U.S. Leading Economic Indicators Rose in June Conference Board says widespread growth doesn’t suggest any considerable slowdown in short term
The Conference Board Leading Economic Index rose 0.5% in June to 109.8. (…)
“The U.S. LEI increased in June, pointing to continuing solid growth in the U.S. economy,” said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board. “The widespread growth in leading indicators, with the exception of housing permits which declined once again, does not suggest any considerable growth slowdown in the short-term.”
The board’s coincident index, designed to reflect current economic conditions, rose 0.3% in June from the prior month. The lagging index also increased by 0.3%.
May was revised down from +0.2% to zero.
(From Bespoke:
Philadelphia Fed Factory Conditions Recover; Prices Surge
The Philadelphia Federal Reserve reported that its General Factory Sector Business Conditions Index rebounded to 25.7 during July and recovered a piece of its June decline to 19.9. The gain surpassed expectations for a reading of 21.0 in the Action Economics Forecast Survey. The figures are diffusion indexes where readings above zero indicate expansion. The percentage of firms reporting an improvement in business activity increased to 44.1%, the most since May of 2017. The number reporting a worsening increased modestly to 18.5%.
Haver Analytics constructs an ISM-Adjusted General Business Conditions Index. The figure eased slightly this month to 58.6 from 58.9 and remained the lowest level since February. During the last ten years, there has been a 67% correlation between the quarterly ISM-adjusted Philadelphia Fed Index and quarterly real GDP growth.
The new orders reading recovered half of its June decline with a rise to 31.4 from 17.9. (…) The delivery times index improved slightly, but continued to indicate nearly the quickest product delivery speeds since February. (…)
The prices paid index jumped to 62.9, the highest level of the economic expansion. The percent of respondents reporting higher prices paid rose also to 62.9, while none paid lower prices. The index of prices received increased to 36.3 and roughly equaled the 29-year high. (…)
Trump: Ready to Impose Tariffs on $500 Billion in Chinese Imports President Donald Trump said he is ready to impose tariffs on $500 billion in imports from China, an amount roughly equivalent to China’s total exports to the U.S.
U.S. to Toughen Foreign-Investment Reviews Amid Trade Fight With China Congress is poised to strengthen the procedures for vetting both foreign investments in the U.S. and overseas transactions involving cutting-edge American technology.
China Sends Yuan Lower by Most in Two Years After Trump Criticism Hours after President Donald Trump called out the slide in the yuan, China weakened its currency by the most in two years.
The People’s Bank of China set the dollar’s reference rate at 6.7671 yuan, guiding the Chinese currency 0.9% lower. (…) In the past month through Thursday’s close, it has fallen 5.3% against the dollar and 3.5% against a broader basket of its trading partners’ currencies, according to a Wind Info index.
“China, their currency is dropping like a rock,” Mr. Trump told CNBC on Thursday, as he also complained about European monetary policy. “Our currency is going up. I have to tell you, it puts us at a disadvantage.” (…)
Did you miss: TRUMPISM: Déjà-vu!
China seems to be preparing for the worst…dragging with it many EM currencies which have all been sliding since April:
(…) “The problem here is Xi. He doesn’t want to move, and they’ve offered the U.S. absolutely … no options regarding the issue of (intellectual property) theft and forced technology transfer,” Kudlow said in an interview with the news outlet.
Is this a message to Xi like “help us get out of this graciously?”
China factories eye moves to south-east Asia Risk of wider trade war prompts some manufacturers to accelerate diversification
Canada vows to fire back if U.S. imposes auto tariffs ‘Canada will be forced to respond in a proportional manner,’ Kirsten Hillman warned American officials at a Commerce Department hearing in Washington
Europe Warns of Retaliation Over U.S. Auto Tariffs
Henry Kissinger: ‘We are in a very, very grave period’
U.S. Grain Prices Crunched by Trade Fears Gluts of corn, wheat and other crops are finally easing after years of oversupply, but prices have yet to meaningfully rebound.
(…) Corn futures at the Chicago Board of Trade have fallen 15% from a late May peak. They traded last week at the lowest point in almost a year. Prices for wheat are down around 10% over a similar period and cotton has slid 7% from mid-June. (…)
Many of these crops are in the crosshairs of governments around the world looking to retaliate against U.S. duties on steel, aluminum and other products. China this month introduced tariffs on U.S. soybeans, corn, wheat and cotton. Mexico, one of the largest buyers of American grain, is already levying duties on U.S. goods including pork and cheese, and many expect corn could follow if there’s any new escalation. (…)
Peter Mooses, who trades cotton and other agricultural commodities at RJO Futures in Chicago, said that prices would be rising if not for the tariff tensions. They “can wipe out what we like to look at normally, which are fundamentals and charts,” he said.
Trump ‘Not Happy’ About Fed Interest Rate Increases President Donald Trump delivered a rare presidential critique of the Federal Reserve, saying he hoped the central bank would stop raising interest rates.
Merck to Limit Drug-Price Increases, Cut Some Prices Merck & Co. said Thursday it will cut U.S. list prices for several of its drugs including the hepatitis C treatment Zepatier, and the company pledged to limit future net price increases.
Flattening yield curves are now a global phenomenon. Canada is no exception.
And there is no QE nor QT in Canada that could be used to dismiss the apparent tightening. (Chart from The Daily Shot)
No End in Sight for Commodity Crash With Charts Sending Bear Signals
The Bloomberg Commodity Index has tumbled about 10 percent from a high in May amid mounting concerns that a trade war could derail global growth, curbing demand for everything from aluminum to soybeans. Even gold, a traditional haven asset, failed to catch a bid as the dollar strengthened and the Federal Reserve signaled more increases in borrowing costs this year, curbing the investment appeal of the non-interest-bearing metal. (…)
EARNINGS WATCH
69 companies in, 86% broad beat rate, +4.6% surprise factor. Q2e now +21.5% (+17.85 ex-Energy) from 20.7% July 1st.
Trailing earnings now $147.01 up 11.4% from full 2017 year EPS of $132.00.