US Economics Weekly Fed’s rate forecasts veering like a drunken sailor The key US event this week will be Fed Chair Janet Yellen’s semi-annual testimony to Congress. She will be testifying to the Senate Banking Committee on Tuesday and the House Financial Services... 17th June 2016 · 1 min read
US Housing Market Data Response Housing Starts (May.) Today’s data on housing starts were somewhat disappointing, showing no change in starts between April and May. But with market conditions still tight and builder confidence rising, starts should... 17th June 2016 · 1 min read
DM Valuations Monitor Is average normal for US equities? The bears’ argument that the valuation of the US stock market is unsustainably high is typically made by comparing the current level of Shiller’s cyclically-adjusted price/earnings ratio (CAPE) for... 17th June 2016 · 1 min read
US Data Response Consumer Prices (May) Headline CPI inflation remained well below the Fed’s target in May, but base effects will push it well above 2% by early next year. Both headline and core consumer prices increased by a solid 0.2% m/m... 16th June 2016 · 1 min read
US Housing Market Update Why can’t home sellers extract higher prices? Given low inventory levels, experience suggests that house prices should be rising at double their current rate of around 5% y/y. But with low numbers of existing homes for sale, the behaviour of... 16th June 2016 · 1 min read
US Economics Update Fed moves the goal posts yet again Despite leaving its economic projections largely unchanged today (GDP growth expectations were revised down slightly, inflation forecasts were revised up slightly) the FOMC nevertheless cut its... 15th June 2016 · 1 min read
Energy Data Response Energy Data Response US crude stocks fell again last week due to lower imports and production. Demand for gasoline rose to an all-time high as low prices continue to stimulate consumption. 15th June 2016 · 1 min read
US Data Response Industrial Production (May) The 0.4% m/m decline in industrial production in May, which was slightly worse than consensus expectations, was largely due to a similar-sized slump in output in the struggling manufacturing sector. 15th June 2016 · 1 min read
Global Markets Focus A new equilibrium in the US stock market In our view, the equilibrium price/earnings ratio of the US stock market is now much higher than its long run average. Indeed, we think it is close to its current cyclically-adjusted level. If we are... 14th June 2016 · 1 min read
US Economics Update No evidence of labour market downturn in NFIB survey The latest NFIB survey suggests that small businesses are still intent on hiring additional workers, even though finding suitably qualified employees is getting harder. Unfortunately, small businesses... 14th June 2016 · 1 min read
US Data Response Retail Sales (May) The strength of the May retail sales report should provide plenty of comfort to those concerned that the recent slump in payrolls would be followed by a downturn in activity. It still appears that... 14th June 2016 · 1 min read
US Economics Update Inflation expectations are rising not falling The decline in long-term inflation expectations to a record low in the University of Michigan’s June consumer confidence survey won’t prevent the Fed from raising interest rates, not least because... 13th June 2016 · 1 min read
US Economics Weekly Slump in payroll growth closely resembles the 2012 dip There are one or two genuine reasons to worry about the strength of the labour market. But the deeper we dig, the more we’re convinced the spring slowdown in payroll employment growth is a temporary... 10th June 2016 · 1 min read
US Data Response UoM Consumer Confidence (Jun.) The University of Michigan’s consumer confidence measure was broadly unchanged at an elevated 94.3 in June, which suggests the pick-up in second-quarter consumption growth will continue into the... 10th June 2016 · 1 min read
Energy Data Response US Weekly Petroleum Status Report US crude oil inventories fell for the third week in a row last week thanks to lower net imports and stronger refinery demand. Notably, overall production rose on the week. 8th June 2016 · 1 min read
US Fed Watch Fed won’t move until labour market uncertainty clears The sudden stop in employment growth rules out any chance of a rate hike from the Fed at next week’s FOMC meeting, particularly now that the UK vote on whether to leave the European Union (EU) appears... 8th June 2016 · 1 min read
