Succinct summation of week’s events:
Positives:
1) Fed lowers cost to other central banks of existing swap lines, attacking symptoms of debt disease, euro basis swap in 30 bps from high, Italian, Spanish, Belgium yields down sharply, will ECB follow an EU agreement next week with more action?
2) Unemployment rate falls to 8.6% in part due to 278k job add in the Household survey, payrolls get revised up by 72k in Sept/Oct
3) ISM mfr’g at 52.7 a bit better than expected and up from 50.8 in Oct, New Orders at best since Apr
4) Nov Vehicle sales rise to best since Clunker month in Aug ’09, June ’08 otherwise
5) Oct Pending Home Sales jump 10.4%
6) Consumer confidence rises to 56 from 40.9
7) China cuts RR by 50 bps unexpectedly and Thailand and Israel cut interest rates
Negatives:
1) Portuguese yields rise to near highs, are they the next Greece?
2) Unemployment rate falls to 8.6% in part due to 315k drop in labor force, the most since Jan, Nov payroll gain slightly below estimates, avg hourly earnings up just 1.8% y/o/y, avg duration of unemployment rises to record high, participation rate falls to within .1 of % pt from new low
3) Initial Claims bounce back above 400k (holiday distortion?)
4) Refi’s fall 15.3% to lowest since July even with multi decade low in mortgage rates
5) S&P/CS home price index falls to lowest since Apr ’03
6) China mfr’g PMI falls to 49, the 1st time below 50 since Feb ’09, Shanghai index down on week notwithstanding RR cut.
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