Succinct Summation of Week’s Events (8/24/12)

Succinct summation of week’s events:

Positives:

1) New Home Sales in July at 372k were a touch above estimates and the most since Apr ’10, albeit still 73% below its record highs. 2) Short term positive only, Der Spiegel on Sunday reports the ECB is considering establishing caps on interest rates for government bonds. The similar story gets somewhat regurgitated today by reuters who said the ECB is discussing yield bands. Bottom line, I’m sure the ECB is talking about everything with the Germans staring intensely over their shoulder.

Negatives:

1) July Durable Goods Orders weak ex volatile transports with non defense capital goods ex transports down for 4th month in past 5 and lower by 6.2% y/o/y.
2) Initial Jobless Claims total 372k, 7k more than expected.
3) July Existing Home Sales a bit light relative to est but months supply falls to 6.4 from 6.5.
4) After 5 weeks in a row of declines of a total of almost 9%, mortgage apps to buy a home rise only .9% on the week and refi’s fall 9.2% to a 6 week low.
5) While somewhat ‘stale’ as Bullard said, the FOMC minutes say many Fed participants want more QE. I keep putting this in the negative camp because I believe the inflation it engenders (CRB index just shy of highest since early April) won’t be offset by economic growth (squeezing corporate margins) and wage growth (squeezing the average person) .
6) HSBC preliminary mfr’g PMI at 47.8 is lowest since Nov ’11 and below 50 for 10th straight month.
7) Shanghai index closes at lowest level since Mar ’09.
8) Euro zone mfr’g and services composite index little changed but at 46.6 is below 50 for 11 month in past 12.

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