Succinct Summations of Week’s Events (8/30/13)

Succinct Summations week ending August 30, 2013.

Positives:

1. U.S. Q2 GDP growth was revised to a 2.5% (from 1.7% annualized rate).
2. Initial jobless claims fell 6k to 331k this week; 4 week average at lowest level since November ’07;
3.  Consumer Confidence rose to 81.5 v expectations of 79 — just below the best since January ’08
4. Q2 personal consumption came in at 1.8% v expectations of 1.7% (but down from 2.3% in Q1).
5. Case-Shiller home prices rose 12% year over year.
6. Richmond fed manufacturing index unexpectedly surges to 14 v expectations of 0. Dallas and Chicago manufacturing indices also improve in August (Milwaukee though falls below 50).
7. Despite the rise in mortgage rates — or perhaps because of them? —  purchase applications rise 2.4% to 3 week high;
8. Japan continues to make progress in their Abenomics experiment. BoJ sees CPI ex food rise 0.7%  (higher than expected)
9. Despite the EU recession, German, French and Italian business confidence in August all rise more than expected.
10. The Savings rate holds steady at 4.4%.

Negatives:

1. Revised 2Q GDP data suggest that the economy is gaining momentum. After bottoming at 0.1% in 4Q of last year, growth picked up to 1.1% in 1Q and 2.5% in 2Q. Is the fiscal shock rapidly fading, opening the door to a September Fed tapering?
2. After 2 ½ years of an ever escalating civil war in Syria, a line was finally crossed that mattered to markets but there is no good outcome with what comes next, just the least worst. Cameron in the UK doesn’t get Parliamentary support, thus further limiting response options for now.
3. Crude Oil hits a 2-year high as fear escalates over Syria.
4. Rising rates are killing emerging markets and their currencies.  The rupee had its worst single day in 18 years.
5. Home prices are increasingly bubblicious, as double digit gains keep new families away from ownership.
6. Durable goods fell 7.3% v expectations of a 4% drop (largest drop in nearly a year). Core shipments also fall
7. Pending home sales fell 1.3% v flat expectations.
8. Average 30 year mortgage is now up to  4.8%; MBA refi’s fall 5.4% — lowest levels since February ’11 and down for the 15th week in the past 16.
9. Personal Income and Spending both rise just 0.1% — same amount as headline PCE inflaton (no REAL growth) Estimates were for gains of 0.2% and 0.3% respectively.
10. Retail sales in Japan were weaker than expected in July.