Dentalfloss
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Trading with point and figure
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Dentalfloss
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have the bulls got muscle
Dentalfloss
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ditto
Dentalfloss
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ditto
Dentalfloss
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in support
will it hold..??
will it hold..??
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updated
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Mornin folks ☕☕☕☕
⭐⭐⭐⭐
⭐⭐⭐⭐
Dentalfloss
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DAX
not sure what happens next
not sure what happens next
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Ditto
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In support....bounce..??
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pop..??
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UJ
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Naz has an inkling of selling
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the strongest index
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pop that trendline..??
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SPX is vertical
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Good Morning: The Long & the Short of it and The Bigger Picture - 15 April 2019 - ADM ISI
- Quiet start to Easter week digesting China/USA trade optimism, awaiting
US NY Fed survey & TIC Portfolios, Canada BoC quarterly surveys and
India WPI; financials again dominate US corporate earnings run; plenty
of central bank speakers
- US NY Fed: rebound expected, but likely to reinforce perception of
substantial loss of momentum, focus on orders
- Week Ahead: busy week for major data in US, China and UK along with
corporate earnings; liquidity conditions thin
- ADM ISI Morning Call audio preview:
https://www.mixcloud.com/MOstwaldADM/adm-isi-morning-call-15-april-2019/
*** PLEASE NOTE THAT THERE WILL BE VERY LIMITED UPDATES TOMORROW **
..........................................................................
********************
** EVENTS PREVIEW **
********************
The week gets off to a relatively quiet start in terms of the statistical schedule, featuring India Trade and WPI, ahead of the NY Fed Manufacturing survey and TIC Portfolios, and the Bank of Canada's key quarterly surveys in the Business Outlook and of Senior Loan officers. Central bank speakers are plentiful - BoJ, ECB, BoE & Fed; while financials again dominate the corporate earnings schedule via way of Citigroup and Goldman Sachs. But markets' main talking points will almost certainly further signals from Mnuchin on Friday and over the weekend (in terms of the US easing demands that China cut subsidies) that a US/China trade deal is getting ever closer, and of course the array of plots to oust UK PM May.
In term of the NY Fed survey, the consensus looks for a rebound to 8.0 from March's 3.7, per se suggesting the sector remains under something of a cloud, at least relative to mid-2018, and even if the NY Fed region is not the best proxy for national trends. Orders have been the weak point throughout Q1 - March 3.0, Feb 7.5, Jan 3.5 as against an average for Q4 of 13.0, and it will be this component that attracts most attention.
RECAP - The Week Ahead
While political risk might appear to be in abeyance as we head into the Easter holiday period, it has definitely not been completely sidelined, with EU/US trade tensions probably the main current point of concern. There will certainly be plenty of activity data to digest from the US and China, while the UK has inflation, labour and Retail Sales, Japan Trade, Canada looks to the key quarterly BoC business & credit surveys, and Australia to labour data, and 'flash' PMIs dominate a busy run of surveys. The US Q1 earnings gradually cranks into gear with financials dominating, there are a plethora of Fed and ECB speakers, the Fed publishes the Beige Book, Japan and the US hold trade talks, while Indonesia holds its presidential election. The bond auction schedule has a multi-maturity OAT & OATei sales in France, German 25-yr, Dutch 10-yr, in sum totalling around EUR 12.0 Bln, with the UK offering £2.25 Bln 2037 Gilt and the US $17.0 Bln of 5-yr TIPS. As previously noted, the thin liquidity conditions due to holidays over the next 3 weeks against a backdrop of low volatility could be a recipe for the occasional sharp spike in the one or other market, see also:
- As previously noted, the pointers on the US economy since mid-March have suggested that recession talk has been overdone, even if the economy is clearly running at a slower pace than mid-2018, though somewhat above its potential rate, which is likely to be the message from this week's Beige Book. In terms of 'hard' data, Retail Sales takes pride of place with a solid bounce expected after February's unexpected drop: headline 0.9% m/m, ex-Autos & Gasoline 0.5%, 'control group' 0.4%, which if correct would point to a reasonable contribution to Q1 GDP from Personal Consumption. The manufacturing sector picture (leaving aside Boeing's obvious woes) is rather less clear in terms of how much momentum has been lost, as such there will be considerable focus on the April NY & Philly Fed manufacturing surveys, which accompany Industrial Production that is expected to eke out a meagre 0.2% m/m after flat-lining in February and dropping 0.4% in January, with Manufacturing Output seen up just 0.1% m/m after prior readings of -0.4% and -0.3%, implying a substantial drag on Q1 GDP. Aside from inventories (Wholesale data are due this week), the other key swing element for Q1 GDP will be Net Exports, with the February Trade Balance seen widening to $-53.5 Bln from a much a better than expected $-51.1 Bln in January, which would suggest a fairly robust contribution (0.5-0.7 ppt?) to GDP. Meanwhile the NAHB Housing Market Index is expected to recover further to 64 from 62, boosted by lower mortgage rates and slightly stronger wage growth.
