Consumer Confidence has fallen for the seventh month in a row as accelerating inflation erodes household buying power, figures suggest. Confidence fell to its lowest point last month since August 2020, according to analysis by YouGov and the Centre for Economic and Business Research. Households reported that their finances worsened in the past month, while their outlook to the next 12 months also deteriorated. However, feelings among homeowners were more of a mixed bag – with the survey’s house value index for the past month increasing but outlook declining. Emma McInnes, global head of financial services at YouGov, said: “The current figure sits at its lowest point since August 2020, amidst the backdrop of growing concern around the cost-of-living crisis. “It is notable to see an uptick in confidence around house prices and job security, but these were offset by continued sharp decline in confidence around household finances.” Josie Dent, managing economist at Cebr, said: “June saw a further fall in the YouGov/Cebr Consumer Confidence Index, driven by the continued acceleration in inflation, which has eroded household buying power. “This is leaving many people with less money left over at the end of each month, and even pushing some to cut back on food spending, use their savings or take on debt to make ends meet.” NN: The worst is yet to come. Which means the best of times for us. I am afraid this coming market and economy will be the worst depression ever, Friday we did pretty good trading. We were booking losses as the incredible volume and Hugh billion dollar orders from the investment banks devastated.the market. I have never seen such volatile markets. I know what i am doing and i have to tell you a 500 point swing on one print is something i have never seen before. Impossible for the majority of people to trade successfully. The secret is to get a bead on the direction and get in front of them. You must be reallyfast on your feet. Traders books have been devastated and the street is not making any money.
Copper Prices Plummet To Lowest Levels Since 2020
Copper price action continues to show massive bear trends and signals further declines. The continuous breakdown of short-term trading ranges fosters a volatile market. This leaves industrial buyers at risk of inventory value fluctuations. Copper prices peaked in March, muted demand from China triggered the beginning of the price downtrend. The impact of China’s lockdowns started taking effect during the second half of April. The price descent continued following a brief rebound. However, it failed to overtake its previous high as Shanghai emerged from lockdowns. However, bearish focus shifted growing fears of an economic recession in the West. China’s recovery has, thus far, failed to reverse the downward momentum. However, any backtracking could accelerate the current free fall in prices that now sit nearly 30% beneath their March 7 peak. According to a recent Reuters report, China will create a state infrastructure investment fund totaling nearly $75 billion in Q3. Its latest moves follow President Xi’s late-April commitment for an “all-out” strengthening of infrastructure construction. While projects will likely be expansive, Xi emphasized “sci-tech” infrastructure. China looks toward building its digital economy as well. To fund its ambitions, China’s cabinet announced it would raise the credit quota for policy banks by $120 billion. It will also issue nearly $45 billion in financial bonds. While China’s stimulus measures extend beyond infrastructure, infrastructure spending appears as the priority. NN: I can tell you for a fact that lithium and copper are the metals to watch. Lithium goes into electric car batteries and cooper makes the motors go round. The lefties will cram electric transportation vehicles down the public’s throats. I am not worried i have my 6 average price 3000 euros.And the metals prices like all commodities are crashing… Inflation is over…
Inflation has peeked… Its the massive deflation a panic FED has created
12-month headline inflation peaks at 9.1%, core slows further to 5.9%.
Headline inflation in the backward looking CPI has peak at 9.1%. The more important Core CPI inflation, in contrast, has peaked in March at 6.5% and has fallen further in June down to 5.9% in the current print. Funny what the forget to tell you. We expect the monthly pace of inflation to slow notably over the remainder of the year. July and August CPIs should see core inflation falling to under 5%. The market is also ignoring the biggest drop in M2 money supply i have ever seen.
The Fed has slammed on the breaks and they are in panic mode. If they raise rates 100 bases points later on this month this will keep the tradition alive of over stimulation and then panicking and over tightening. Au contraire Inflation is not the crises…. Its the massive deflation they are creating as they panic. And we do deflation…..
Oil prices fall as recession woes accelerate….. US crude inventories up by 3.3 million barrels – EIA
P rices of oil futures fell on Thursday as recession fears continued to mount, prompted by the latest report on the United States inflation. The elevated figures could potentially lead to more aggressive rate hikes from the Federal Reserve, which would, in turn, affect the growth of the global economy and tamp down the demand for crude. West Texas Intermediate (WTI) for deliveries in August declined 1.42% to $95.14 per barrel at 4:31 am ET, while Brent for September settlements lost 0.95%, selling for $98.54 per barrel a minute later.
