What a day. USA markets down 1.1% to $1.5%. A great jobs report spooked the market (as they see a quicker end to the Fed's zero interest rate policy). Treasury yields soared 10-13bps, Best week for the US Dollar since September 2011, Crude oil prices closed down with benchmark Brent losing its most in a week since January. Consumer credit in January crashed from December's revised $17.9 billion to only $11.6 billion
NEW YORK (Reuters) - U.S. stocks retreated on Friday, with the S&P 500 index poised for its second straight weekly drop, after a strong monthly jobs report fueled expectations for an interest rate hike by the Federal Reserve this year.
NEW YORK (Reuters) - Apple Inc , the largest U.S. company by market value, will join the Dow Jones industrial average , replacing AT&T Inc , in a change that reflects the dominant position of the iPhone maker in the U.S. economy and society.
Stocks did not 'love' the great headline jobs data... worst day for S&P and Dow since Jan 5th
Bonds did not 'love' the great headlines jobs data - Treasury yields soared 10-13bps on the day and 20-25bps on the week (2Y +11bps on the week) - 2nd worst week for bonds sine June 2013's Taper Tantrum - note that 30Y rallied 3bps off the highs as stocks accelerated lower...
Commodities did not 'love' the great headlines jobs data
Global currencies did not 'love' the great headlines jobs data - best week for the US Dollar since September 2011
NEW YORK (Reuters) - Crude oil prices closed down on Friday, with benchmark Brent losing its most in a week since January, as a resurgent dollar and fear of a U.S. rate hike diverted attention from the shrinking number of rigs drilling for oil in the United States.
DETROIT (Reuters) - Tesla Motor Inc said on Friday that construction of its giant $5 billion battery plant in Nevada remains on schedule despite a newspaper report saying the electric carmaker's project was delayed.
Don't look now, but the sharp slide in crude prices may be leading the proverbial sheep to slaughter. Investors have piled into the market's largest crude ETF over the last several months sending the number of shares outstanding to the highest level since 2009. We suspect many of these "investors" might be unaware that they're currently staring down the most severe decoupling between second- and first- month contracts in four years.
The labor dispute that wreaked havoc on West Coast ports and on shippers for months was tentatively settled on February 20. By then, it was too late.
Cargo had been delayed for weeks. Perishable goods with sell-by dates were stuck in refrigerated containers somewhere. Companies around the country spent endless working hours to keep the supply chain from collapsing. Cargo was shipped by air at a big additional cost. Demurrage charges and other costs piled up. Manufacturers, like Honda, ran out of parts and had to cut productionaeuro - . It was a fiasco shippers won't forget.
Growers in the Central Valley of California, when they want to export their produce to Asia, don't have a choice. Shipping these goods across the country to ports on the East Coast or the Gulf or to Canada is too costly and takes too long. Other companies have the same problem. They're captive customers of the West Coast ports. But not every company has that problem.
There is the near-term impact.
"Damage to the first quarter is done, and there's nothing we can do about it," Journal of Commerce economist Mario Moreno told the annual TPM Conference in Long Beach.
In January, the volume of US containerized imports was down 10% from a year ago. West Coast ports, which handled about 54% of the imports last year, weighed heavily. For instance, at the Port of Los Angeles, volume plunged 28%, at the Port of Oakland 32%!
And February, Moreno said, doesn't look a lot better. It will drag down the whole year, with total US containerized imports inching up a crummy 1.7% in 2015, rather than the 6% he'd projected earlier.
ATHENS/BRUSSELS (Reuters) - Greece sent its euro zone partners an augmented list of proposed reforms on Friday but EU officials said several more steps were required before any release of aid funds to a country that Prime Minister Alexis Tsipras says has a noose around its neck.
Last month we observed that in the aftermath of the worst print in non-revolving (i.e., student and auto loans) debt since November 2013, that the subprime-credit driven, pardon the pun, feeding frenzy for cars is now over. And sure enough, following this month's disappointing auto sales which missed virtually for every single producer, we were again correct. This month, however, things are even worse, because while last month it was the collapse in the non-revolving debt that was the highlight, at least it was modestly offset by a surge in revolving credit as consumer loaded up the credit cards. No such luck this month.
Moments ago, we learned that consumer credit in January crashed from a revised $17.9 billion to only $11.6 billion, far below the 414.7 billion expected, the biggest miss since August, and the lowest growth in consumer credit since November 2013.
And while non-revolving debt did post a modest rebound from last month's plunge, rising from $11.7 billion to $12.7 billion, which was still the lowest since 2013 excluding January...
... it was the plunge in revolving, credit-card, debt that was the huge outlier this month, after revolving credit crashed from $6.2 billion in December to a negative $1.2 billion in January - this was the biggest drop in revolving credit since 2013!
NEW YORK (Reuters) - Nasdaq OMX Group said on Friday its experiment in lowering exchange fees and rebates in 14 stocks has so far led to lower market share in those names on its exchange as many electronic market making firms sought higher rebates elsewhere.
It has been over 4 months since The Fed ended QE3, and something odd has happened... Stocks have stopped going up. The world's largest stock index by market capitalization has, thanks to today's weakness, given up all of the gains since Janet wrenched the punch-bowl away...
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
We are witnessing a profound secular sea-change: the failure of expanding debt and leverage to lift the real economy of wages and household income.
When push comes to shove, you only need one chart to predict the future: debt and wages ( credit and compensation). This chart displays debt and wages as a ratio: debt/wages. What it reveals is the endgame of financialization: creating more debt no longer pushes wages higher. I have broken the past five decades into easily recognizable economic periods. During the organic growth of the 1960s that many view as the ideal--what I term the pre-financialized economy, the line is almost flat, as debt and wages expanded in a balanced fashion. The 1970s, a rocky period of stagflation, higher energy costs and painful adjustments to the economy, is remarkably stable when boiled down to the debt/wage ratio. Financialization--the securitization of previously stable assets, the expansion of leverage and speculative financial instruments--began in the early 1980s. We see the effect of rapidly expanding debt on the economy: the line leaps higher and only flattens out in the tech-boom 1990s. Why did the ratio flatten out? This was a period of organic expansion similar to the 1960s: wages expanded as did the number of jobs. Debt and wages once again expanded in a balanced fashion. &nbs ...
Three days ago we revealed what we dubbed a "GDP Shocker: Atlanta Fed Calculates Q1 Growth Of Only 1.2%", which as we clarified the next day showing the spreadsheet used by the Fed, is based almost entirely but not exclusively on the collapse in energy capex and its resultant adverse impact on non-residential construction (in addition to a drop in consumption and trade). We said that not only is this entirely reminiscent of the GDP collapse in Q1 of last year, but that it was only a matter of time before the sellside picked up on this huge divergence and proceeded to slash their own GDP numbers.
Well, in the aftermath of today's super-strong (supposedly) jobs number, one would think that the sllside would be rushing to hike their GDP estimates, right.
Wrong. Because moments ago, JPM's Michael Feroli released a note which confirmed we were right on both counts: not only did Wall Street just now realize how far behind the real-time curve it is, but that - just as we cautioned - Q1 of 2014 is back, precisely one year later.
Revising down Q1 GDP (here we go again?)
In light of the data we've received this week aeuro " January reports for real consumer spending, construction spending, and net exports that varied from disappointing to downright weak, as well as a softer February print for car sales aeuro "-- we are marking down our tracking for annualized real GDP growth in Q1 from 2.5% to 2.0%.
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