Fri, 26th May 2017

Anirudh Sethi Report


Posts Authored by: “Anirudh Sethi”

When Economists get news they don’t want to hear

The problem with predictions and ego

Pickup and economists research note from the past month and it’s likely to say the same thing — the Fed is going to hike in June.

Everyone is singing from the same hymnbook. The problem is that the Fed is the piano player and yesterday changed its tune. This is the line in the FOMC Minutes:

“Members generally judged that it would be prudent to await additional evidence indicating that the recent slowing in the pace of economic activity had been transitory before taking another step in removing accommodation.”

That can’t be misunderstood.

What it says is that if economic data continues to be soft, they’re not hiking in June.

That doesn’t mean that a hike is off the table but it certainly means that it’s not a sure thing.

Here are a few data points since the May 3 meeting:

  • Q1 nonfarm productivity -0.6% vs -0.1% exp
  • Factory orders +0.2% vs +0.4% exp
  • Nonfarm payrolls 211K vs 190K exp
  • Avg hourly earnings 2.5% vs 2.7% y/y exp
  • JOLTS 5743K vs 5725K exp
  • Core PPI +0.7% vs +0.2% exp
  • CPI +2.2% y/y vs +2.3% exp
  • Retail sales control group +0.2% vs +0.4%
  • Empire Fed -1.0 vs +7.5 exp
  • NAHB housing market index 70 vs 68 exp
  • Housing starts 1172K vs 1260K exp
  • Building permits 1229K vs 1270K exp
  • Industrial production +1.0% vs +0.4%

Overnight US Market : S&P ,Nasdaq sets another record (what’s new?).

S&P ends up 0.44%. Nasdaq up 0.69%

Yes…it is another record for US stocks today.
  • The S&P is ending up 0.44% to 2415.07. The high reached 2418.71. The low 2408.01
  • The Nasdaq is ending up 42.234 points or 0.69% to 6205.25. The high reached 6217.34. The low 6174.52
  • The Dow is closing up 21082.95. The high reached 21112.32.  The low 21051.41.  The index was up 0.34% (closed at 21082.95).

Algerian oil minister loses his job during the OPEC meeting

Algeria cabinet shuffle takes place during meeting

Algerian oil minister Noureddine Boutarfa was informed that he will be replaced midway through today’s OPEC meeting.

As part of broader cabinet changes, Boutarfa was replaced by Sonelgaz CEO Mustapha Guitouni as energy minister. The moves follow a May 4 election.

The change is a loss for OPEC as Boutarfa was seen as a mediator and dealmaker. He was pivotal in brokering the initial OPEC/non-OPEC deal.

Bitcoin Explodes, Trades Above $4,000 In South Korea

In recent weeks it has been Japanese demand (and notable premia) that has driven the exponential rise in Bitcoin, but recently, as CoinTelegraph reports, it has been South Korea. Overenight saw Bitcoin prices explode once again, smashing through $2500, $2600, and $2700 for the first time…

As CoinTelegraph.com reports, South Korean Bitcoin traders are facing asking prices of $4,500 as the virtual currency’s price continues to surge.

Order books from domestic exchange Coinone list a current price of 4,254,000 won ($3805), with a 24-hour high of 5,025,000 ($4494).

Bitcoin Live Orderbook

Iraq say there is a proposal being discussed for 9 month extension and deeper cuts on oil output deal

latest comments from the OPEC/non-OPEC meeting 25 May

  • Iraq prefers 9 month at existing levels of output cuts though

Oil prices firming on the headline and other firmer tones from today’s meting now underway.

WTI $51.85 after testing $52.00

Other comments also coming thick and fast ( no oil pun intended)

Saudi Arabia;

  • no oil output cap for Libya, Nigeria
  • does not see shale derailing what we do

Other comments to follow once I’ve got UK GDP out the way.

Medals from Rio Olympics are Rusting, Chipping Will Be Replaced

Kyle Snyder's damaged gold metal from the 2016 Rio Olympics on Tuesday, May 23, 2017, in Maryland.As the hyper-expensive – and now empty – sports venues built by Brazil for the 2016 Rio Summer Olympics rapidly deteriorate, many of the medals won by the athletes who participated are now revealed to be decaying as well.

Due to defective workmanship and low quality materials used in their manufacture, at least 130 medals from the 2016 Summer Olympics in Rio have been documented as decaying, rusting or chipping, according to USA Today.

“We’re seeing problems with the covering on between 6 or 7 percent of the medals,” conceded Rio Olympic Committee communications officer Mario Andrada, who added that, “it seems to do with the difference in temperatures.”

Andrada asserted that the decay was “completely normal,” observing that a mere 1.34 percent of an Olympic gold medal is actually gold, and affirming that some 30 percent of what is claimed to be sterling silver is actually recycled silver.

The spokesman suggested that Olympic committee-authorized manufacturing and material was not necessarily at fault, as many medals “were dropped or mishandled, and the varnish has come off and they’ve rusted or gone black in the spot where they were damaged.”