The Banking and Strategy Initiative

Chillin' out till it needs to be funded

It’s Monday Again: A slow week for sure, easier to bring smiles back with good economic data? (The week ahead: September 30 – October 04, 2013 — US Economy & Markets)

English: President Barack Obama's signature on...

English: President Barack Obama’s signature on the health insurance reform bill at the White House, March 23, 2010. The President signed the bill with 22 different pens. (Photo credit: Wikipedia)

Consumers have already shutout most consumption, showing on data series since the last three months and not yet improving despite Oil prices falling off a precipice after the Syria blackout turned to an open dialogue.

However, US Consumers could come back to politicians with the question – Where is the real America ? all over again as Monday morning blues snake through a disappointing China PMI despite the Flash promise of last week and the Aussie falling to lowest 92.5 cents of the Dollar almost counted as  more significant than the Budget and debt ceiling tete-a-tetes in and outside the Congress, Obamacare still intact and still mostly on paper with doubts over Healthcare exchanges and suitable products carrying too much in deductibles

Fortunately, Apple is still cutting more Foxconn out of its phone and giving it to competitors even as Google, GE and Ford are expanding US operations bringing more than 10,000 jobs each to mainland USA. Companies like Intel, Cannon, Dupont and Caterpillar also took innovation back to the drawing board, closing Chinese manufacturing/factories for jobs back home.

Berloscuni took the sails out of European markets but US investors have already put in $65 Bln into European Equities ( Goldman Sachs report, Marketwatch). Even as the Italian Hef pulled out his ministers from the Italian coalition, the Euro pulled away back up to 1.35 levels at the start of the week. Slimming Mortgage portfolios and a FHFA bailout however still highlight the year on year recovery of over 12% that continues each month in Housing and Auto loans have been looking up of late .

If you look at the Z1 Household Wealth report ( Fed Balance Sheet) of last week, the numbers have seen a huge increase since 2007 and point to an increasing leverage hitting the US consumers again than any prudence holding them back from their pat down payments for the economic recovery as real income fails to grow. Well even if one in 5 jobs from the 6 mln lost to China over the last decade come back things could be different

Brands are also changing their ways as the post Crisis meandering seems to leave everyone at a loss, Coke showing in a poor third, almost $20 bln behind 5c and 5s rich Apple that hit Chinese stores at launch this September and Google came in second. McDonald, Samsung and Toyota could only manage 7th, 8th and 10th places remaining below $50 Bln in brand value.

Chicago PMI on the other hand, joined the improved Chicago national activity index of the last two months as it looked up to 55.7 Now known as the Business Barometer survey but restricted to the Mid west unlike CFNAI, the Chicago PMI is still nose down on new jobs though Production and New Orders data . Auto sales still likely to cross 15 mln run rate this month. The ISM manufacturing data for September will be a rosy picture this week but the good news would come from the Non Manufacturing data on Thursday, close on the heels of PMI data for the month from Europe and  both likely holding a better continuing news flow from Durable Orders and Trade data later. Inventories and Prices paid also softened in the MidWest but the data is much better than the 3 year low in April and Order Backlogs show improvement.

Bank Results Season ticks off everyone next Thursday even as US Retail sits expectantly on top of a potentially positive Holiday season. KKR in the meantime is already diversifying on news of Carried interest woes for REITs and PE in the USA with a bet on increased consumption in Shanghai, netting a 10% stake in appliance maker Qingdao Haier

The Dow could well scratch 15000 marks before the news of the Taper actually turns positive for the markets and markets find direction again untethered by the incessant  bulldozing or even bowdlerising ( aka shutout) of market debate because of the debt ceiling topics

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