It seems as if some “markets” are having a difficult time coping with the different speed at which the economy is changing. Maybe that should be expected given the dramatic transformation of them into often computer-driven frenzies of headline scans. But this is something else, made so by the nature of this current economic condition as divorced from our experience. [...]
The ongoing lesson in PMI interpretation added another layer with China’s turn. The official manufacturing PMI dropped back to 50.1in April from 50.2 in March. Last month’s rise above 50 was the first in that position since last July. Because of the mainstream interpretation about what 50 or not 50 means, it was taken then as if it were definitive [...]
The big news of the day had nothing to do with Janet Yellen, which was entirely appropriate given both her stance on the economy and anything she could possibly, realistically do about it (nothing). Apple reported results that were shocking in many ways, though not necessarily unexpectedly so. Last quarter, CEO Tim Cook had warned that the business had shifted. [...]
Today was the third consecutive down day or selling in eurodollar futures. The June 2018 contract settled below 98.80 for the first time in April, almost unwinding the move higher at the start of this month. Even after the selling, the eurodollar curve remains as depressed as ever, discounting an entirely different set of future circumstances than stocks or junk [...]
On April 12, Muhammadu Buhari, President of Nigeria, was in Beijing to negotiate Chinese aid for his ailing country. At home, the government faces an enormous budget deficit largely on the price of oil. The more immediate threat, however, is that Nigeria in large part due to oil prices is being squeezed by monetary shortage. The country is an import-heavy [...]
The focus on China and the Chinese economy is not just related to its size but more so the fact that it is the pivot point for the whole global system. In pure economic terms, as “end demand” from the developed world economies slows, the Chinese economy either absorbs that reduction (through its own internal “stimulus”) or passes it on [...]
It is remarkable the disparity in views on display by various markets and what that suggests about what is driving each. In stocks and especially junk bonds, you get the sense of a massive sigh of relief that “it’s all over”, and while scary for a time it’s back to momentum and not missing out on the big money bargains. [...]
You can always tell what kind of monthly variation any economic account provides from the commentary by which it is described. And there are, apparently, only two options: upward variations mean stimulus is working; downward variation just means that there will be more stimulus. Even by this crude cipher, you can still discern the state of the economic world since [...]
The world cheered this morning’s trade estimates from China, as both exports and imports rebounded from a dismal start to the year. Exports rose 11.5% in March after falling 25% in February; imports fell “only” 7.6% after declining 13.8% the month before. Despite the difficulties with data calculations around the Lunar New Year, economists were quick with their usual glowing [...]
On average, pig prices in China are about 50% higher to start this year than last. At about 25RMB per kg, prices are already above the seasonal surge that typically occurs during late summer. Last year, as pig prices started this huge run, wholesale pork jumped from a low of about 17RMB per kg at the start of April 2015 [...]
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