EIA, GDP, Market Observations 08/30/06
In our top story tonight, the leader of al-Qaida in Iraq, Abu Musab al-Zarqawi, is STILL dead and someone else has taken his place.
5 year note auction: Full Report
Inside the number: a stellar auction, yield 4.738%, bid to cover 3.11, the highest in 9 years, indirect bidders a strong 27.7%.
EIA inventory: Full Report
Inside the number: crude +2.4M barrels; gasoline +400Kb; distillate +1.3Mb; propane +609K. YOY inventories still at all time highs, peak what???
Q2 GDP 2.9% vs prior 2.5% Full Report
Inside the number: consumer spending +2.6% annual; durable goods +0.5% vs prior -0.5%; business investment +4.7%; chain deflator steady @ 3.3%.
However, equipment & software -1.6%, the largest drop in 3.5 years; residential investment -9.8%, the largest drop in 11 years. YOY core prices saw the largest increase in 11 years.
Bottom line: Business and residential investment has slowed. Business investment has not materialized as corporate cash in going to stock buybacks and M&A.
Chain deflator and core prices show steady price inflation. As consumer spending pulls back, business investment will slow further, adding fuel to the deflationary fire.
Yesterday, DJUA an all time high. The RUT touched 721, violating 717, this could mean upside 730-740. If this is month end window dressing, it has little conviction to it. Watch tomorrows core PCE for a potential knee jerk.
Retailer Costco (-5%) warned of lower than expected quarterly profit due to lower gross margins. Since 07/05 the stock has fallen 19.5%.
As tech is on the river of denial.... the RTH (retailers) & DJTA are STILL in a downtrend and signaling loudly to the industrials and broader market that LOWERED EXPECTATIONS lie ahead.
Keep it tween da ditches, we take it day by day and keep our eyes peeled to the sky, because it could be a name brand that pancakes us. Just my opinion, I could be wrong, this is The Nattering Naybob and your NOT!!!
5 year note auction: Full Report
Inside the number: a stellar auction, yield 4.738%, bid to cover 3.11, the highest in 9 years, indirect bidders a strong 27.7%.
EIA inventory: Full Report
Inside the number: crude +2.4M barrels; gasoline +400Kb; distillate +1.3Mb; propane +609K. YOY inventories still at all time highs, peak what???
Q2 GDP 2.9% vs prior 2.5% Full Report
Inside the number: consumer spending +2.6% annual; durable goods +0.5% vs prior -0.5%; business investment +4.7%; chain deflator steady @ 3.3%.
However, equipment & software -1.6%, the largest drop in 3.5 years; residential investment -9.8%, the largest drop in 11 years. YOY core prices saw the largest increase in 11 years.
Bottom line: Business and residential investment has slowed. Business investment has not materialized as corporate cash in going to stock buybacks and M&A.
Chain deflator and core prices show steady price inflation. As consumer spending pulls back, business investment will slow further, adding fuel to the deflationary fire.
Yesterday, DJUA an all time high. The RUT touched 721, violating 717, this could mean upside 730-740. If this is month end window dressing, it has little conviction to it. Watch tomorrows core PCE for a potential knee jerk.
Retailer Costco (-5%) warned of lower than expected quarterly profit due to lower gross margins. Since 07/05 the stock has fallen 19.5%.
As tech is on the river of denial.... the RTH (retailers) & DJTA are STILL in a downtrend and signaling loudly to the industrials and broader market that LOWERED EXPECTATIONS lie ahead.
Keep it tween da ditches, we take it day by day and keep our eyes peeled to the sky, because it could be a name brand that pancakes us. Just my opinion, I could be wrong, this is The Nattering Naybob and your NOT!!!
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