Succinct summation of week’s events:
Positives:
1) While Oct job gains were only 80k, the weakest in 4 months, the prior two months were revised up by a net 102k
2) Initial claims below 400k at 397k
3) Oct Vehicle sales in line with estimates but best level since Feb
4) China service indices mixed relative to expectations but both firmly above 50
5) Inida mfr’g PMI rises to 52 from 50.4 and South Korea rises a touch although remains below 50
6) RB of Australia cuts interest rates 25 bps to 4.5% to help economic growth as one of the only responsible central banks in the world gave themselves bullets over the past few years
7) ECB cuts rates to help economy but inflation is their mandate, Phillips Curve faith
Negatives:
1) Within payrolls, avg hourly earnings up only 1.9% y/o/y vs CPI near 4%
2) ISM mfr’g and services both slightly below forecasts
3) US Oct retail comps light
4) Canada reports unexpected sharp drop in jobs
5) Papandreou creates chaotic situation in Greece with referendum call. I’m all for democracy but that’s what elections are for and he made a deal with his EU counterparts
6) Italian gov’t losing the faith of the markets to liberalize their economy, yields spike across their yield curve
7) EFSF can’t sell bonds, an embarrassment for this supposed AAA paper
8) German Sept factory orders unexpectedly fall for a 3rd straight month
9) Euro zone mfr’g and services composite index revised down to 46.5 with Italian mfr’g specifically down to 43.3 and services at 43.9
10) Euro zone CPI at 3%, holding at highest since Oct ’08, ECB bets it’s not sustainable with slowing economic growth, we’ll see
11) China mfr’g PMI falls to 50.4 from 51.2, Taiwan drops to 43.7
12) Bernanke officially lays groundwork for QE3. I say he is the most dangerous impediment to sound economic growth, more so than Congress that he has enabled and financed to spend the way they have.
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