Many investors hoped a modest decline and a leveling off in mortgage delinquencies the end of last year signaled a top for the index, but those hopes were dashed when delinquencies for all types of mortgage hit a new high during the first quarter. Fears were further exacerbated yesterday when Lender Processing Services released their […]
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Recently I’ve come across several headlines comparing recent activity in the stock market to what occurred during the Great Depression, so I ran the numbers. The attached chart tracks the S&P 500 20 months prior (t-20) to its respective high prior to the Great Depression and the recent recession; ‘t’ indicates the actual high. You […]
Historically, payroll growth rarely exceeds 400K in any given month, even in the best of times, not good news considering the US has lost 8mn jobs since the start of the recession. Some analysts have discussed a best case scenario where payrolls rise by 1mn a month, bringing us back to the pre-recession peak within […]
Disheartened job seekers who fled the labor market in mass during the height of the recession have begun to return putting pressure on the US unemployment rate. Based on a simple interpolation the U.S. labor force today should total 157.2mn, however due to the exodus of job seekers the labor force presently amounts to only […]
Those looking for evidence of an upcoming double dip recession may have found their canary. The Economic Cycle Research Institute’s (ECRI) Weekly Leading Index is pointing to serious trouble ahead for U.S. economy with the index falling seven consecutive weeks moving into negative territory. According to Laksham Achutan, managing direction of ECRI, “The continuing decline […]
Despite Friday’s better than anticipated confidence number it’s unlikely the index can show sustained gains until initial jobless claims move well below current levels. As the attached chart highlights, in 2009, as claims began to fall, confidence began to rise off of crisis lows. However, since the start of 2010 this trend came to an […]
Inflation doves can look no further than near record low yields on 2-year Treasuries to squelch inflation hawks ‘premature’ concerns. The 2-year yield is reflecting the fact that the recovery will remain lukewarm, with downside risks outweighing the contrary, essentially opening up hunting season on Fed hawks—already in small supply. While hawk hunting may be […]
The amount of new homes for sale in the U.S. reached a multi-decade low in May helping boost U.S. homebuilders. To find a point in time where fewer new homes were on the market you would have to go all the way back to the early 70’s/late 60’s (see chart). While the sales pace of […]
Investors are feeling more at ease with the uncertainty facing global market. The AUD/JPY exchange rate—a popular FX carry trade and risk metric—has moved off of its recent lows of less than 74 to a level of 79.4. At the same time, 3M LIBOR halted its climb, and has remained fairly steady around 0.54%, albeit […]
Unusual volatility in the sale of building materials has exaggerated retail sales over the past three months. While this doesn’t change the prevailing trend, sales in both April and March would have appeared far less optimistic than reported. Building material sales climbed 8.0% in both March and April-a pace not seen since March 2004-plummting -9.3% […]