New York Fed President William Dudley

11-20-2013 4-39-01 PMThis morning, the E-mini S&P opened at (1788). The day’s high price of (1794.25) was hit at 10:25 a.m. US/Eastern Time. The day’s low (1774.50) was hit at 3:10 p.m. US/Eastern. William Dudley the New York Fed President talked about the labor market at the press conference on regional and national economy in New York this morning. He mentioned that the Fed wants to bring the unemployment rate down as part of its dual mandate. The NY Fed president expects that economic growth will improve to a range of 2.5 percent to 3 percent in 2014. He expected inflation to remain below the Fed’s goal of 2 percent in 2014.

Eric Rosengren on Basill III

11-18-2013 4-41-48 PMThe opening price on the E-mini S&P today was (1798). The day’s high price was (1798.75) at 11:15 a.m. US/Eastern time. At 3:35 p.m. US/Eastern time, the low price of the day was (1784.75). Eric Rosengren, president of the Boston Federal Reserve Bank, came out in support for the narrower definition of capital under the global Basel III framework. In July, the Fed adopted the global Basel III rules in a commitment to draft tougher capital requirements for the largest banks. Basel III will force most banks to hold about three times as much top-quality capital as is required under existing rules, to reduce their risk and protect taxpayers from costly bailouts. The Federal Reserve Board will be required to undergo annual stress tests using three economic and financial market scenarios. Only a summary of the three official Fed scenarios would be made public. The rules would apply not only to banks but, also to all institutions with more than US$50 billion in assets. The Fed will begin implementing the Basel III framework in early 2014 and is expected to be fully implemented by 2019.

Treasury Budget Report

11-13-2013 4-40-34 PMThe E-mini S&P opened today at (1756.50). The day’s low price was hit within the first five minutes of opening at (1755.25). At 4:40 p.m. US/Eastern time the day’s high was reached at (1781.50). Each month, the U.S. Treasury releases a monthly report of the surplus or deficit of the federal government. Investors pay attention to changes in the budget balance of the annual fiscal year, as an indicator of budgetary trends. The deficit reduction continues into the first month of the government’s new fiscal year, with a $91.6 billion vs a deficit of $120.0 billion in October last year. That is a a 24 percent improvement. About $8 billion of the improvement is tied to calendar timing, meaning the actual year-on-year improvement is 17 percent. A gain in corporate income taxes are led by an 8 percent increase in receipts. The temporary government shutdown is perhaps to blame for outlays being down five percent. The year-on-year spending on defence is down 8 percent, with net interest expense down 18 percent.

Chain Store Sales

11-7-2013 5-40-53 PMToday, the opening price on the E-mini S&P was (1770.75). The day’s high price (1771.25) was hit at 9:50 a.m. US/Eastern time. The day’s low was (1742.25) at 3:55 p.m. US/Eastern time. Chain-store sales are mostly positive, but not by much. Compared to September, slightly more chains are reporting higher year-on-year sales rates in October, which appears to have gotten a lift from cold weather that boosted demand for seasonal goods. But the government shutdown was a negative, holding down spending in the first half of the month. The weekly chain-store reports have been mixed with slight monthly strength to weakness. Vehicle sales posted by manufacturers on last week’s calendar is another indication that October retail sales are flat. The October retail sales report was delayed slightly by last month’s government shutdown and will be posted on November 20.

Consumer Sentiment

oct25chart2Today’s opening price on the E-mini S&P was (1759.25). At 12:15 p.m. Eastern time there was a low of (1746.76). The day’s high (1755.75) was hit at 3:05 p.m. Eastern time. Consumer spirits in the month of October have not been upbeat. The consumer sentiment index dipped to 73.2 in the final reading for October, down from 75.2 at mid-month and down from 77.5 in final September. It appears that the decline has been building up steam, with the implied reading for the second half of the month in the low 70s which has been the lowest indication in two years. This recent weakness is centered in the expectations component, which fell to 62.5 vs 63.9 at mid-month and vs 67.8 in final September. Washington’s temporary resolution didn’t give any boost with the implied reading for the last two weeks in the low 60s and another two-year low for this report. The consumer’s assessment of current conditions is at 89.9 vs 92.8 at mid-month and vs 92.6 for final September. This latest reading is going in the wrong direction and is not a positive indication for October’s jobs market. Gas prices are coming down and are lowering inflation expectations, to 3.0 percent for final October vs 3.3 percent for final September. Today’s report suggests consumers are less than upbeat about the current jobs market and increasingly cautious about long-run prospects.