The Banking and Strategy Initiative

Chillin' out till it needs to be funded

US Morning report: Ergo, this rally celebrates the recession’s stunted velocity, Bob Diamond’s on the sled going down

Auto sales are expected to make a mark in a couple of hours (Ford, GM sales up 7%, Nissan and Chrysler also report increase) and as production data falling below 50 becomes a moot point, a slew of global reports are likely being ignored, including the UK construction spending downtick of 5 points from 53 to 48. RBA already started the big ball rolling and wiith the AUD appreciating all day markets are likely cheerful despite data like a 4.3% contraction in Brazilian output now after more than 4% in rate cuts from the peak of 12.5% a Euro PPI falling 0.5% despite expectations of a rise, British Money Supply contracting and Mortgage Lending down 40% at 600M. More germaine to the markets could have been air pockets surviving the liquidity damage including BoE Consumer Credit rising by 700M and Net Lending to Individuals up 1,300 M GBP (Pound Sterling)

But then the retail sales report from Goldman already sounded the foghorns for the Titanic and is down to a 1.4% growth after trying to keep a year on year pace of 2.5% – 3% for some months now. The Dollar is however holding as the Euro is weaker and the AUD and the Yen are lesser mortals to the Dollar even as they rise. Monetary easing does not seem likely though retail spending donticks hould bring it nearer to such stimulus as US Net exports are the reason many national Economies and households are surviving this “apocalypse” the Redbook is already looking like it ill be tipping over and so the markets may yet start another day with 100-150 points lower on the DJIA after the brave 12800 earlier in the week

Happy 4th of July never was a time for caring for economic details but lower spending in June throughout means <intentionally blank> !

China’s Services PMI was strong at 56.7 which is an improvement on the last 2-3 months which means the US trade number will also likely be strong, and all’s well till its time for the Jobs report when the week began with an ISM score of 47 for a sector worth one sixth of the GDP. The markets will likely not care for more production data from here, but first falling consumer confidence must do the rope trick

Also next month Facebook could become part of the NASDAQ 100 and Deal volumes could pick up in the second half of 2012 after falling 20-30% in H1

Barclays as we always felt seems to be out spinning as the ploy to get Chair to resign did not let Diamond off the hook for PPI  and more penalties. More banks look forward to ugly settlements to get rid of LIBOR Gate as the IIF that negotiates on part of banks goes from traders to other traders ith a better balance sheet at HSBC and Deutsche Bank and Barclays lick their chops in a lonely corner, though Douglas Flint’s leadership is more like EU Commish Rompuy fighting the windmills than Diamond speaking to Parliament on the ills of being Barclays Capital. Barclays has also unified its banking and Investment Advisory brands as Barclays with no official space for Barclays Capital


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