Succinct Summation of the Week's Events

Succinct Summation of the Week’s Events:

Positives,

1)Initial jobless claims totaled 230k, 10k less than expected and down from 240k last week and vs 250k in the week before. The 4 week average is now 237k vs 235k last week as a 221k print falls out. Continuing claims fell 9k after last week’s rise of 27k and holding above 1.7mm.

2)New home sales totaled 714k in July which was 11k more than expected but June was revised down by 13k so call it a push relative to expectations. The median price, very volatile month to month because the influence of mix, rose almost 5% sequentially, though down 8.7% y/o/y. Homes for sale rose to a 5 month high and we are seeing some more spec building. Months’ supply though ticked down to 7.3 vs 7.5 in June and 7.3 in May.

3)From ULTA: "We saw strong sales across both our store and digital channels, driven by double digit traffic growth. All major categories delivered comp growth for the quarter, supported by strong engagement with the overall beauty category."

4)From BJ: "Our grocery and consumables business continues to be very strong."

5)Japanese August services PMI was the one bright spot with all the PMI's as it rose to 54.3 from 53.8 while manufacturing is just below 50 at 49.7. 

6)In July, Taiwan said its export orders were lower by 12% y/o/y but not as much as the expectations of a 15.5% drop.

7)Germany said its July PPI fell by 1.1% m/o/m, down well more than the forecast of -.2%. The y/o/y drop was 6%. Easy comps are helping.

Negatives,

1)The August S&P Global US composite PMI fell to 50.4 from 52 and that’s the weakest since February. Manufacturing fell to 47 from 49 and services were down by 1.3 pts m/o/m to 51. The slip in services was due to “high interest rates and inflationary pressures” weighing on consumer spending. Price pressures picked up in response to higher wage and fuel bills but for both manufacturers and services, “Efforts to remain competitive and drive sales stifled the pace of selling price inflation, however, which softened from that seen in July.” With manufacturing, new orders fell further and “Muted demand from key export markets, especially Europe, led to a renewed decrease in new export orders in August. The fall in foreign client demand extends the trend of contraction seen since June 2022 which was only broken briefly by a marginal expansion in July.”

2)Core capital spending as measured by non-defense capital goods orders ex aircraft disappointed as while the .1% one tenth m/o/m gain was as expected in July, June was revised down by 5 tenths to a .4% drop and May was revised down by one tenth to a 4 tenths gain. Shipments of core goods also missed expectations.