pebblewriter

Posts

  • Housing Boom: 2007 Redux

    Single-family home starts continued to gain from rock bottom interest rates and the exodus from urban, multifamily housing amid the pandemic. September residential starts grew 1.9%, while permits rose 5.2%, the fastest since the 2007 peak.

    Single-family inventory dipped to 3.3 months, the smallest since 1963, while multifamily starts cratered by 16.3%.

    It was a bright spot of economic news following an ugly day of losses across all indices yesterday that saw ES tumble to our next downside target.

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  • Charts I’m Watching: Oct 19, 2020

    Futures are higher ahead of the open on a slight increase in interest rates and the usual algo-baiting such as USDJPY’s latest bounce.

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  • Retail Sales’ Last Hurrah?

    September retail sales sharply beat estimates, coming in at +1.9% versus 0.8% expected. With enhanced unemployment and virtually all other stimulus having dried up, however, this could be retail’s last hurrah.

    But, it’s enough to boost stock prices on this OPEX Friday 2 1/2 weeks before a presidential election.

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  • The Pandemic’s Stark Reminder

    Futures tagged our initial downside target overnight as markets are once again reminded that the pandemic is far from over.

    The shutdown headlines out of Europe won’t surprise anyone who has been watching the COVID-19 numbers.

    The US, which was considerably less successful in suppressing cases following the initial or second surge, is on the same path – but from a much higher base.

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  • Charts I’m Watching: Oct 14, 2020

    Futures are slightly higher ahead of the open after tumbling as many as 49 points from Monday’s highs.This, despite a sharp rally in oil ahead of the holiday delayed EIA inventory report and a (barely) bearish cross in VIX. The algos are getting nervous.

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  • CPI: Putting the Brakes On

    CPI rose 0.2% MoM in September, half the August rate. It rose 1.4% YoY, slightly higher than September’s 1.3%. Without the outsized gains in used cars and the minor gains in energy (conflicting with the official EIA data), MoM CPI would likely have been negative.

    This is hardly supportive of the reflation narrative driving equity prices lately. This should be the last straw for the 10Y’s bounce, with the resulting breakdown a significant headwind for stocks.

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  • A Cure?

    Despite the number of US coronavirus cases nearing 8 million and deaths approaching 220,000, the algos continue to focus on their daily dose of collapsing VIX.

    It’s enough to make one wonder whether central bankers have found a cure for a market correction.

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  • The Beat(down) Goes On

    VIX’s beatdown continues to nudge algos higher, finally dropping through its Sep 16 lows.

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  • More Gimmicks, Higher Highs

    More gimmicks, higher highs. It’s getting to be an old story. But, as long as voters and algos don’t know or care, it will continue.

    Futures were in danger of giving up Tuesday’s 3421.75 highs when VIX suddenly collapsed by 7% in a matter of seconds.When that didn’t immediately result in a sufficient boost, it happened again, this time around the jobless claims miss at 8:32 and yet again at 9:02 (by 9.8%) for good measure.

    Higher highs, no problem.

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  • Charts I’m Watching: Oct 7, 2020

    If you don’t like the headlines, just wait. Sure enough, someone in the White House noticed the market wasn’t so keen on breaking off stimulus talks, and Trump followed up with a great big JK before the overnight session continued the carnage of the last hour of trading.

    The breakout which became a breakdown is, again, threatening to break out.

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