Wed 15 Nov 2017


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In Portfolioticker today

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  • Today at the stock market Opinion
  • The portfolio today Opinion
  • News
  • flag_japan Japan Update
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  • Today at the stock market

    bull/bearU.S. stocks fell on Wednesday as energy sector shares dropped for a fourth straight session, tracking crude prices, while tech, the best performing sector this year, weighed the most on the S&P 500.

    • The S&P 500 index fell 14.25 points, or 0.55%, to 2,564.62
    • The Dow Jones Industrial Average fell 138.19 points, or 0.59%, to close at 23,271.28
    • The Nasdaq Composite index fell 31.66 points, or 0.47%, to 6,706.21
    • Declining issues outnumbered advancing ones on the NYSE by a 1.78-to-1 ratio; on Nasdaq, a 1.60-to-1 ratio favored decliners.
    • The S&P 500 posted 35 new 52-week highs and 19 new lows; the Nasdaq Composite recorded 45 new highs and 84 new lows.
    • About 6.55 billion shares changed hands in U.S. exchanges, compared with the 6.78 billion daily average over the last 20 sessions.
    • The CBOE Volatility index (VIX) a widely followed measure of market anxiety, hit a more than 2-month high at 14.51 and was last up 1.5 points at 13.13.

    Oil prices fell for a 4th session after data showed an unexpected increase in crude and gasoline stockpiles. The S&P 500 energy sector notched a 4-day decline of 4%, its weakest such period in 14 months:

    • Brent and U.S. crude both fell after touching last week their highest in almost 2½ years.
    • Exxon fell 1.3% to $81.21 and Schlumberger fell 2.0% to $61.55 after touching $61.11, its lowest since Jan 2016.

    “Oil coming off recent highs and as crude prices move so (do) the big energy stocks,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

    The tech sector was the largest weight on the S&P 500, something Jankovskis attributed partly to their “very strong run this year; perhaps some people are taking profits.”

    After the closing bell, Cisco shares rose 3.4% after the company reported a 3.1% rise in quarterly profit driven by growth in its newer business areas.

    A rise in both inflation and retail sales sent a signal to the Federal Reserve, which had been concerned about a recent disinflationary trend, setting the U.S. central bank on a path to raise benchmark interest rates in December.

    Among the few Wall Street gainers on Wednesday were financial stocks, which rose on prospects of further rate hikes. The S&P 500 bank index .SPXBK added 0.61 percent.

    High-yielding sectors like utilities and consumer staples, among the so-called bond proxies, were the largest decliners outside of energy.

    Target shares tumbled 9.9% to $54.16 after it issued a disappointing profit forecast for the key holiday quarter.

    Republican U.S. Senator Ron Johnson said he opposes his party’s Senate tax revamp proposal, the Wall Street Journal reported, leaving the passage of the proposal in limbo as the GOP holds a slim majority. More: Bloomberg

    Analysts have said the slashing of the corporate tax to 20% from its current 35% would likely be a boon for the stock market.Reuters

    Market indices

    Market indices
    ^ Market indices today (mouseover for 12 month view) Chart: Google Finance

    Index Ticker Today Change 31 Dec 16 YTD
    S&P 500 SPX (INX) 2,564.62 -0.56% 2,238.83 +14.55%
    DJIA INDU 23,271.28 -0.60% 19,762.60 +17.75%
    NASDAQ IXIC 6,706.21 -0.47% 5,383.12 +24.57%

    Portfolio Indices

    USD and AUD denominated indices over the past 52 weeks (Chart: Bunting)
    ^ USD and AUD denominated indices over the past 52 weeks Chart: Bunting

    Index values

    Index Currency Today Change 31 Dec 16 YTD
    USD-denominated Index USD 3.041 -1.09% 2.105 +44.47%
    Valuation Rate USD/AUD 0.76391 -0.54% 0.72663 +5.13%
    AUD-denominated Index AUD 3.982 -0.56% 2.895 +37.53%