US crude inventories up by 3.3 million barrels – EIA
Commercial crude oil inventories in the United States, which are not taking into account those in the Strategic Petroleum Reserve, were up by 3.3 million to 427.1 million barrels in the week ending July 8, the Energy Information Administration (EIA) revealed in its report published on Wednesday. US crude oil refinery inputs averaged 16.6 million barrels per day, improving by 202,000 barrels per day from the average recorded the prior week. Refineries operated at 94.9% of their capacity, while gasoline production dropped, averaging 8.9 million barrels per day. Imports of crude oil in the US averaged 6.7 million barrels per day, falling by 0.2 million barrels per day compared to the previous week. Total commercial petroleum inventories increased by 21.7 million barrels. NN: As we previously reported crude oil and gasoline prices has peeked. Currently we are targeting crude oil in the Eighties. Biden would not be going to Saudi to kiss princess ass unless he had a deal to get them to increase production…… And yes Dorthy inflation has peeked… And yes the Fed is about to over-tighten…. Like they always do.
Fake June CPI Report “Leaked” market dropped hard then recovered
https://youtu.be/i5SDm4I7Jko
US bls Says “Leaked” 10.2% CPI Report Was Fake
US Department of Labor Says “Leaked” 10.2% CPI Report Was Fake. The US CPI report will be the main highlight tomorrow, and will also serve as what JPMorgan calls a “market clearing event.” While the BBG median consensus expects +8.8% YoY vs. +8.6% in June, Goldman and JPM expect 8.88% and 8.7% respectively, with whisper numbers at, or above, 9.0% One bit of “good” news, according to Deutsche Bank, is that yesterday the NY Fed’s long-run consumer inflation expectations series showed a decent dip and helped encourage a big rally in bonds as the tug of war in the asset class continues. Of course, much of this early optimism was reversed by today’s fake CPI report “leak” which emerged around noon and signaled a 10.2% Y/Y CPI print, but was only noticed by traders and algos in the last hour of trading, sending stocks tumbling to session lows driven by a huge sell program in a very liquid market… So paranoid is the market, and so gullible about “bad news” tomorrow, that none other than the US government’s Bureau of Labor Statistics had to ease traders’ nerves, saying that the “leaked” report was indeed a forgery.
“We are aware of a fake version of the June 2022 Consumer Price Index news release that is being circulated online,” BLS spokesperson Cody Parkinson told Bloomberg said in an emailed statement.
Which of course is not to say that tomorrow’s CPI print won’t be 10.2%, although that would be especially cruel. As a reminder, a on Monday we showed why a case for a sharply higher 9% headline CPI print tomorrow is possible, but that most likely will also be the peak as numbers grind lower afterwards, at least until gasoline prices soar again.
In any case, back to the forgery, none other than JPMorgan trader Andrew Tyler wrote in his EOD note that “several clients have pointed to a leaked CPI number that is circulating around social media. I have been told it is an ugly number with some suggesting that it will print above 10%. Other media sites now saying the early release is a fake.” With that in mind, Tyler says to keep an eye on the energy component as we have seen a material fall in gasoline prices that will not be fully incorporated into Headline CPI, something which the White House has repeatedly said in the past two days (if forgetting that the only reason energy prices have plunged is because of the coming Biden recession). In any case, below is a chart of gasoline with highlights for May and June price performance. Separately, Rates vol and Equity vol have divergence recently “so beware that CPI could drive both higher.”
- JPM chief economist Michael Feroli thinks CPI prints 1.1% MoM and 8.7% YoY but given the labor market data from last week, the Fed is locked in to 75bps for July. He sees Core CPI rising 0.45%, a softer number than recent prints.
- Private Payrolls are now above February 2020 levels. JOLTS job openings fell MoM but there are approximately 1.9x job openings per each unemployed person, this compares to ~1.2x in Feb 2020.
- The Nat’l Federation of Independent Business reports that ~50% of small businesses had job openings in June with 48% saying they hiked compensation (BBG).
- Feroli updated his Fed forecast where he sees the Fed ending its hikes in December with a 3.25% – 3.50% range which means that the Fed would hike 75bps in July, 50bps in September, and then 25bps in both November and December with no further hikes in 2023.
- Many conversations surround peak inflation following the publication of the below chart from our inflation Phoebe White (full note is here). Longer-term inflation expectations have essentially round-tripped the move following the beginning of the RU/UKR conflict.
And while JPMorgan is slightly on the dovish side of the 8.8% consensus, Goldman is on the other side, with the bank today publishing a note (available to pro subs), in which it says that it expects a 1.15% increase in headline CPI in June, slightly above consensus expectations for a 1.1% increase and corresponding to a year-over-year rate of 8.88% (not 8.87% or 8.89%). On the other hand, Goldman sees slightly easier core prints with a 0.50% increase in June core CPI, below consensus expectations for a 0.6% increase and corresponding to a 0.3pp decline in the year-over-year rate to 5.71%.
