Rendered on Wed, 18 Jan 2017 19:30:08 GMT
Next udpate: Wed, 18 Jan 2017 20:00:00 GMT
Rendered on Wed, 18 Jan 2017 19:30:08 GMT
Next udpate: Wed, 18 Jan 2017 20:00:00 GMT
via Motley Fool Headlines by on Wed, 18 Jan 2017 19:22:00 GMTRealty Income just announced a 6% year-over-year increase in its monthly dividends.
The Fed's latest beige book, perhaps the most boring report released by the Federal Reserve, found 10 of the 12 Fed districts growing at the now ubiquitous "modest or moderate pace" with Cleveland growing only slightly and New York reporting little change for the fourth period in a row. However, despite stagnant growth, margin pressures are building as input prices are rising faster than final goods prices.
The good news for US workers is that according to the Fed, labor market conditions remained tight in the majority of the districts. Employment growth ranged from slight to moderate and most Districts indicated that wages increased modestly. A couple of Districts mentioned layoffs, but even in those Districts, as in other regions, most responding firms were said to have added employment, on net. District reports cited widespread difficulties in finding workers for skilled positions; several also noted problems recruiting for less-killed jobs. Wages in some Districts were pushed up a bit by increases in the states’ minimum wages and most Districts said wage pressures had increased. The Boston, Philadelphia, Cleveland and Atlanta Fed districts reported further tightening in their labor markets over the period, with wage pressures likely to rise and the pace of hiring to hold steady or increase.
Manufacturing activity appeared to be robust at the end of 2016 into the new year.
"Manufacturers in most Districts reported increased sales with several citing turnaround versus earlier in 2016," the Beige Book said. However, manufacturing activity in Cleveland remained steady due to a seasonal decline in new orders. On the other hand, manufacturers in Cleveland reported a break in layoffs."
Software and IT services firms in Boston reported watching the resurging dollar to see if it affects their clients' interests in the manufacturing sector. Dallas, St. Louis and San Francisco manufacturing sectors echoed these concerns, though the Boston Fed reported foreign investment in commercial real estate in the district unaffected by an appreciating dollar.
The bad news is that any increase in wages is being offset by rising prices as pricing pressures intensified somewhat since the last report. Eight out of twelve Districts saw modest price increases and the remainder experienced slight increases, or flat prices in the case of the Atlanta District. Increases in input costs were more widespread than increases in final goods prices. Cost increases were reported for coal, natural gas, and selected building and manufacturing materials. Retailers’ selling prices were mixed, but on balance were flat or down amidst competitive discounting. Prices of most agricultural commodities stayed flat at very low levels. Home prices were stable or up modestly. Businesses in several districts reportedly expect further modest increases in input costs and selling prices in 2017.
And while the number of mentions of "uncertain" declined from 15 in November, to only 6 in Januar, concerns remains over policy changes in the incoming administration.
The Fed also said most districts said non-auto retail sales expanded, but that several districts noted holiday sales were disappointing. New York, Cleveland, Minneapolis, and Dallas reported disappointing or slugglish consumer spending or retail spending through November and December.
But the most troubling news revolves around the threat to corporate margins because despite the "modest, moderate" growth, margin pressures were said to be building as input prices rose faster than final goods prices. Cost increases were reported for coal, natural gas, and selected building and manufacturing materials. At the same time, retailers’ selling prices were mixed, but on balance were flat or down amidst competitive discounting.
We wonder how long before the Trumpflation rally has some variant of "stag" before it?
One of the primary themes that we've been repeating is that 2017 is going to be a wildly unpredictable year. To that end, today we begin what might be a wildly unpredictable week. Buckle up.
So, let's see. What are some of the primary tenets of the heavily-promoted "Generally Accepted Narrative"?
Let's check in on these as we've now reached the second half of January.
"Major US deficit spending will promote economic growth. This economic growth will allow The Fed to hike the Fed Funds rate 3-4 times." -- Well, we'll see about this. There have not been any specific proposals put forth yet by Trump and some of the economic and confidence numbers are already beginning to roll over. Here's today's economic datapoint for your consideration: http://www.zerohedge.com/news/2017-01-17/trumphoria-fades-empire-fed-manufacturing-survey-signals-more-stagflation And, regarding The Fed, let's not forget these two charts:
"Rates on the long end will rise, too, as "the bond bubble bursts". Well, this isn't working out so well for the Narrative Pushers. As we've been observing, long rates are moving lower as bonds are bought, not sold, and the so-called "bond bubble" is alive and well. As you can see below, since the first of the year, the rate of the 30-year Long Bond has fallen from 3.11% to 2.93% and now threatens a complete reversal back to where it was before the US election. Yes, we will continue to watch this very closely in the weeks ahead.
"All of this growth and higher rates will prompt a huge rally in the dollar." And here is where The Narrative Pushers are really failing. The conventional wisdom holds that the POSX is going to 110+ as the euro and yen both fade under the weight of their own issues. Well, not so fast my friend. As you can see below, The Pig has already fallen rather dramatically in January and, if it falls back under 100, the Pig bulls are really going to have to start questioning themselves.
"And the US stock market will charge toward 25,000 on the Dow." Hmmm. Not so much. Maybe Bob Pissonme and the rest of the CNBS cheerleaders should concentrate on getting to 20,000 before focusing upon 25,000? As you can see below, the "stock market" has been stuck now for over a month.