    Portfolio stock prices

    Stock Ticker Today Change 31 Dec 16 YTD
    Alphabet A GOOGL $1036.41 -0.54% $792.45 +30.78%
    Alphabet C GOOG $1020.91 -0.53% $771.82 +32.27%
    Apple AAPL $169.08 -1.31% $115.82 +45.98%
    Amazon AMZN $1126.69 -0.90% $749.87 +50.25%
    Ebay EBAY $35.30 +0.22% $29.69 +18.89%
    Facebook FB $177.95 -0.06% $115.05 +54.67%
    PayPal PYPL $73.43 -1.43% $39.47 +86.04%
    Twitter TWTR $19.91 -0.70% $16.30 +22.14%
    Visa V $110.25 -1.55% $78.02 +41.30%
    VMware VMW $121.19 -1.05% $78.73 +53.93%

    FX: USD/AUD

    USD

    DXY movements
    ^ Bloomberg Dollar Spot Index (DXY) movements today (mouseover for 12 month view) Chart: Bloomberg

    The Bloomberg Dollar Spot Index (DXY) fell 0.1%, after touching the lowest in almost 4 weeks.
    The EUR was little changed at USD 1.1797, reaching the strongest in almost 4 weeks on its 6th consecutive advance.
    Britain’s GBP rose 0.1% at USD 1.3175.
    Japan’s JPY advanced 0.3% to 113.09 per USD, after touching the strongest in almost 4 weeks on the biggest increase in almost 10 weeks.
    Bloomberg

    AUD

    AUD movements
    ^ AUD movements against the USD today (mouseover for 12 month view) Chart: xe.com

    Oil and Gas Futures

    Futures prices

    Prices are as at 15:49 ET

    • NYMEX West Texas Intermediate (WTI): $55.25/barrel -0.81% Chart
    • ICE (London) Brent North Sea Crude: $61.83/barrel -0.61% Chart
    • NYMEX Natural gas futures: $3.08/MMBTU -0.68% Chart

    Credit Suisse Wealth Report 2017

    Report Extracts [ser_cs_wealth]

    Global Picture

    Despite the recent financial crisis and the lackluster performance of the world economy since then, global household wealth has increased by USD 163 trillion between 2000 and 2017. Emerging markets have been raising their share in world wealth and have increased their contribution to wealth growth since the beginning of this century. But what is likely to happen in the near future? We draw a picture of future global household wealth by presenting estimates of total wealth and its distribution across regions by the year 2022. We expect that emerging economies will continue to catch up with developed economies, albeit at a slower pace than previously estimated …

    Based on our projections for the next five years, Millennials are not expected to benefit from the high rate of returns that the baby boomers did in the 1980s and 1990s. Based on the experience of past cohorts in normal times, we expect nominal wealth of the younger Millennials to grow at three times the overall growth rate of the economy. In this scenario, with an annual growth rate for global wealth of 3.9%, we should expect younger Millenials to have lower wealth in five years than their older counterparts today …

    The Eurozone’s total wealth of USD 53 trillion in 2017 is comparable to the total wealth of the United States at the end of the 1990s. Five years from now, it should only grow the equivalent of one year in terms of the history of the United States. The case of China between 2000 and 2017 is striking, but is expected to slow down. Its wealth increased between 2000 and 2017 to the same extent as US wealth increased over the course of the 70 years from 1916, but is expected to increase by the equivalent of eight US years between 2017 and 2022 to reach USD 35 trillion, comparable to the US level in 1994.

    Total wealth in Japan is comparable to that of the United States in 1973, and is expected to reach USD 25 trillion in 2022, which is an improvement of only four “USA years.” The case of India is also noteworthy. Total wealth in India increased fourfold between 2000 and 2017, reaching USD 5 trillion in 2017. Despite this remarkable increase and
    having four times the population of the United States, total wealth in India is comparable to the level for the United States 90 years ago. We expect it to reach USD 6 trillion in real terms by 2022, which is comparable with the level in the United States in 1936 …

    The components of wealth

    Among the components of wealth, financial wealth has outpaced the growth in non-financial wealth since 2009, but has actually underperformed since 2000. While the level of financial assets was hit harder by the financial crisis than non-financial, it has recovered faster than real assets since then. Our forecasts assume that non-financial wealth will slightly outpace financial wealth by around 1% annually in the next five years. We also expect debt to grow at a faster pace than both financial and non-financial wealth in the coming years after a period of stability between 2007 and 2010. Household debt is expected to increase by 37% in the next five years to reach 15% of gross assets.

