(Bear with us folks, we’re a tad wordy with this installment, joining the rest of the media. My son tells me - keep it brief Dad. OK, OK, just this once!)
Background: The financial media delivers mostly filler and fluff; it’s good business for them apparently but serves no other purpose, leaving a void. This provides opportunity for a service like ours.
Most of us are not wired to screens all day long; most of us have other jobs but still don’t enjoy being ambushed by economic events. This includes small business owners who wonder just when to hire or fire, just when, if ever, that parking lot will fill; it includes active investors, those with a job but who manage their own funds. Our exercise at this firm is providing to these individuals by distilling the impact of economic events just ahead. Past years, through other vehicles, we’ve done a good job at that.
The Week Ahead
Every week we face a stream of US economic releases; they’re all featured in the media but they’re not all important. Some carry market-moving horsepower, some do not. That role changes with time, some shedding power, others acquiring it. It’s better to have a leg up, better to anticipate reaction, than react.
This week’s releases are focused on Manufacturing and Housing. We know manufacturing led the recovery; and we know with a weaker dollar and booming exports this sector continues to show vigor. Of the three releases dedicated to manufacturing we do not anticipate a surprise; they will cooperate. The two dedicated to housing will show some improvement, but this sector is in such sad shape, the markets will not be impressed.
With the world as tightly wound as it is, we also must monitor key offshore releases when we feel they will have an impact on our markets. The EU April CPI to be released May/16 is key. A print much through consensus will spark the view for an ECB lift, and sooner rather than later as especially Germany and France are booming. This will worry the US equity markets. The UK April CPI is to be released Tuesday, May/17. The UK will have a real problem with a print through expectations as the Bk of England will be more likely to lift, but this in the face of a struggling real sector (not the case with Germany or France). Won’t be pretty. With both these banks inclined to lift official rates, the Fed will be cornered, blamed even further with reckless policy at home.
Finally - the US debt ceiling. Most, including the Fed and Treasury are in hysterics and predict an end of the world if we don’t raise the ceiling. This is nonsense. Geithner prediction of a "double-dip recession" is simply dishonest. He knows better. Some clear thinkers, including the famed money manager Stanley Druckenmiller, hope for the benefit of all that we leave the ceiling well enough alone. From the WSJ report on an interview with Druckenmiller, "...he's willing to accept a temporary delay in the interest payments he's owed on his U.S. Treasury bonds—if the result is a Washington deal to restrain runaway entitlement costs." And this is the way institutional markets will view such an event, past the first 10 minutes of panic.
Robert Craven
Background: The financial media delivers mostly filler and fluff; it’s good business for them apparently but serves no other purpose, leaving a void. This provides opportunity for a service like ours.
Most of us are not wired to screens all day long; most of us have other jobs but still don’t enjoy being ambushed by economic events. This includes small business owners who wonder just when to hire or fire, just when, if ever, that parking lot will fill; it includes active investors, those with a job but who manage their own funds. Our exercise at this firm is providing to these individuals by distilling the impact of economic events just ahead. Past years, through other vehicles, we’ve done a good job at that.
The Week Ahead
Every week we face a stream of US economic releases; they’re all featured in the media but they’re not all important. Some carry market-moving horsepower, some do not. That role changes with time, some shedding power, others acquiring it. It’s better to have a leg up, better to anticipate reaction, than react.
This week’s releases are focused on Manufacturing and Housing. We know manufacturing led the recovery; and we know with a weaker dollar and booming exports this sector continues to show vigor. Of the three releases dedicated to manufacturing we do not anticipate a surprise; they will cooperate. The two dedicated to housing will show some improvement, but this sector is in such sad shape, the markets will not be impressed.
With the world as tightly wound as it is, we also must monitor key offshore releases when we feel they will have an impact on our markets. The EU April CPI to be released May/16 is key. A print much through consensus will spark the view for an ECB lift, and sooner rather than later as especially Germany and France are booming. This will worry the US equity markets. The UK April CPI is to be released Tuesday, May/17. The UK will have a real problem with a print through expectations as the Bk of England will be more likely to lift, but this in the face of a struggling real sector (not the case with Germany or France). Won’t be pretty. With both these banks inclined to lift official rates, the Fed will be cornered, blamed even further with reckless policy at home.
Finally - the US debt ceiling. Most, including the Fed and Treasury are in hysterics and predict an end of the world if we don’t raise the ceiling. This is nonsense. Geithner prediction of a "double-dip recession" is simply dishonest. He knows better. Some clear thinkers, including the famed money manager Stanley Druckenmiller, hope for the benefit of all that we leave the ceiling well enough alone. From the WSJ report on an interview with Druckenmiller, "...he's willing to accept a temporary delay in the interest payments he's owed on his U.S. Treasury bonds—if the result is a Washington deal to restrain runaway entitlement costs." And this is the way institutional markets will view such an event, past the first 10 minutes of panic.
Robert Craven
