Succinct Summation of the Week's Events

Succinct Summation of the Week's Events:

Positives,

1)Within the payroll report, hours worked did tick up to 34.4 from 34.3 and a positive within the report as employers are calibrating hours more so than looking to hire/fire. Average hourly earnings were up by .2% m/o/m, one tenth less than expected but up 4.3% as forecasted due to rounding. Combine the two and average weekly earnings were up .5% m/o/m and 4% y/o/y, the most since the spring. The participation rate rose two tenths to 62.8%, the highest since February 2020 when it was at 63.3%. The key 25-54 yr old cohort saw its participation rate up by one tenth to 83.5% after a one tenth drop in July, above the February 2020 level.

2)Initial jobless claims totaled 228k, 7k less than expected and vs 232k last week (revised up by 2k). The 4 week average did tick up a hair to 238k from 237k because a 227k printed dropped out.

3)Taylor Swift helped to ignite the concert, travel, hotel, merchandise and food/beverage industries and now she's giving a lift to the movie theater business with a concert movie coming out in October. Reporting by the WSJ said "AMC said that it sold $26 million worth of advance tickets Thursday for Swift's concert movie, a record for one movie in a single day." What an incredible fan base, 

4)Apartment List released its National Rent Report for August which measures new leases and not renewals and rents are now down 1.2% y/o/y. Versus July, rents were basically unchanged, down .1%. A key factor in the slowdown is more supply as their vacancy index rose to 6.4%, a touch higher than the pre-pandemic average and up for the 22nd straight month.

5)The PCE inflation data for August was as expected. Both headline and core were up .2% m/o/m and the headline y/o/y increase was 3.3% vs 3% in July and the core rate was up by 4.2% vs 4.1% in July. Goods prices fell .5% y/o/y but completely offset and then some by a 5.2% rise in services.

6)Pending home sales in July, covering existing homes, rose .9% m/o/m, better than the expected drop of 1%. They still remain down though almost 14% y/o/y. 

7)The MBA said that for the week ended 8/25 purchase applications for a home rose 2% w/o/w off the lowest level since 1995. Refi's were up 2.5% w/o/w and follows 5 weeks of declines.

8)While below 50 for a 10th straight month, the August ISM manufacturing index rose 1.2 pts m/o/m to 47.6 and that was above the estimate of 47. New orders though slipped again to 46.8 from 47.3 and prices paid rebounded to 48.4 from 42.6. Export orders remained well below 50 at 46.5. Just 5 of 18 industries saw growth but that is up from 2 in July. I'll include a quote from a chemical products company as their stuff goes into so many things, "Demand still weak. Customer inventories are getting depleted; however, we are not seeing a real uptick in demand. General supply conditions are softening."

9)Within the July construction spending data, manufacturing construction stands at a record high of $201b, double the level of early 2022 and compares with about an $80b trend in 2019. All due to you know what.

10)The August income and spending numbers were a touch better than expected.

11)After falling to the lowest level since last September, C&I loans outstanding for the week ended 8/16 did rebounded by $9b.

12)From DELL: "Coming into the quarter, we were cautious given our Q1 results, but the demand environment improved at a faster rate than we anticipated, particularly as we moved into June and July...We saw better underlying demand in the US market, and EMEA was better than anticipated. We also saw demand growth in government and SMB, and our transactional demand improved through the quarter.

13)From LULU, after a good quarter: "I'm also excited to see our sales strength continuing into Q3 as guests are responding well to our back to school and early fall product innovations."

14)From SIG: "We've seen generally modest improvement in customer traffic and purchase behavior since early June, with lower price points rebounding, particularly in fashion. Average transaction value, or ATV, appears to have stabilized and is trending roughly in line with last year."

15)Hopefully the property easing in China helps to increase demand and affordability for apartments.

16)Caixin manufacturing index got back above 50 at 51 from 49.2 in July. The estimate was 49. Caixin said "Supporting the improvement in overall business conditions was a renewed increase in new order intakes. Companies indicated that firmer underlying market conditions had helped to boost client spending. The modest upturn in overall sales occurred despite a further drop in new business from abroad in August, suggesting that stronger domestic demand was the main source of growth."

17)Macau released its August figures overnight and according to Inside Asian Gaming gross gaming revenues rose another 3.3% from July and to a post Covid record. Thru the first 8 months of 2023, GGR is back to almost 60% of where it stood in 2019 so a lot more growth is to come. Expectations are for this to be at 80% by the end of Q3.

18)India and Indonesia's manufacturing PMI's were well above 50. 

19)South Korea's August exports fell by 8.4% y/o/y but that wasn't as bad as the forecasted drop of 11.8%. Shipments of semi's fell again and total exports to China were down by 20% y/o/y but rose to the US by a slight 2.4%.

20)Reflecting the manufacturing recession that is global, Vietnam said its August exports fell 7.6% y/o/y but not as bad as the 9.5% drop that was forecasted. Imports were lower by 8.3% y/o/y vs the estimate of down 9.9%.

Negatives,