    Wealth distribution in 2022

    The proportion of adults in the lower strata of wealth (less than USD 10,000) will likely decrease from 70% today to 66% in 2022. The global middle class – those with net worth between USD 10,000 and USD 100,000 – is projected to grow by nearly 230 million adults, 40% of whom will be from China, exceeding 1.2 billion adults by 2022. The aggregate wealth of the middle class will likely grow by around 20%, resulting in a small decline in average wealth per adult. The number of adults in the upper middle segment, which consists of those with wealth between USD 100,000 and USD 1 million should grow by 52 million adults, while wealth per adult in this segment could rise by about 3% between 2017 and 2022.

    Trends in millionaires and UHNWIs

    The millionaire segment is projected to rise in number by 22%, from 36 million today to 44 million in five years’ time. The lower world wealth growth that we expect in the next five years should result in a slower pace of growth in the global
    number of millionaires and ultra high net worth individuals (UHNWIs). But there are differences across regions. While millionaire numbers in emerging economies are still far below the levels in the United States or Europe, they are expected to increase substantially by 2022. China could see its number increase by 41% to 2.7 million to reach the third position in the millionaires’ world ranking behind the United States and Japan, but ahead of Germany and the United Kingdom. India could reach 370,000 millionaires in 2022, an increase of more than 50% in the next five years. We also project substantial increases in Latin America, pushed by the improved performance of Argentina (127%) and Brazil (81%). In addition, the number
    of millionaires in transition economies is predicted to rise substantially over the next five years, reaching196,000 in Russia, 74,000 in Poland and 44,000 in the Czech Republic.

    Among developed economies, the United States and Japan should see their millionaires rise by more than one million, and also Canada and Australia will experience important rises in their number of millionaires. On the other hand, given the expected poor performance of the United Kingdom after Brexit, we estimate a slight decline in its number of millionaires.

    By 2022, the number of UHNWIs, those with wealth above USD 50 million, will likely increase by 45,000 to reach 193,000 individuals, more than half of whom will reside in North America. Countries in the Asia-Pacific region, including China and India, are home to more than 37,000 UHNWIs, compared to almost 32,000 living in Europe. This difference in favor of Asia-Pacific will increase further and, by 2022, the region is projected to accumulate another 14,400 UHNWIs to reach a total of nearly 52,000, 49% of whom will be from China. While Latin America is home to 8.5% of global adults, only 2% of global UHNWIs reside in the region. Despite the projected good performance of Brazil and Argentina, we expect this to continue as the region will likely add only 1,600 UHNWIs in the next five years.

    Assuming no change in global wealth inequality, the global economy is projected to add another 719 billionaires in the next five years, meaning that their number will rise to nearly 3,000. Of these, 230 will be from North America and 205 from China. Of the additional 235 billionaires expected from Europe, 33 are likely to be from Russia.

    Switzerland

    Since the turn of the century, wealth per adult in Switzerland has risen by 130% to USD 537,600. Disregarding Iceland, for which the data are less reliable, Switzerland has headed the global rankings every year. Most of the rise since 2000 has been due to appreciation of the Swiss franc against the US dollar, especially between 2001 and 2013. Measured in Swiss francs, household wealth rose 35% from 2000 to 2017 – an average annual rate of 1.8%.

    Financial assets make up 54% of gross wealth in Switzerland – somewhat higher than their share in the United Kingdom, but less than in Japan or the United States. Debts average USD 140,500 per adult, one of the highest absolute levels in the world, and represent 21% of total assets. The debt ratio has changed little in ecent years, and appears to reflect the country’s high leve; of fi ancial development, rather than excessive borrowing.

