Stocks up, bonds/rates holding in headline driven market.
Here’s all key data/charts so far this week.

Rates hold after flat PPI, lower retail sales, better manufacturing.

Inflation (Wholesale) -PPI – Month/Month +0.8 % -PPI – Year/Year +7.0 % -PPI less food & energy – Month/Month +0.2 % -PPI less food & energy – Year/Year +2.5 % -This is inflation at the wholesale level. The numbers are high but businesses have been profitable and able to absorb the increases in the raw [...]

Retail Sales (August) -Retail Sales – Month/Month unchanged -Retail Sales less autos – Month/Month change +0.1 % -This is not good. Only the consumer can get GDP going and the consumer is overleveraged, unemployed or concerned. Unless it causes consumer spending to increase, anything done in D.C. is for naught. Business Inflation (PPI) -PPI – [...]

Face it: there is no quick fix for the problems in Europe, or in this country. The situation in Europe is worsening, and the fear that sovereign debt would spread has done just that: French, German, and Spanish banks are now viewed as vulnerable since they hold a good amount of poor European debt from [...]

Wholesale Inflation -PPI Month/Month: +0.2% -PPI Year/Year: 7.2% -Core PPI Month/Month (less food & energy): +0.4% -Core PPI Year/Year (less food & energy):+2.5% -Core inflation is too high considering depressed economy. -Let’s not judge effect until we see CPI tomorrow. -Business has displayed a tendency to absorb wholesale costs and, with corporate profits so high, [...]

June Producer Inflation -Overall PPI Month/Month: -0.4% -Core PPI Month/Month: +0.3% -Overall PPI Year/Year: +7% -Core PPI Year/Year: +2.4% -Lower energy costs this month. This is also a time to remind that ‘Overall’ is a better macroeconomic indicator because it smooths out the volatility of energy and food prices. June Retail Sales -Overall Retail Sales [...]

Retail sales dropped 0.2% in May, the first drop in 11 months, but economists were expecting a 0.4% to 0.5% drop so stocks are rallying on the news plus some favorable earnings today (S&P 500 +16 to 1288). Meanwhile rates are up as mortgage bonds sell sharply (FNMA 4% coupon -62 basis points) on inflation [...]

Inflation: PPI core and overall Month/Month were +0.2% for May PPI core Year/Year was +2.1% PPI overall Year/Year was +7.0% – a reminder of how large the swings in food and energy have been. Retail Sales: Retail Sales (overall) Month/Month was -0.2% Retail Sales (less autos) Month/Month was +0.3% Today’s data is market neutral. The [...]

The good news is that rates begin the May 16 trading week near 2011 lows. The bad news is that it’s because of a frail economy. Rates drop when bond prices rise, and mortgage bonds have rallied the last four weeks on lower home prices, weak GDP, and low core inflation. Bonds are topped out [...]