Friday's very strong Chinese lending data implied that the economy has been given a ca 9.0% of GDP boost via this channel in Q1, even if many will questions the wisdom of re-leveraging the economy, when anecdotal reports suggest NPLs at China's banks have been rising sharply, and per se raising questions about how much of the jump in Total Social Financing (TSF) (Q1 40% y/y) will boost the economy, and how much is to shore up bank balance sheets, or put a lid on the rise in Unemployment. Eminently, it is more likely to show up in this week's Q1 GDP or monthly FAI, and more likely to give a boost in Q2 and Q3, with Q1 GDP seen slowing to 1.4% q/q from 1.5%, which would see the y/y rate dip to 6.3% from 6.4%. Fixed Asset Investment has been a relatively bright spot relative to the weak trends seen in Industrial Production, thanks in the main to a solid pace of Private Sector FAI offsetting what was for much of 2018 a flat trend in the Public Sector, which appears to have turned modestly higher at the start of 2019, and should be the key factor behind an anticipated push up to 6.3% y/y from 6.1%. Given the big boost to TSF, this will need to push up towards 10% y/y or more, if the lending boost is to be adjudged to be productive, rather than simply adding to an already cumbersome debt burden. Some modest improvements are expected for Retail Sales (8.3% y/y vs. 8.2%) and Industrial Production (5.6% y/y vs. 5.3%), but this would still leave both close to 16 and 10 year lows, respectively.
The Easter parliamentary recess and deadline extension should offer some respite from Brexit related news, and allow some time to focus on the economy. Labour market data are again expected to paint a reasonably robust picture, with Employment seen posting another solid 173K gain, and Average Weekly Earnings to hold around their cyclical highs at 3.5% y/y headline and 3.4% ex-Bonus. CPI is projected to rise 0.2% m/m, which would edge headline y/y up to target at 2.0% and core to 1.9%, with food and petrol likely to be the main drivers, and the key short-term question being how much the rise in the household energy price cap boosts CPI in Q2, but in all likelihood CPI looks likely to be around target for most of 2019, barring some very sharp FX or oil price moves. Retail Sales are forecast to dip 0.3% m/m, reversing most of February's +0.4%, though thanks to base effects from last year's 'beast from the East' this would push headline y/y sales to 4.6% from 4.0% and, depending on revisions, this would see the more reliable trend indicator that is the 3-mth/3-mth rate edge up to 0.8% q/q from 0.7%.
April 'flash' PMIs are also due, with the focus above all on the Euro area readings, which were above all in Manufacturing terms were very weak in March, even if national survey measures such as the Ifo suggested that this was yet another occasion on which the PMIs were probably offering a poor 'steer' on underlying trends. A very marginal rebound for French and German readings is expected, with a still very wide gulf in Services terms - Germany median 55.0 from 55.4, France 49.8 from 49.1. A similar story was seen in the US in March, with the ISM measures proving a good deal more resilient than PMIs, with the consensus for April looking for marginal moves to 52.8 Manufacturing and 55.0 Services.
- As much as there are a deluge of Fed and ECB speakers this week, it seems unlikely that they will offer any fresh insights into their respective policy outlooks, with the Fed very much 'patiently' on hold for at least the next 6 months, while ECB staff working groups engineer the details of TLTRO III.