    Among the ten countries with long series of wealth distribution, Switzerland is alone in having seen no significant reduction in wealth inequality over the past century. A combination of high average wealth and relatively high wealth inequality results in a large proportion of the Swiss population being in the upper echelons of the global distribution. Switzerland accounts for 1.7% of the top 1% of global wealth holders, which is remarkable for a country with just 0.1% of the world’s population. Over two-thirds of Swiss adults have assets above USD 100,000, and 8.8% are US dollar millionaires. An estimated 2,780 individuals are in the UHNW bracket, with wealth over USD 50 million, and 1,070 have net worth exceeding USD 100 million.

    Country summary 2017:

    • Population: 8 million
    • Adult population: 7 million
    • GDP: USD 98,395 per adult
    • Mean wealth: USD 537,599 per adult
    • Median wealth: USD 229,059 per adult
    • Total wealth: USD 3.6 trillion
    • US dollar millionaires: 594 thousand
    • Top 10% of global wealth holders 5,238 thousand
    • Top 1% of global wealth holders: 820 thousand

    Australia

    Household wealth in Australia grew at a fast pace between 2000 and 2012 in US dollar terms, except for a short interruption in 2008. The average annual growth rate of wealth per adult was 12%, with about half the rise due to exchange-rate appreciation against the US dollar. The exchange rate effect went into reverse for three years after 2012 and, like other resource-rich countries, Australia was badly hit by sagging commodity prices. Despite that slowdown, Australia’s wealth per adult in 2017 is USD 402,600, the second highest in the world after Switzerland.

    The composition of household wealth in Australia is heavily skewed towards non-financial assets, which average USD 303,200, and form 60% of gross assets. The high level of real assets partly reflects a large endowment of land and natural resources relative to population, but also results from high property prices in the largest cities.

    Wealth inequality is relatively low in Australia, as reflected in a Gini coefficient of just 65% for wealth. Only 5% of Australians have net worth below USD 10,000. This compares to 19% in the UK and 29% in the USA. Average debt amounts to 20% of gross assets. The proportion of those with wealth above USD 100,000, at 68%, is the fourth highest of any country, and almost eight times the world average. With 1,728,000 people in the top 1% of global wealth holders, Australia accounts for 3.5% of this top slice, despite being home to just 0.4% of the world’s adult population.

    Country summary 2017:

    • Population: 24 million
    • Adult population: 18 million
    • GDP: USD 71,403 per adult
    • Mean wealth: USD 402,603 per adult
    • Median wealth: USD 195,417 per adult
    • Total wealth: USD 7.3 trillion
    • US dollar millionaires: 1,160 thousand
    • Top 10% of global wealth holders: 13,146 thousand
    • Top 1% of global wealth holders: 1,728 thousand

    USA

    The US economy and its financial markets continued to perform well in 2016–2017, leading to a ninth successive year of rising wealth. An important driver for a number of years was the Fed’s quantitative easing, yielding low interest rates that raised bond prices and contributed to economic recovery and higher stock prices. In the past year, business and market conditions have strengthened further, in spite of somewhat higher interest rates, in part due to the prospect of financial stimulus, deregulation and lower tax rates proposed by the president.

    Average wealth was USD 211,000 in 2000, and rose fairly steadily until 2006, before falling during the global financial crisis. Wealth per adult has now fully recovered, and is 30% above the 2006 level. There is some uncertainty about future interest rates and stock market prospects, but otherwise the signs are mostly positive for household wealth.

    The USA has a high proportion of assets (71%) reported as financial, partly because it includes business equity wholly as a financial asset. Adopting the more usual procedure of treating unincorporated enterprises as part of the household sector, the share would be around 63%, which is still relatively high. This reflects the fact that, compared with many other OECD (Organisation for Economic Co-operation and Development) countries, the USA has more economic activity in the private relative to the public sector. The USA also has more outward foreign investment. Debts of USD 60,200 per adult are not extreme by international standards.

    US wealth distribution has a high fraction of adults with wealth above USD 100,000 compared to the world as a whole. The percentage of people with wealth at higher levels is even more striking. The USA has the most members of the top 1% global wealth group, and currently accounts for 43% of the world’s millionaires. The number of UHNWIs with wealth above USD 50 million is four times that of the next country, China.

