LEI and Yuan stories
American Capitalist newsletter this am.
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That much-needed three day rally on Wall Street took a break this morning as many awaited news from the economic front. They weren’t too disappointed on jobs. Leading indicators – that’s a whole other story.
Strongly indicating a stronger job market, initial jobless claims fell by as much as 20,000 – its biggest drop in a month – to 321,000. The Street was only looking for a drop by 10,000. The four-week moving average came in at a one-month high of 329,750. But anything below that 350,000 mark still indicates job growth.
Unfortunately, it looks as if the economy has lost some of its “forward momentum” after the index of leading indicators fell for the fourth month. It fell 0.2% after falling 0.6% in March. While the number does show a continuation of economic growth, it also shows a loss of forward momentum. In short, we’re starting to lose steam.
As for oil, after rising to US$47.50, crude pulled back this morning to US$47.20. The dollar is continuing to gain momentum on speculation that the Fed rate will continue to raise as the ECB does nothing. The dollar is already up about 6.6% this year on indications that the Fed bosses are upping the borrowing costs.
We’re gaining on the yen, which continues to fall on news that foreign investors sold Japanese stocks. Overseas investors, in the week ended May 14, sold 36.5 billion yen, or US$341.2 million, worth of stocks. However, any further decline in the yen could be limited after the Hong Kong Monetary Authority “set a ceiling for its currency, spurring speculation the city is preparing for China to let yuan trade more freely,” according to Bloomberg.
Pennies not a zero sum game as much as some zero game.