- On the corporate earnings front, the consensus according to S&P's Factset is for Q1 earnings to post an overall fall of 4.3%, and as always been the case such low expectations facilitate plenty of 'beats' on EPS and revenues - indeed of the 6% of S&P500 companies which have reported, 83% have seen a positive EPS surprise and 59% a positive revenue surprise. However perhaps the key focal point should be on interest cover ratios, above all given the exponential rise in non-financial corporate debt over the past 10 years. As the attached chart highlights, current cover ratios are not as poor as they were in 2016, but are again deteriorating, and this despite low levels of yields and tight credit spreads, per se the vulnerability to even a modest rise in rates and/or spreads could prove very challenging, to say the least.
| Inbox | x |
| 08:31 (1 minute ago) |
|
- Quiet start to Easter week digesting China/USA trade optimism, awaiting
US NY Fed survey & TIC Portfolios, Canada BoC quarterly surveys and
India WPI; financials again dominate US corporate earnings run; plenty
of central bank speakers
- US NY Fed: rebound expected, but likely to reinforce perception of
substantial loss of momentum, focus on orders
- Week Ahead: busy week for major data in US, China and UK along with
corporate earnings; liquidity conditions thin
- ADM ISI Morning Call audio preview:
https://www.mixcloud.com/MOstwaldADM/adm-isi-morning-call-15-april-2019/
*** PLEASE NOTE THAT THERE WILL BE VERY LIMITED UPDATES TOMORROW **
..........................................................................
********************
** EVENTS PREVIEW **
********************
The week gets off to a relatively quiet start in terms of the statistical schedule, featuring India Trade and WPI, ahead of the NY Fed Manufacturing survey and TIC Portfolios, and the Bank of Canada's key quarterly surveys in the Business Outlook and of Senior Loan officers. Central bank speakers are plentiful - BoJ, ECB, BoE & Fed; while financials again dominate the corporate earnings schedule via way of Citigroup and Goldman Sachs. But markets' main talking points will almost certainly further signals from Mnuchin on Friday and over the weekend (in terms of the US easing demands that China cut subsidies) that a US/China trade deal is getting ever closer, and of course the array of plots to oust UK PM May.
In term of the NY Fed survey, the consensus looks for a rebound to 8.0 from March's 3.7, per se suggesting the sector remains under something of a cloud, at least relative to mid-2018, and even if the NY Fed region is not the best proxy for national trends. Orders have been the weak point throughout Q1 - March 3.0, Feb 7.5, Jan 3.5 as against an average for Q4 of 13.0, and it will be this component that attracts most attention.
RECAP - The Week Ahead
While political risk might appear to be in abeyance as we head into the Easter holiday period, it has definitely not been completely sidelined, with EU/US trade tensions probably the main current point of concern. There will certainly be plenty of activity data to digest from the US and China, while the UK has inflation, labour and Retail Sales, Japan Trade, Canada looks to the key quarterly BoC business & credit surveys, and Australia to labour data, and 'flash' PMIs dominate a busy run of surveys. The US Q1 earnings gradually cranks into gear with financials dominating, there are a plethora of Fed and ECB speakers, the Fed publishes the Beige Book, Japan and the US hold trade talks, while Indonesia holds its presidential election. The bond auction schedule has a multi-maturity OAT & OATei sales in France, German 25-yr, Dutch 10-yr, in sum totalling around EUR 12.0 Bln, with the UK offering £2.25 Bln 2037 Gilt and the US $17.0 Bln of 5-yr TIPS. As previously noted, the thin liquidity conditions due to holidays over the next 3 weeks against a backdrop of low volatility could be a recipe for the occasional sharp spike in the one or other market, see also:
- As previously noted, the pointers on the US economy since mid-March have suggested that recession talk has been overdone, even if the economy is clearly running at a slower pace than mid-2018, though somewhat above its potential rate, which is likely to be the message from this week's Beige Book. In terms of 'hard' data, Retail Sales takes pride of place with a solid bounce expected after February's unexpected drop: headline 0.9% m/m, ex-Autos & Gasoline 0.5%, 'control group' 0.4%, which if correct would point to a reasonable contribution to Q1 GDP from Personal Consumption. The manufacturing sector picture (leaving aside Boeing's obvious woes) is rather less clear in terms of how much momentum has been lost, as such there will be considerable focus on the April NY & Philly Fed manufacturing surveys, which accompany Industrial Production that is expected to eke out a meagre 0.2% m/m after flat-lining in February and dropping 0.4% in January, with Manufacturing Output seen up just 0.1% m/m after prior readings of -0.4% and -0.3%, implying a substantial drag on Q1 GDP. Aside from inventories (Wholesale data are due this week), the other key swing element for Q1 GDP will be Net Exports, with the February Trade Balance seen widening to $-53.5 Bln from a much a better than expected $-51.1 Bln in January, which would suggest a fairly robust contribution (0.5-0.7 ppt?) to GDP. Meanwhile the NAHB Housing Market Index is expected to recover further to 64 from 62, boosted by lower mortgage rates and slightly stronger wage growth.