    Country summary 2017

    • Population 323 million
    • Adult population 241 million
    • GDP USD 78,483 per adult
    • Mean wealth USD 388,585 per adult
    • Median wealth USD 55,876 per adult
    • Total wealth USD 93.6 trillion
    • US dollar millionaires 15,356 thousand
    • Top 10% of global wealth holders 107,708 thousand
    • Top 1% of global wealth holders 19,134 thousand.

     
    Credit Suisse Research Institute, “Global Wealth Report 2017“, 15 Nov 2017 Report

    flag_australia AU: Australian Marriage Law Postal Survey, 2017

    Press Release Extract [ser_au_ssm]

    All states and territories recorded a majority Yes response. Of the 150 Federal Electoral Divisions, 133 recorded a majority Yes response, and 17 Federal Electoral Divisions recorded a majority No response.

    12,727,920 million people participated in the voluntary survey – representing 79.5 per cent of the more than 16 million eligible Australians – with 61.6% voting Yes and 38.4% voting no.

    Australian Bureau of Statistics, “800.0 Australian Marriage Law Postal Survey, 2017“, 15 Nov 2017 More

    flag_australia AU: Wage Price Index, Australia, Sep 2017

    Press Release Extract [ser_au_wages]

    The seasonally adjusted Wage Price Index (WPI) rose 0.5 per cent in the September quarter 2017 and 2.0 per cent over the year, according to figures released today by the Australian Bureau of Statistics (ABS).

    The WPI, seasonally adjusted, has recorded quarterly wages growth in the range of 0.4 to 0.6 per cent for the last 13 quarters (from the June quarter 2014).

    ABS Chief Economist Bruce Hockman said: “Annual wages growth increased marginally to 2.0 per cent in the September quarter 2017. The higher wage growth in the September quarter was driven by enterprise agreement increases, end of financial year wage reviews and the Fair Work Commission’s annual minimum wage review.”

    Seasonally adjusted, private sector wages rose 1.9 per cent and public sector wages grew 2.4 per cent through the year to the September quarter 2017.

    In original terms, through the year wage growth to the September quarter 2017 ranged from 1.2 per cent for the Mining industry to 2.7 per cent for Health care and social assistance and Arts and recreation services.

    Western Australia recorded the lowest through the year wage growth of 1.3 per cent and Victoria, Queensland and Tasmania the highest of 2.2 per cent.

    Australian Bureau of Statistics, “6345.0 – Wage Price Index, Australia, Sep 2017“, 15 Nov 2017 More

    flag_europe EU: International Trade in Goods. Sep 2017

    Press Release Extract [ser_eu_trade]

    Euro area The first estimate for euro area (EA19) exports of goods to the rest of the world in September 2017 was €187.1 billion, an increase of 5.6% compared with September 2016 (€177.2 bn). Imports from the rest of the world stood at €160.7 bn, a rise of 5.1% compared with September 2016 (€152.9 bn). As a result, the euro area recorded a €26.4 bn surplus in trade in goods with the rest of the world in September 2017, compared with +€24.3 bn in September 2016. Intra-euro area trade rose to €157.6 bn in September 2017, up by 4.9% compared with September 2016.

    eu_trade_20171115

    European Union The first estimate for extra-EU28 exports of goods in September 2017 was €156.8 billion, up by 6.3% compared with September 2016 (€147.4 bn). Imports from the rest of the world stood at €153.7 bn, up by 3.2% compared with September 2016 (€149.0 bn). As a result, the EU28 recorded a €3.1 bn surplus in trade in goods with the rest of the world in September 2017, compared with a deficit of €1.6 bn in September 2016. Intra-EU28 trade rose to €287.8 bn in September 2017, +4.9% compared with September 2016.

    eu_eu28_trade_20171115

    In January to September 2017, extra-EU28 exports of goods stood at €1 390.3 bn (an increase of 9.0% compared with January-September 2016) and imports at €1 382.9 bn (an increase of 8.6% compared with January-September 2016). As a result, the EU28 recorded a surplus of €7.4 bn, compared with +€3.1 bn in January-September 2016. Intra-EU28 trade rose to €2 483.5 bn in January-September 2017, +7.0% compared with January-September 2016.

