Global Macro Perspectives
From Metal Bulletin: Quarterly, spot or swap — which iron ore contract to choose? Tom Albanese’s admission that Rio Tinto may abandon quarterly iron ore pricing, should the majority of steel mills default to the spot market, could benefit the emerging market for over-the-counter iron ore swaps. Macquarie Research believes third quarter contract prices will be […]
On a completely no news and no economic data day, market tried to stage some kind of a rebound and if we judge by the current situation failed. That tells a lot… Chart 1. S&P 500
Number of oil drilling rigs rose for 4 for the week ending July 2, 2010; Number of natural gas drilling rigs rose for 2 rigs in the same time frame. Chart 1. Baker Hughes U.S. Rig Count Change Chart 2. Baker Hughes Weekly U.S. Rig Count Chart 3. Baker Hughes Monthly World Rig Count
Important U.S. earnings this week: Monday: – Tuesday: Stanley (SXE) Wednesday: Family Dollar Stores (FDO), WD-40 Company (WDFC) Thursday: International Speedway (ISCA), Penford (PENX), Helen of Troy (HELE), A. Schulman (SHLM) Friday: – Important U.S. economic data: Monday: US Holiday (Independence Day) All Markets Closed Tuesday: ISM Non-Manufacturing Index Wednesday: MBA Purchase Applications, ICSC-Goldman Store Sales, […]
Baltic dry index fell 8.8% last week; The hardest hit were Panamaxes with 19.6% loss; Supramaxes lost 6.0% ; Handysizes and Capesizes lost 5.4% and 3.3% . It looks like the Baltic Dry Index was not bottoming last week after all. Panamaxes which were more stable sector than the Capsize sector played catchup and collapsed. That was not […]
Baltic Dirty Tanker Index fell 9.4%; Baltic Clean Tanker Index rose 8.0%. Dirty rates falling on abundant supply (multiple ships competing for a single cargo), clean rates rebounding on increased hauling of petrochemical cargoes. The drop in demand for crude oil is another factor confirming economic slowdown. Chart 1. Baltic Tanker Indexes Relative Performance Chart 2. Baltic Tanker Indexes
Almost unchanged from June. Equities Only extremely favorable economic data could change the negative trend established. This is highly unlikely. So I would say we will soon see S&P 500 at 875. On a macro level, the stimulus is wearing off, politicians and central bankers are not ready to continue with loose fiscal an monetary policies, just the opposite, austerity is the game. […]
A reading of -10.% was historically 100% correct predictor of a recession. At todays level the track record is, if my memory serves right, 7 recession of 8 times reading this low. Chart 1. ECRI Weekly Leading Index
Nonfarm payrolls fell 125.000 in June. The consensus was at -125.000, revised reading for May was an increase of 433.000. The unemployment was reported at 9.5% vs prior reading of 9.7% and consensus of 9.8%. Nothing special in the report, meaningful new hiring nowhere to be found. Chart 1. Nonfarm Payrolls & Unemployment Rate
Working gas in storage rose 60 Bcf from previous week. Supply weakening. This could get very interesting soon. Chart 1. Natural Gas Futures Chart 2. Working Gas in Underground Storage Compared with 5 Year Average Chart 3. Natural Gas Futures Curve
In May, U.S. construction spending fell 0.2% MoM vs. -0.5% consensus and 2.7% rise in April. On a year level we are at -8.0%. Economic recovery without construction recovering is not the real sustainable recovery. Chart 1. U.S. Construction Spending
U.S. total motor vehicle sales for June fell 0.56 million units to 11.08 million SAAR. Chart 1. U.S. Motor Vehicle Sales
I’ll stick with my guess that todays non-farm payrolls will disappoint. Charts 1. Monster Employment Index
Job losses kind of flat in the last three months. Chart 1. Challenger Job-Cut Report
Pending home sales index fell 30.0% in May vs. rise of 6% in April. Again first home-buyer tax credit effect… Chart 1. Pending Home Sales Index