Succinct summation of the week’s events:
1) Off the lowest level since 2009, the January Chicago PMI jumps to 55.6 from 42.9.
2) US Initial jobless claims totaled 278k; 4 week average fell to 283k from 285k.
3) New home sales in December totaled 544k annualized, 44k more than expected, up from 491k in November and the most since February.
4) November S&P/CS 20 city home price index rose 5.8% y/o/y, the most since July 2014.
5) MBA said mortgage applications to buy a home rose 22.5% y/o/y; refi’s were down by 30% y/o/y. Average 30 yr mortgage rate was 4.02% — lowest since late October.
6) Conference Board’s measure of consumer confidence in January rose to 98.1 from 96.3 and that was above the estimate of 96.5.
7) China also said that industrial profits fell 2.3% in 2015 y/o/y, the first annual decline in at least 15 years.
8) Europe: Q4 GDP for France rose .2%, UK GDP in Q4 rose .5%; Spain’s Q4 GDP grew by .8%; Spanish unemployment rate fell to 20.9% from 21.2% in Q3 (lowest in 5 years).
1) US economy grew by 0.7% annualized in Q4, one tenth less than expected; price deflator was up 0.8%, making nominal GDP just 1.5%.
2) Kuroda and 4 colleagues at the BoJ unleash Economic Kamikaze on the Japanese. Negative interest rates is a tax on money that banks will just pass on to their customers. Wanting higher inflation without faster wage growth is a tax on consumers. And, the BOJ just amped up the global currency battles. Low inflation is just a symptom, not the disease.
3) Japanese CPI rose by 0.8% y/o/y ex food and energy, below estimate of up 0.9%; Japanese retail sales in December unexpectedly fell by .2% m/o/m vs the estimate of a 1% rise; For 3rd straight month Japanese exports in December fell y/o/y; Japanese industrial production in December fell 1.4% m/o/m, worse than expectations of down 0.3%.
4) US Core durable goods orders fell 4.3% m/o/m; November revised down by 8 tenths to a fall of 1.1%. Year over year drop in the core rate of capital spending was 7.7%.
5) Pending home sales in December rose just 0.1% m/o/m vs the estimate of up 0.9%. November was revised down a touch to a drop of 1.1%
6) UoM consumer confidence index was 92, 1 pt less than expected, down from the preliminary print of 93.3 and vs 92.6 in December.
7) Markit’s US services index fell to 53.7 from 54.3 in December. That is the lowest print since December 2014. (Markit said “service sector firms continued to cite improving domestic economic conditions and rising client demand during January”).
8) Employment Cost Index rose by 0.6% q/o/q in Q4