Sharp Rebound in Core Capex Orders and Shipments
New orders for durable goods decreased 4.5% MoM, driven by a $15.0bn decrease in new orders for nondefense aircraft. Durable goods ex-transport (+0.7%), core capital goods orders (+0.8%), and core capital goods shipments (+1.1%) all increased in January.
Is this a reacceleration, or just a better month (weather, seasonal adjustments?) within a pretty bad trend (flat in the last 5 months)?
Pending Home Sales Improved for Second Straight Month, Up 8.1% in January
The Pending Home Sales Index (PHSI) — a forward-looking indicator of home sales based on contract signings — improved 8.1% to 82.5 in January. Year-over-year, pending transactions dropped by 24.1%.
The FOMC is primarily focused on the non-housing core services PCE inflation, which registered its biggest monthly increase in over a year.
Source: Normura Securities (via The Daily Shot)
Other CPI surprises. European bond yields climbed as investors digested hotter-than-expected inflation prints in France and Spain. Traders cranked up wagers for the ECB deposit rate to hit 4% for the first time, sending the yield on two-year German debt to the highest since 2008. (Bloomberg)
Disability employment hits record high
Here’s a segment of the U.S. population that did not leave the labor force:
Data: Bureau of Labor Statistics; Chart: Axios Visuals
That’s 1M additional workers:
Subprime Auto Lender American Car Center Closes for Business
American Car Center told employees the business was closing its doors, a day after it pulled a $222 million bond sale from the market, according to people familiar with the matter.
The used car retailer, which tends to target consumers regardless of their credit history, said in an email to employees on Friday the firm was ceasing all operations, closing its headquarters in Memphis, Tennessee, and that all employees would be terminated by the end of the business day, the people said. The headquarters has about 288 people. (…)
The shutdown comes as more Americans are starting to fall behind on their car payments, and the distress cycle is rapidly accelerating. (…)
- Used car wholesale auction prices have jumped 7½% [in the last 2 months], reflecting a combination of temporary disruptions to new car production and a more persistent drag on used car supply. (GS)
The subprime market is imploding with rising inflation and interest rates.
(Delinquencies on credit cards are at record levels at smaller banks.
CNBC reported Wednesday that Google has instructed employees and contractors within its cloud division to share desk space and alternate in-office workdays to improve “real estate efficiency.” That move will impact staffers in Google’s five largest corporate locations, including New York, San Francisco and Seattle. (ADG)
Apple Suppliers Are Racing to Exit China, AirPods Maker Says
(…) Behind the scenes, 9 out of 10 of Apple’s most important suppliers may be preparing large-scale moves to countries like India, which is dangling incentives to drive Narendra Modi’s Make in India initiative. Bloomberg Intelligence estimates it could take eight years to move just 10% of Apple’s capacity outside of China.
The GoerTek executive argues it’ll be far quicker.
Most Chinese tech manufacturers are experiencing the same pressure. “I would say currently 90% of them, they’re looking at that,” he added. “It’s the brand companies’ decisions.” (…)
“There will be blood”… : The SPAC Fad Is Ending in a Pile of Bankruptcies and Fire Sales