    Eurostat, “Sep 2017: Euro area international trade in goods surplus €26.4 bn, €3.1 bn surplus for EU28” 15 Nov 2017 More

    flag_usa US: Retail and Food Services Sales. Oct 2017 (Advance)

    Press Release Extract [ser_us_retail]

    Advance Estimates of U.S. Retail and Food Services

    Advance estimates of U.S. retail and food services sales for October 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $486.6 billion, an increase of 0.2 percent (±0.5 percent) from the previous month, and 4.6 percent (±0.7 percent) above October 2016. Total sales for the August 2017 through October 2017 period were up 4.3 percent (±0.5 percent) from the same period a year ago. The August 2017 to September 2017 percent change was revised from up 1.6 percent (±0.5 percent) to up 1.9 percent (±0.2 percent).

    us_retail_20171115

    Retail trade sales were up 0.2 percent (±0.5 percent) from September 2017, and were up 4.7 percent (±0.7 percent) from last year. Building Materials and Garden Equipment and Supplies Dealers were up 8.8 percent (±2.1 percent) from October 2016, while Gasoline Stations were up 7.5 percent (±1.4 percent) from last year.

    US Census Bureau, “Sep 2017: Advance Monthly Sales For Food and Retail Services, October 2017” 15 Nov 2017 More

    flag_usa US: Consumer Price Index (CPI). Oct 2017

    Press Release Extract [ser_us_cpi]

    The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent in October on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.0 percent.

    us_cpi_20171115_month

    us_cpi_20171115

    The shelter index increased 0.3 percent and was the main factor in the seasonally adjusted all items increase. The energy index fell, as a decline in the gasoline index outweighed increases in other energy component indexes. The food index was unchanged over the month.

    The index for all items less food and energy increased 0.2 percent in October. In addition to the shelter index, the indexes for medical care, used cars and trucks, tobacco, education, motor vehicle insurance, and personal care were among those that increased. The indexes for new vehicles, recreation, and apparel all declined.

    The all items index rose 2.0 percent for the 12 months ending October, a smaller increase than the 2.2- percent increase for the period ending September. The index for all items less food and energy rose 1.8 percent over the past year, a slightly larger increase compared to the 1.7-percent increase for the 12 months ending September. The energy index increased 6.4 percent over the last 12 months, and the index for food rose 1.3 percent.

    Food

    The food index was unchanged in October following slight increases in August and September. The index for food at home was unchanged for the second month in a row. Among the major grocery store food group indexes, the index for meats, poultry, fish, and eggs was the only one to rise, increasing 0.6 percent after a decline in September. The increase was largely caused by the index for eggs, which increased 6.7 percent; the index for beef declined 0.8 percent.

    The index for cereals and bakery products fell 0.5 percent, its largest decline since November 2015. The indexes for dairy and related products and for other food at home also declined in October. The indexes for fruits and vegetables and for nonalcoholic beverages were both unchanged in October.

    The index for food at home rose 0.6 percent over the past year. The index for meats, poultry, fish, and eggs rose 1.5 percent over the span. The indexes for cereals and bakery products and for dairy and related products both declined over the past year. The index for food away from home rose 0.1 percent in October and increased 2.3 percent over the past year.

    Energy

    The energy index decreased 1.0 percent in October following increases in August and September. The gasoline index, which rose 13.1 percent in September, fell 2.4 percent in October. (Before seasonal adjustment, gasoline prices decreased 5.4 percent in October.) The electricity index increased in October, rising 0.5 percent, and the index for natural gas rose 0.3 percent in October after falling in each of the last four months.