Goldman highlights four key component-level trends for the June report:
1. Shelter. The most important category to watch in Wednesday’s report is the large and persistent shelter component (as we predicted it would be last summer when the macro-tourists, perma-idiots and other central bankers were still saying inflation would be transitory), which accelerated unexpectedly to its fastest monthly pace since 1991 in May. Goldman expects sequentially slower shelter inflation in the June report (rent +0.57% and OER 0.50%), reflecting slowing gains in the alternative rent measures that make up our shelter tracker and an OER drag from imputed utilities.
2. Nondurable goods or the bullwhip effect. Following the product shortages of 2021, inventories have now substantially overshot their pre-pandemic levels at large retailers like Target and Walmart. Some companies have already said that they anticipate cutting prices in coming months in order to reduce inventory stocks to more normal levels, and Goldman expects to see a 1% drop in apparel prices in June.
3. Auto and parts. On the other side, expect further increases in auto prices (new +1.4%, used +1.1%, parts +1.5%) due to continued global supply disruptions, most notably the Ukraine-Russia war and Communist China lockdowns. US automakers have been more optimistic about raising production later this year, which should eventually lead to more moderate growth in new car prices.
4. Health care. The CPI’s health insurance component closely tracks annual changes in insurer profitability. Goldman forecasted the sharp acceleration seen this year last fall based on the insurer data, and expects this small category to continue to make an outsized contribution until new insurer data are incorporated in October, at which point it is likely to turn quite negative for the next year. Goldman forecasts a +0.49% (mom sa) increase in medical services prices this month.
Going forward, Goldman expects monthly core CPI inflation to remain strong in late summer, picking back up to 0.53% in September, before eventually falling to 0.30% by December 2022. Absent a major recession (or depression), the bank forecasts year-on-year core CPI inflation of 5.5% in December 2022, 2.4% in December 2023, and 2.6% in December 2024. The forecast reflects a negative swing in health insurance prices and a larger slowdown in goods than in services inflation next year.
NN: To be clear here i am placing a big bet that a studied analysis of this report will show inflation on the headline number soared… But inside the report we will see inflation has peeked.
Fed Official: Mixed Signals Mean We ‘Could Talk Ourselves Into a Recession’
Thomas Barkin, president of the Richmond Federal Reserve, says it’s hard to get a true read on the state of the U.S. economy because of conflicting signals. “The strength of consumption and the labor market might be saying ‘hold’ or even ‘raise rates,’” Barkin said at an economic outlook conference in Baltimore Tuesday. But “the softness of investment, inflation and the bond market might be saying ‘lower rates.’” The Federal Open Market Committee voted last week to lower the Fed’s key benchmark interest rate for the third time this year to a range between 1.5% and 1.75%. But it also made it clear that it does not expect another rate cut to occur this year unless there is material evidence showing the U.S. economy is deteriorating. Barkin participates in the Fed’s policy discussions, but he can’t vote on monetary policy. Uncertainties surrounding the trade war between the U.S. and China, which has been going on for 16 months now, are part of the reason for the recent cuts. Barkin is keeping a close eye on the effect lower interest rates have on fighting the side effects of the trade tiff.
“I don’t discount the idea that we could talk ourselves into a recession — particularly if the uncertainty begins to affect consumer confidence and spending,” he said.
Some sectors of the economy seem just fine, though. The monthly jobs report for October that came out Friday beat expectations with 128,000 jobs added, according to Labor Department data. This quelled some fears that a recent slump in manufacturing and business investment would leak into other areas of the economy. Barkin thinks a positive development in the U.S.-China trade war would be an even bigger boost to the economic expansion that is now over a decade long because it would “build business confidence, build consumer confidence and lead to increased investment, spending and hiring.” “American businesses are creative,” Barkin said. “Give them the rules—almost any set of rules — and they will make things happen.” NN: We are seeing violent swings in the stock market indices. On the biggest volume i have ever seen. World currencies (except for the Russian Ruble ) are collapsing against the dollar. GOLD the “inflation hedge” is down $400 dollars from its March peek. It’s settled business gold is NOT a hedge against inflation. The yeild cureve is all pover the map and the Wall Street pudits are losing trillion of dollars in what is suppoe to be safe secure retierment savins that was entrusted to them. I am a season balls to the wall lottery ticket speculator is having a tough time. The secret i know is that inflation has peeked and the FED is about to over tighten. They have done it every time. Think back to 20% interest rate under Volcker. Oil is seeing huge drops down 30% off its recent high. Gasoline prices are seeing its fastest drop ever. Commodity prices from lumber to cooper to grains are plunging in price. If i am right and happen to GUESS lucky, understanding the hysteria in the market, could be very very lucrative. Trading against the street (which i have done for a lifetime) is very dangerous and IF we guess wrong (most likely scenario) we will take a wipe out
US oil inventories up by 4.8M barrels….. OPEC keeps oil demand outlook unchanged at 3.4M bpd
Crude oil inventories in the United States rose by 4.762 million barrels in the week ending July 8, private data from the American Petroleum Institute (API) reportedly showed on Tuesday. The stocks of distillates gained 3.262 million barrels. On the other hand, the supply of gasoline increased by 2.927 million barrels. West Texas Intermediate (WTI) for deliveries in August fell by 0.21% at 4:23 pm ET to sell for $95.71 per barrel. Two minutes later, Brent for inventories in September decreased by 0.34% to go for $99.27 per barrel. NN: The log jam has been broken…. $125 oil has become $95 oil.