We see The Generally Accepted Narrative failing as it pertains to Comex Digital Gold and Silver, too. How many forecasts did you read in December that called for sub-$1000 gold? How many supposed analysts and wave-counters were projecting $12 or $8 silver? Instead, that ain't working out so well. And why? Because the analysts and technicians all fail to understand that there is no "market" for "gold". Instead, we have HFT driving funds into and out of Comex Digital Gold exposure, primarily following changes to the USDJPY. Who cares of we're in subcycle F of major downwave 3? None of that mumbo-jumbo makes a rat's ass bit of difference if the USDJPY is indeed headed back toward 100.
So be of good cheer but expect a wildly unpredictable 2017. As we've seen so far, the predicted market moves of The Generally Accepted Narrative for 2017 are far from being a fait accompli.
via Motley Fool Headlines by on Wed, 18 Jan 2017 19:12:00 GMTThis healthcare REIT continues to improve, and its market is growing.
Via Soren K. at MarketSlant| We noticed yesterday that Anthony Scaramucci's Davos behavior was that of a child new to getting attention. Prior to Trump he was quick to lead with his humble Long-Island "regular guy" story when among evil elitists. So yesterday we were confused. Is Scaramucci (nicknamed Mooch) just being a bit too euphoric in his spotlight moment? Or was he really just itching to be a member of the club and dying to drop the "normal guy" schtick? We don't know, but he does seem to be harming the populist image on which Trump ran.
But Mooch does not seem to be a good fit for Trump.
As Matt Levine noted today: Anthony Scaramucci is a fund-of-funds marketer who has achieved some public notoriety for complaining that Barack Obama was "whacking at the Wall Street piñata" and and for comparing the Department of Labor's fiduciary rule to slavery. So of course he has a new job doing public relations for Donald Trump at Davos, which I think might be the absolute worst job/employer/location combination I can imagine? He seems happy though: “This is my 10th year here, but my first year here with a food taster,” Mr. Scaramucci quipped at the beginning of a conference session Tuesday afternoon nominally on the “Outlook for the United States” but really about President-elect Trump—and a little bit about Anthony Scaramucci. Full editorial here
For example, Scaramucci made a very non-populist statement while with his new tasting pals.
(FT) Donald Trump is committed to globalisation. "Elite in Europe and US have misunderstood trade stance"
So we agree with Matt Levine on the surface of it. And that probably means Scaramucci is a red herring for Trump policy ideas. Mooch is Trump's cognitive dissonance outsourced. If people like what he says? Trump takes credit. They don't, he's fired.
— Rudolf E. Havenstein (@RudyHavenstein) January 18, 2017
Our guess is Scaramucci is first to go if Trump loses his balance between public face and private bettors. And that makes Scarmucci, who is no dummy, adept in the ways of the financial/ political the revolving door. His exit strategy was cemented at Davos we'd bet.
We see Mooch as a guy who may be Trump's opposite in some ways but shares that quality of having a secret need to be liked by the elites. Trump rails at those who would not acknowledge his skills or accept him into their white-shoe club. Scaramucci put his head down and did all he could to be included, but always careful to lead with the "local guy makes good" schtick. The outsider who desires acceptance and status above all.
2 Days to Trump-ageddon. Good Luck
In what is certain to be an epic lovefest that would put even Hollywood's mushiest romantic comedy to shame, President Obama will take questions from the press in the White House briefing room for the last time at 2:15 EST today...or whenever he decides to show up.
According to comments from current White House Press Secretary Josh Earnest, Obama will use his last press conference to, once again, blast the incoming Trump administration's "restrictions on the media" while encouraging the triggered snowflakes of America's leftist networks to "rise to the occasion and adapt to the changing environment." Per Politico:
In an interview with POLITICO, White House press secretary Josh Earnest said Obama will use his final news conference to highlight his concerns about the restrictions on the media that the president-elect put in place during his campaign and transition, and what it might mean for his administration.
“The media environment is challenging, and the news media and the journalists who cover the White House will be challenged to rise to the occasion and adapt to the changing environment,” said Earnest, in an interview ahead of Wednesday. “I know the president is interested in showing his support for their efforts to do that.”
Of course, this closing message from Obama is particularly rich in light of his relentless war against whistleblowers over the past 8 years and repeated attempts to subpoena journalists' phone records. Even CNN's Jake Tapper was forced to admit that Obama's pursuit of journalists was unprecedented...
“The Obama administration has used the Espionage Act to go after whistleblowers who leaked to journalists…more than all previous administrations combined."
...while the Washington Post, back in 2013 called the Obama administration's "efforts to control information" the most aggressive "since the Nixon administration."
“The [Obama] administration’s war on leaks and other efforts to control information are the most aggressive I’ve seen since the Nixon administration, when I was one of the editors involved in The Washington Post’s investigation of Watergate.”
And while Obama will undoubtedly cite the recent tussle between Trump and CNN's Jim Acosta as a sign of an aggressive stance that will be taken toward the media by the Trump administration, we would have loved to have seen how Obama would have reacted to a "journalist" calling him "inappropriate" during a press conference.
Of course, in the end, Obama's parting coziness with the press will only serve to further boost Trump's approval ratings.