    All the major energy component indexes rose over the past 12 months. The gasoline index increased 10.8 percent, the index for natural gas advanced 3.2 percent, and the electricity index increased 2.0 percent.
    All items less food and energy

    The index for all items less food and energy increased 0.2 percent in October after a 0.1-percent increase in September. The shelter index rose 0.3 percent, with the indexes for rent and owners’ equivalent rent also rising 0.3 percent. The index for lodging away from home continued to increase, rising 1.6 percent. The medical care index rose 0.3 percent, with the index for hospital services rising 0.5 percent and the physicians’ services index increasing 0.2 percent. However, the index for prescription drugs declined 0.2 percent.

    The index for used cars and trucks rose in October, increasing 0.7 percent; this ended a streak of nine consecutive declines. The tobacco index rose in October, increasing 1.6 percent. The education index increased 0.3 percent, and the index for wireless telephone services rose 0.4 percent. The indexes for personal care, airline fares, and motor vehicle insurance also increased in October.

    The index for new vehicles continued to decline, falling 0.2 percent in October after a 0.4-percent decrease in September. The index for apparel declined 0.1 percent in October, the same decline as in September; the recreation index also fell 0.1 percent. The index for household furnishings and operations was unchanged in October after declining in 5 of the 6 prior months.

    The index for all items less food and energy rose 1.8 percent over the past 12 months. The shelter index rose 3.2 percent over that span; the 12-month increase in the shelter index has now been either 3.2 or 3.3 percent for 6 months in a row. The index for motor vehicle insurance increased 8.2 percent over the past 12 months, but several transportation indexes declined over the span, including new vehicles, used cars and trucks, and airline fares.

    Not seasonally adjusted CPI measures

    The Consumer Price Index for All Urban Consumers (CPI-U) increased 2.0 percent over the last 12 months to an index level of 246.663 (1982-84=100). For the month, the index decreased 0.1 percent prior to seasonal adjustment.

    The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 2.1 percent over the last 12 months to an index level of 240.573 (1982-84=100). For the month, the index decreased 0.2 percent prior to seasonal adjustment.

    The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 1.9 percent over the last 12 months. For the month, the index decreased 0.1 percent on a not seasonally adjusted basis. Please note that the indexes for the past 10 to 12 months are subject to revision.

    Bureau of Labor Statistics, “Consumer Price Index. Oct 2017” 15 Nov 2017 (08:30) More

    Press Comment: Bloomberg

    The U.S. economy delivered a double win for the Federal Reserve in Oct 2017 with an encouraging pickup in inflation and an unexpected gain in retail sales, further solidifying expectations that policy makers will raise interest rates next month.

    The consumer-price index excluding food and fuel accelerated on an annual basis for the first time since Jan 2017, while the overall cost of living rose in line with forecasts. The rise in retail sales in Oct 2017 followed a bigger Sep 2017 advance than previously estimated.

    Together, the reports are “a reflection on the fairly solid economic environment we’re currently enjoying. Inflation is moving closer to the Fed’s target on the core. A December rate hike seems fairly certain, and justifiable,” and “the outlook for consumer spending looks good,” said Russell Price, senior economist at Ameriprise Financial Inc. in Detroit.

    Investors on Wednesday saw a 93% chance of a Fed interest-rate increase in Dec 2017, up from 91% yesterday. U.S. stocks and yields on 10-year Treasuries were lower as new obstacles emerged on a tax plan.

    Higher costs for shelter, medical care, air fares and used vehicles produced a broad-based advance in core CPI, signaling businesses may get more pricing power over time.

    While the price gains also helped to boost retail sales — since those data aren’t adjusted for inflation — demand looked resilient heading into the holiday shopping season as consumers purchased more furniture, electronics and clothing, and spent at restaurants.

    The CPI data will help inform policy makers on where inflation stands vis-a-vis their projections, though the Fed’s preferred gauge is a separate figure based on consumer purchases and issued by the Commerce Department. That measure has matched or exceeded the Fed’s 2% goal in just 2 months of the past 5 years. Some central bank officials focus on the measure excluding food and energy, which is also below their target. Oct 2017 data are due 30 Nov 2017.

    Nonetheless, the latest report offered more evidence that the cost of living is moving in the right direction, after Fed officials began to question long-held assumptions that low unemployment would cause inflation to accelerate.