RIYADH: The Organization of the Petroleum Exporting Countries has forecast that world oil demand will rise further next year, but at a slightly slower rate than in 2022, with consumption supported by better containment of the COVID-19 pandemic and still-robust global economic growth. In a monthly report, the OPEC said it expects world oil demand to rise by 2.7 million barrels per day in 2023. This year’s growth forecast was left unchanged at 3.36 million bpd. Oil use has rebounded from the pandemic-induced slump in 2020 and is set to exceed 2019 levels this year even as prices hit record highs. However, high crude prices and Chinese coronavirus outbreaks have eaten into 2022 growth projections. “In 2023 expectations for healthy global economic growth amidst improvements in geopolitical developments, combined with expected improvements in the containment of COVID-19 in China, are expected to boost consumption of oil,” OPEC said in the report. OPEC said its 2023 forecasts assume there will be no escalation of the war in Ukraine and that risks such as rising inflation do not take a heavy toll on global economic growth. The group and its allies including Russia, known collectively as OPEC+, are ramping up output after record cuts put in place as the pandemic took hold in 2020. In recent months OPEC+ has been undershooting targeted production increases owing to underinvestment in oilfields by some OPEC members and by losses in Russian output. The report showed OPEC output bucked that trend in June, rising by 234,000 bpd to 28.72 million bpd.
Gasoline Prices See The Largest Drop In Nearly 15 Years
While gasoline prices are still $1.50 higher per gallon than they were this time last year, they fell sharply overnight in what was the largest one-day drop in nearly 15 years, according to AAA data. The current price for a gallon of gasoline in the United States is averaging $4.721 on Friday, down from $4.752 per gallon on Thursday—a 3.1-cent drop. The weekly change is even more significant at 12.1 cents. According to Gas Buddy’s Patrick De Haan, more than 5,800 gas stations across the country are offering gasoline at $3.99 per gallon or less. While they are trending down this week, gasoline prices are still $1.58 higher than they were this time last year. Gasoline prices continued to drop as crude oil prices rose on Thursday and Friday, but crude oil prices are still down significantly week on week. Crude oil NY hit a high i June of $22.00 a barrel. Now trading at a little over $100.00 a barrel. After Biden as a begging goes to the Saudis, kisses royal ass and does the sword dance pries will come down even further. High gasoline prices have been a worry for the Biden Administration, which has so far released more than 145 million barrels of crude oil from the nation’s Strategic Petroleum Reserves, bringing the SPR down to levels not seen in decades in order to calm the high prices at the pump. Another measure that the Biden Administration has taken includes asking OPEC+ to pump more, but the group has been either unwilling or unable to live up to its production quotas. Also contributing to the price decrease in gasoline is U.S. gasoline demand, which is down roughly 4.5% from last week, according to De Haan. NN: nothing is more inflationary then rising energy prices. On the other hand noting is more deflationary then energy prices peeking and coming down. I have never seen a surge in oil that is not followed by a plunge,
New, highly contagious Omicron variant raises concern for scientists as it spreads in India and beyond
WH: CPI data expected to be ‘highly elevated’
The White House expects June’s consumer price index figures to be “highly elevated” as Americans grappled with substantial increases in the cost of gasoline and food, but said the reading was “already out of date” because of falling energy prices. “Gas and food prices continued to be heavily impacted by the war in Ukraine,” press secretary Karine Jean-Pierre said Monday, adding that the report — to be released Wednesday — was “backwards-looking.” Economists surveyed by Bloomberg expect the report to show consumer prices rose 8.8% in June from a year earlier, which would be a fresh 40-year high following an 8.6% reading in May. But Jean-Pierre downplayed the headline number, pointing out that prices at the pump had fallen since the reading. “June CPI data is already out of date because energy prices have come down substantially this month and are expected to fall further,” she said. June risks being the third month in the past four to see CPI increase at least 1% compared to the previous month. Rising inflation may prompt the Federal Reserve to raise its benchmark rate 75 basis points for a second consecutive meeting on July 27, and has fueled fears of a possible recession despite strong jobs data that shows unemployment near a five-decade low. NN: Tomorrows CPI report will represent peek inflation. Its a lagging report reflecting early June data. From food to energy to minerals prices are dropping. The markets should understand this. But who knows what the knee jerk reaction will be. The great danger now is the fed overtightens,