007 and 10.3% higher than a year earlier.

Total housing inventory fell 0.4% at the end of July to 2.24 million existing homes available for sale, 4.7% lower than a year ago. At the current pace of sales it would take 4.8 months to exhaust the supply of homes on the market, down from 5.6 months a year ago, the NAR said Thursday.

The median sale price for a previously owned home slipped slightly to $234,000 from June’s $236,300, but is still 5.6% higher than a year earlier.

Mr. Yun noted that first-time buyers declined to 28% of all buyers, the lowest share since January. Sales are being driven largely by buyers who already own homes, he said.

Home sales rose in the South and West, but fell in the Northeast and stayed flat in the Midwest.

Philly Fed Beats Expectations

Unlike its sibling report for the New York area earlier this week, the August release of the Philly Fed Manufacturing report increased versus July and came in better than expectations. The General Business conditions components increased from 5.7 up to 8.3 versus expectations for a jump to 6.8.  Of the nine sub-components for the index, six increased this month while just three declined.  The biggest gains on the month came from Shipments (+12.3), Number of Employees (+5.7), and Unfilled Orders (+5.3).  With the increase in Number of Employees plus a jump in the Average Workweek component, employment in the area appears to be healthy.  On the downside, the Prices Paid component saw the largest decline this month falling from 20.2 down to 4.2.  That was the largest one-month decline for the index since March 2012.

• Philly Fed Survey Provides Critical Contrast to Empire Results

Thai Economic Growth Rises 2.8%

Thai gross domestic product rose 2.8% in the second quarter from a year earlier, the National Economic and Social Development Board said Monday.

In the first quarter of 2015, GDP grew 3% from a year earlier.

When compared with the previous quarter, Thailand’s economy grew 0.4% in seasonally adjusted terms in the second quarter.

The Thai government’s economic planning agency now expects exports to contract 3.5% in 2015, compared with a previous forecast for 0.2% growth.

It also cut this year’s GDP growth estimate to 2.7% to 3.2% from 3.0% to 4.0%.

SUPPORT!!!

What Will It Take For The Fed To Panic And Bail Out The Market Once Again: BofA Explains

(…) In fact, the “credit event” (read “failure”) of a company like Glencore is precisely what BofA’s Michael Hartnett said “may be necessary to cause policy-makers to panic.”

Bank of America starts with a chart that ZH readers are all too familiar with: a comparison of the CDS of Noble and Glencore which as duly noted many times already, have recently spiked:

And here is why Bank of America decided to suddenly focus on a small subset of the commodity sector, one which we have been fascinated with for over a month: to BofA the collapse of either of these two companies is the necessary and/or sufficient condition for the Fed to exit its recent trance, and reenter and bailout the market.

That’s right: Bank of America is begging for another Fed-assisted market bailout, which gladly hints would be accelerated should Glencore experience a premature “credit event.” To wit:

Short-term, markets seem intent on forcing either the Fed to pass in September, or the Chinese to launch a more comprehensive and credible policy package to boost growth expectations. Alternatively, a credit event in commodities (note CDS is widening sharply for resources companies – front page chart) may be necessary to cause policy-makers to panic. Markets stop panicking when central banks start panicking. We think that is increasingly likely in September, thus arguing that risk-takers should soon look to add risk, particularly on any further weakness.

(…) And while that is a major loose end to any trading thesis BofA may want to present, it does hedge by saying that all bets on a market bailout are off if the Fed and other central banks have now “lost their potency”, i.e., if the market’s faith in money printing has ended.

Finally, we believe the inexorable rise in volatility as QE programs wane leads to the ultimate risk. In our view, all investment strategies have been tied in recent years to the power of central banks. There are few bond vigilantes willing to punish profligate governments, fewer currency speculators willing to defy central bank intervention, and investors have become adept at front-running policy-makers and/or expecting central banks will “blink” at signs of market volatility. We believe a loss of central bank potency is an unambiguous risk-off.

(…)