Wage Growth Momentum Is Still Strong

Wage Growth Momentum - Strong Wage Growth In previous articles I have discussed how strong wage growth catalyzed the increase in the 10 year yield in the past few weeks. Technically, average hourly wage growth missed estimates on a year over year basis as it fell from 2.9% to 2.8%. But this was another strong…

Housing Price Index Signals Pain

Housing Price Index - More Weakness In The Housing Market Coming? The ECRI leading home price index is yet another indicator on the housing market which has gone negative. Higher interest rates are hurting home prices. And, the weakness in housing can easily lead to lower rates as economic growth slows. People’s primary house is…

Spiking Mortgage Rates Hurt Housing Market

Spiking Mortgage Rates - Soaring Housing was weak this summer because affordability was a problem. Real wage growth basically treaded water while interest rates soared. That’s not a recipe for strength in housing. When you add in the increased costs for metals because of the tariffs, we’re in an unusually terrible situation for homebuilder stocks.…

10 Year Yield Hits 3.17%

10 Year Yield - Stocks Stay High Despite High Yields The Russell 2000 finally increased after a terrible run; it was up 0.92%. The overall stock market was up slightly as the S&P 500 was up just 7 basis points. The real action today was in the treasury market. An important point about the stock market…

ISM PMI - Best Reading Since 1998

ISM PMI - Best Reading Since 1998 The non-manufacturing PMI was 61.6 which surpassed the consensus of 58. Out of 65 economists making predictions, the highest estimate was 59.6. This was a 5 standard deviation beat. It was much better than the prior PMI which was 58.5. As you can see below, this was the…

4.1% GDP Growth Expected Because Of Inventory Investment

4.1% GDP Growth Expected The Atlanta Fed Nowcast expects 4.1% Q3 GDP growth which is up from 3.6%. The government construction spending growth caused the Atlanta Fed Q3 estimate for real government spending growth to increase from 1% to 1.7%. The estimate for real personal consumption expenditures increased from 3.5% to 3.7% because of the…

Amazon Raises Its Minimum Wage To $15 Per Hour

Amazon Raises Its Minimum Wage To $15 Retail stocks fell because Amazon announced it will raise its minimum wage to $15 per hour. Amazon stock fell 1.65% and Gap stock fell 4.91%. The minimum wage is starting on November 1st. It will affect 250,000 of Amazon’s current employees which is 40% of its global workforce.…

Trade Deal - Canada and America Agree

Trade Deal - U.S. Makes A Trade Deal With Canada Last Friday, it looked unlikely that America and Canada would reach the September 30th deadline to make a trade deal. But it happened on Sunday night. The action on Monday makes perfect sense as the Dow increased 0.73% and the Russell 2000 fell 1.39%. America…

Global Manufacturing Hits A 22 Month Low

Global Manufacturing - Markit PMI Matches Highest Estimate The Markit global manufacturing PMI beat estimates and increased from August. The ISM PMI did the reverse. Prior to this set of reports, the ISM reports have been wildly optimistic. But the Markit ones have shown weakness. Let’s review the Markit report first. The September flash Markit…

Healthcare Sector Increases 14.1% In Q3

Healthcare Sector - Without GE Dow Increases 9.3% Healthcare was the best sector in Q3 as it increased 14.1%. That was its best quarter since Q3 2013. The next two best sectors were the industrials and tech which were up 9.7% and 8.5%. While tech has changed its makeup, Apple remains in the sector. Apple…