Friday's very strong Chinese lending data implied that the economy has been given a ca 9.0% of GDP boost via this channel in Q1, even if many will questions the wisdom of re-leveraging the economy, when anecdotal reports suggest NPLs at China's banks have been rising sharply, and per se raising questions about how much of the jump in Total Social Financing (TSF) (Q1 40% y/y) will boost the economy, and how much is to shore up bank balance sheets, or put a lid on the rise in Unemployment. Eminently, it is more likely to show up in this week's Q1 GDP or monthly FAI, and more likely to give a boost in Q2 and Q3, with Q1 GDP seen slowing to 1.4% q/q from 1.5%, which would see the y/y rate dip to 6.3% from 6.4%. Fixed Asset Investment has been a relatively bright spot relative to the weak trends seen in Industrial Production, thanks in the main to a solid pace of Private Sector FAI offsetting what was for much of 2018 a flat trend in the Public Sector, which appears to have turned modestly higher at the start of 2019, and should be the key factor behind an anticipated push up to 6.3% y/y from 6.1%. Given the big boost to TSF, this will need to push up towards 10% y/y or more, if the lending boost is to be adjudged to be productive, rather than simply adding to an already cumbersome debt burden. Some modest improvements are expected for Retail Sales (8.3% y/y vs. 8.2%) and Industrial Production (5.6% y/y vs. 5.3%), but this would still leave both close to 16 and 10 year lows, respectively.
The Easter parliamentary recess and deadline extension should offer some respite from Brexit related news, and allow some time to focus on the economy. Labour market data are again expected to paint a reasonably robust picture, with Employment seen posting another solid 173K gain, and Average Weekly Earnings to hold around their cyclical highs at 3.5% y/y headline and 3.4% ex-Bonus. CPI is projected to rise 0.2% m/m, which would edge headline y/y up to target at 2.0% and core to 1.9%, with food and petrol likely to be the main drivers, and the key short-term question being how much the rise in the household energy price cap boosts CPI in Q2, but in all likelihood CPI looks likely to be around target for most of 2019, barring some very sharp FX or oil price moves. Retail Sales are forecast to dip 0.3% m/m, reversing most of February's +0.4%, though thanks to base effects from last year's 'beast from the East' this would push headline y/y sales to 4.6% from 4.0% and, depending on revisions, this would see the more reliable trend indicator that is the 3-mth/3-mth rate edge up to 0.8% q/q from 0.7%.
April 'flash' PMIs are also due, with the focus above all on the Euro area readings, which were above all in Manufacturing terms were very weak in March, even if national survey measures such as the Ifo suggested that this was yet another occasion on which the PMIs were probably offering a poor 'steer' on underlying trends. A very marginal rebound for French and German readings is expected, with a still very wide gulf in Services terms - Germany median 55.0 from 55.4, France 49.8 from 49.1. A similar story was seen in the US in March, with the ISM measures proving a good deal more resilient than PMIs, with the consensus for April looking for marginal moves to 52.8 Manufacturing and 55.0 Services.
- As much as there are a deluge of Fed and ECB speakers this week, it seems unlikely that they will offer any fresh insights into their respective policy outlooks, with the Fed very much 'patiently' on hold for at least the next 6 months, while ECB staff working groups engineer the details of TLTRO III.
- On the corporate earnings front, the consensus according to S&P's Factset is for Q1 earnings to post an overall fall of 4.3%, and as always been the case such low expectations facilitate plenty of 'beats' on EPS and revenues - indeed of the 6% of S&P500 companies which have reported, 83% have seen a positive EPS surprise and 59% a positive revenue surprise. However perhaps the key focal point should be on interest cover ratios, above all given the exponential rise in non-financial corporate debt over the past 10 years. As the attached chart highlights, current cover ratios are not as poor as they were in 2016, but are again deteriorating, and this despite low levels of yields and tight credit spreads, per se the vulnerability to even a modest rise in rates and/or spreads could prove very challenging, to say the least.