    Housing costs were a significant factor in Oct 2017, with the shelter index climbing 0.3%. That included a 1.6% increase in lodging away from home and a 0.3% increase in owners’ equivalent rent, one of the categories designed to track rental prices. Expenses for medical care climbed 0.3%, and used-vehicle prices rose 0.7%, ending a 9 month streak of declines.

    Prices for wireless-phone services and hotel stays both increased. In recent months, several Fed officials have cited changes in these costs as transitory factors affecting inflation. At the same time, a 1% drop in energy prices weighed on overall inflation in Oct 2017, and costs for new vehicles, apparel and recreation showed declines.

    While a Dec 2017 rate increase by the Fed would be the third this year, inflation data in coming months will also play a role in the timing and number of rate increases in 2018, when Jerome Powell is set to take over as central bank chairman from Janet Yellen. Officials in Dec 2017 will update their projections for the benchmark interest rate, after September forecasts showed a median forecast of three quarter-point hikes next year.

    The latest sales figures also bode well for retailers gearing up for the holiday season. 9 of 13 major retail categories showed month-over-month increases in the value of sales, indicating American consumers will continue to fuel the economy in the fourth quarter, helped by steady hiring and an increased wealth effect from soaring stock prices and higher property values.

    “As long as a robust labor market is generating sizable income gains, the consumer should remain on a solid track,” Stephen Stanley, chief economist at Amherst Pierpont Securities, said in a note.Bloomberg

    flag_usa US: Real Earnings. Oct 2017

    Press Release Extract [ser_realer]

    All employees

    Real average hourly earnings for all employees decreased 0.1 percent from September to October, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. This result stems from no change in average hourly earnings combined with a 0.1-percent increase in the Consumer Price Index for All Urban Consumers (CPI-U).

    Real average weekly earnings decreased 0.1 percent over the month due to the decrease in real average hourly earnings combined with no change in the average workweek.

    Real average hourly earnings increased 0.4 percent, seasonally adjusted, from October 2016 to October 2017. The increase in real average hourly earnings combined with no change in the average workweek resulted in a 0.4-percent increase in real average weekly earnings over this period.

    Production and nonsupervisory employees

    Real average hourly earnings for production and nonsupervisory employees decreased 0.1 percent from September to October, seasonally adjusted. This result stems from no change in average hourly earnings combined with a 0.1-percent increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

    Real average weekly earnings increased 0.2 percent over the month due to the decrease in real average hourly earnings combined with a 0.3-percent increase in average weekly hours.

    From October 2016 to October 2017, real average hourly earnings increased 0.3 percent, seasonally adjusted. The increase in real average hourly earnings combined with a 0.3-percent increase in the average workweek resulted in a 0.5-percent increase in real average weekly earnings over this period.

    Bureau of Labor Statistics, “Real Earnings. Oct 2017” 15 Nov 2017 (08:30) More

    flag_usa US: Manufacturing and Trade Inventories and Sales. Sep 2017

    Press Release Extract [ser_us_mtis]

    Sales

    The combined value of distributive trade sales and manufacturers’ shipments for September, adjusted for seasonal and trading-day differences but not for price changes, was estimated at $1,389.7 billion, up 1.4 percent (±0.2 percent) from August 2017 and was up 6.4 percent (±0.4 percent) from September 2016.

    us_mtis_20171115

    Inventories

    Manufacturers’ and trade inventories, adjusted for seasonal variations but not for price changes, were estimated at an end-of-month level of $1,888.7 billion, virtually unchanged (±0.1 percent) from August 2017, but were up 3.5 percent (±0.3 percent) from September 2016.

    Inventories/Sales Ratio

    The total business inventories/sales ratio based on seasonally adjusted data at the end of September was 1.36. The September 2016 ratio was 1.40.

    US Census Bureau, “Manufacturing and Trade Inventories and Sales. Sep 2017” 15 Nov 2017 (10:00) More

    flag_japan Japan update

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    JPY movements
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    flag_china China update

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    CNY movements
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    CSI300 movements
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