"No warning can save people determined to grow suddently rich" - Lord Overstone

  • 2 hours China’s $33 Trillion Finance Industry Opens To Foreign Investment
  • 3 hours Is Bitcoin Cash Overbought?
  • 4 hours Financial Sector Reports Record Profits
  • 5 hours Iran Bans Crypto Amid Currency Crisis
  • 6 hours Markets On Edge As Treasury Yields Spike
  • 7 hours Silver Pulls Back Following Breakout Week
  • 8 hours Wells Fargo Receives Record-Breaking $1 Billion Fine
  • 10 hours Market Sentiment Slips Ahead Of Tech Earning Reports
  • 1 day The Trillion Dollar Space Race
  • 2 days The FANG Stock Investors Should Avoid
  • 3 days Is This The Death Of The iPhone X?
  • 3 days Is London Still The Financial Capital Of The World?
  • 3 days Is Gold Staging A Comeback?
  • 3 days The $200 Million ‘Golden Parachute’ For Rupert Murdoch
  • 3 days Bitcoin’s Breakout Is Not As Bullish As it Seems
  • 3 days Farmers On Edge As Trade War Hits U.S. Grain Shipments
  • 3 days Is Silver Poised For A Massive Break Out?
  • 4 days Meet The Hedge Fund Billionaires Club
  • 4 days The Next Housing Crisis Could Be Right Around The Corner
  • 4 days Cartel's, Pirates And Corruption Cost Mexico $1.6 Billion Per Year
The FANG Stock Investors Should Avoid

The FANG Stock Investors Should Avoid

Thanks to a private data…

Tech Giants Rally Ahead Of Earnings Reports

Tech Giants Rally Ahead Of Earnings Reports

Earning season has just begun,…

Ashraf Laidi

Ashraf Laidi

Ashraf Laidi is the author of "Currency Trading and Intermarket Analysis: How to Profit from the Shifting Currents in Global Markets" - Wiley Trading.

More Info

Empire Fed, Retail Sales, Industrial Production All Miss

Core Retail Sales and Industrial Production (AUG)

A trifecta of misses in today's US economic releases may not be a game-changer in Thursday's Fed decision because the game is already "unchanged". The September Empire Fed survey posted another double digit decline to remain at 6-year lows, August retail sales rose 0.3% to miss expectations for the sixth consecutive month and industrial production fell 0.4% in August to post seven declines over the past eight months--the worst pattern since 2008-9.

Empire Fed, Retail Sales, Industrial Production all miss - Empire Philly Ism Sep 15

On the bright side, core retail sales (excluding autos, gas and building materials), rose along upward revisions to the prior two months. In the Fed's Empire survey, the employment component turned negative to 6.2 from 1.8, as did the average workweek plunging 10.3 from -1.8. US industrial production was battered by the usual strong US dollar story and weak exports. Manufacturing dropped 0.5%, mining fell 0.6% and utilities were up 0.6%.


Bearish Argument

The bearish side may argue against the robust retail sales by indicating thereport was too early to take into consideration the slump in equities, materializingin the 2nd half of the month. The argument becomes especially potent followingFriday's release of the preliminary report of the September University of MichiganSentiment Survey, showing the biggest one-month plunge since late 2012. Thus,the release of US September retail sales, due in mid-October (2 weeks beforethe FOMC) could potentially disappoint.


Bullish Argument

A more optimistic interpretation of the figures could point to the fact thatthe gloomy surveys in the chart above focus on manufacturing, which has beenpummelled by the disinflationary challenges of a strengthening US dollar andthe eroding global supply change. Not only manufacturing accounts for shrinkingpart of the overall US economy, but also inflation is more positive in the servicessector.

This leaves us with tomorrow's release of US August CPI for and Thursday's September Philly Fed survey as the remaining last figures prior to the Fed decision. Fed watchers are already hedging themselves in their prediction for the big event, indicating a hawkish statement/forecasts accompanying an unchanged announcement on rates, while others predict a dovish statement/forecasts to accompany a rate hike. While we lean towards expecting no change this week, markets have already made up their mind in pursuing further downside for the month.

 

Back to homepage

Leave a comment

Leave a comment