Core U.S. Producer-Price Index Posts First Drop in Two Years
Excluding food and energy, producer prices dropped 0.1% from the prior month, compared with projections for a 0.1% gain, a Labor Department report showed Friday. The 2.1% annual increase was the slowest in two years. The overall producer-price index rose 0.2% from June, matching projections. (…)
U.S. Wholesale Inventories Steady; Sales Decline
Some say inventories are voluntarily boosted to avoid tariffs. The problem is that sales are sinking in the meantime.
US retailers ‘at war’ with suppliers over price rises Trump’s threat to impose tariffs on more consumer goods leaves industry anxious
(…) “It’s much easier for someone like Walmart to say ‘this is the price we will accept or we’ll walk away’,” said Jeff Lenard, vice-president of strategic industry initiatives at the National Association of Convenience Stores. The rise of retailers’ own brands, known as private-label goods, had given the likes of Costco and Walmart even more control in negotiations, said Ken Harris, managing partner at Cadent Consulting Group. “They’ve been pushing back for a long time [against price rises],” he said. (…)
China’s Factory-Gate Prices Slip Into Deflation Producer prices fell into deflation for the first time in three years, as worries over the trade war with the U.S. sapped demand.
(…) While producer prices fell 0.3% from a year earlier in July—lower than economists’ median forecast for a 0.1% drop—consumer prices edged up to a 17-month high, squeezing households’ spending power. (…)
China’s consumer-price index, meanwhile, rose 2.8% in July from a year earlier, higher than June’s 2.7% growth and beating market expectations of a 2.7% increase. (…)
U.S. Holds Off on Huawei Licenses as China Halts Crop-Buying
U.S.-China Trade Battle Is Crimping Global Oil Demand In its oil-market report, IEA downgrades its forecast for global oil demand for the third time in four months
In its closely watched oil-market report, the IEA downgraded its forecast for global oil-demand growth for the third time in four months, lowering it to 1.1 million barrels a day from 1.2 million barrels a day. Demand for the January-to-May period was at its weakest since 2008. (…)
The organization’s output was down 2 million barrels from the same month last year—also because of lower output from Venezuela and Iran—and production dropped by 190,000 barrels a day from June levels. Saudi Arabia was again the largest cutter, lowering production by 120,000 barrels a day, while half of that was offset by a 60,000-barrel-a-day increase from Iraq.
Iranian production, meanwhile, fell 50,000 barrels a day to 2.23 million barrels a day in July, its lowest since the late 1980s, amid U.S. attempts to cut exports to zero through sanctions.
That said, “it is widely reported that significant volumes are moving under-the-radar,” and tanker storage is close to an all-time high, the IEA noted. (…)
OPEC’s cut in July slightly outweighed a 160,000-barrel-a-day rise in non-OPEC production in July, with the IEA citing rebounds in North Sea and Brazilian production as offsetting a fall in U.S. output. Hurricane Barry at one point shut down around 70% of production in the Gulf of Mexico.
Canada’s Jobs Machine Gears Down on Private-Sector Hiring Plunge
The economy lost 24,200 jobs in July, Statistics Canada said Friday in Ottawa, versus expectations for a gain of about 15,000. That comes after a decline of 2,200 jobs in June. The unemployment rate rose to 5.7%, a second monthly increase after reaching a four-decade low of 5.4% in May.
Evidence of accelerating wages was one of the few pockets of strength, with hourly pay up 4.5% in July from a year ago. That’s the strongest annual pay rise in a decade and may reflect the effects of labor-market tightening earlier this year. (…)
- Hours worked on a year-over- year basis slowed sharply, and the number of people employed by private sector companies plunged by the most since the last recession.
- The labor market had been on a torrid pace in the first half, when it added 247,500 jobs — the bulk of them full time. Over the past three months however, employment has been little changed.
OECD LEIS Continue to Decay
(…) OECD LEI data point to ongoing weakening of a relatively severe and worsening nature. (…)
Only China is showing improving momentum.
U.K. Economy Shrinks for First Time Since 2012 The British economy unexpectedly contracted in the second quarter as uncertainty over the country’s planned departure from the European Union on Oct. 31 took its toll on business confidence.
Global recession now a question of when, not if, economist David Rosenberg warns
“Fully 30 per cent of the world’s GDP now has their yield curves in an inverted state,” he added.
“Only the classic lags separate where we are now and the eventual downturn. Carry an umbrella and be ready to take it out. This means de-risking and becoming very defensive and well hedged.”
For investors, cash and gold are “kings” as yields decline.
“This meltdown in global market interest rates has happened, not at the bottom of the economic and equity cycle, but at the top!” Mr. Rosenberg added.
“Imagine where they go when the recession comes, unemployment rates rise and equities decline. Even in the USA, a move to negative yields out to the 10-year part of the curve is probable.” (…)
But this indicator, one of Rosenberg’s favorite, ain’t flashing anything bad just yet, is it?
EARNINGS WATCH
As of last night, we have 450 reports in, a 73% beat rate, a +5.7% surprise factor and a blended growth rate of 2.8%.
Trailing EPS are $164.24. The Rule of 20 P/E is back to Fair Value 19.9.
Speaking of earnings, Uber is not delivering just yet. Here’s how you can lose $5.2 BILLION in one quarter:
Uber moves into grocery deliveries as it posts $5bn loss Ecommerce push puts ride-hailing company in competition with Amazon
(…) The quarterly net loss, which hit $5.2bn vs $878m a year ago and included $3.9bn in stock-based compensation expenses related to the IPO, was spectacular in its own right. (On an adjusted basis the EBITDA loss came in at $656m, which marks an improvement on Q1.)
But the thing that really hit market sentiment was the slowdown in revenue growth at 14 per cent to $3.2bn. (…)
1 thought on “THE DAILY EDGE: 9 AUGUST 2019”
We’ve arrived: Get paid when you take out a mortgage:
A bank in Denmark is offering borrowers the chance to take out mortgages at a negative interest rate, effectively meaning that it will pay customers to borrow money.
Jyske Bank, Denmark’s third-largest bank, said this week that customers would now be able to take out a 10-year fixed-rate mortgage with an interest rate of -0.5%.
“A few months ago, we would have said that this would not be possible, but we have been surprised time and time again,” the Jyske Bank housing economist Mikkel Høegh said.
Offering loans at a negative rate may seem counterintuitive. But some banks are content to take a guaranteed small loss rather than risk bigger losses.
https://www.businessinsider.com/danish-bank-offers-mortgages-at-negative-interest-rates-2019-8
Comments are closed.