Below is an example of note-taking I do every day to get a sense of what is going on around the world. It is extremely important to condense as much information as possible especially with the huge amount of information exchanging hands every day.
Economic Data Releases
Technical Notes:
-Market correlations continue to break down as stocks try to rise with the dollar along with oil and metals falling.
-Bonds are lower along with stocks.
Economic Notes:
United States
– Gross domestic product climbed at a 1.7 percent annual rate from April through June, up from an initial estimate of 1.5 percent, revised Commerce Department figures showed today in Washington. The figure followed a 2 percent first-quarter pace and matched the median estimate in a Bloomberg survey. The revised data also showed companies invested in new equipment at the weakest pace in almost three years.
– The index of pending home resales climbed 2.4 percent, exceeding the 1 percent gain median forecast of 39 economists surveyed by Bloomberg News, figures from the National Association of Realtors showed. The gauge rose to 101.7, the highest since April 2010. HOUSING RECOVERY
– Consumer spending, about 70 percent of the economy, climbed at a 1.7 percent annual rate, the weakest in a year and revised from a 1.5 percent initial estimate. Purchases added 1.2 percentage points to growth.
– Wages and salaries in the second quarter rose by $56.1 billion, less than the $56.4 billion initially reported. That compares with a revised $133.5 billion first-quarter gain that was bigger than the previous estimate of $123.3 billion.
– At the same time, consumers’ purchasing power eased, with disposable income adjusted for inflation rising 3.1 percent from April through June after a 3.7 percent gain in the first quarter. The saving rate in that period climbed to 4 percent from 3.6 percent in January through March.
– The revision reflected the biggest gain in spending on services since the fourth quarter of 2006. The largest contributor came from more spending on electricity and gas as temperatures across the country approached record highs.
– On the business side, today’s report offered a first look at corporate profits. Before-tax earnings rose at a 0.5 percent rate, after falling 2.7 percent in the prior period. They climbed 6.1 percent from the same time last year.
– Investment by businesses slowed last quarter. Corporate spending on equipment and software rose at a 4.7 percent pace, the weakest since the third quarter of 2009. The second-quarter pace was less than the previously estimated 7.2 percent rate and compared with a 5.4 percent increase in the previous quarter.
– International trade held up in the second quarter, indicating weaker global growth had yet to slow demand for goods produced in the U.S. Net exports, which initially subtracted from growth, contributed 0.32 percentage points to GDP, the revision showed.
–Bernanke may shed light on monetary policy in a speech to central bankers on Aug. 31 in Jackson Hole, Wyoming. The U.S. economy expanded more than previously estimated in the second quarter, reflecting an improvement in the trade deficit and a pickup in household spending on utilities. Americans signed more contracts to purchase previously owned homes in July, a sign housing will keep strengthening in the second half.
– Trucking companies are failing to show the kind of growth typical of an expanding U.S. economy, according to Christian Wetherbee, a Citigroup Inc. analyst.
Europe
–Italy’s credit is as good as it has been in three months, according to a decline in 10-year bond yields. Short-term rates have fallen too. Monti’s Treasury sold six-month bills today at the lowest rate since March. “Monti’s arguments have more force when yields are spiking in spite of the fact that his government has implemented a number of credible reforms,” said Mujtaba Rahman, an analyst at Eurasia Group in New York. “It is at this moment when his argument carries more thrust with the Germans.”
– Monti said he may request bond buying to bring down funding costs, while seeking to limit any conditions the European Union would try to impose.
-The pressure on Monti has eased since July thanks to pledges of support for future EU bond-buying efforts from Draghi and the German government’s diminishing opposition to bond- market intervention by the central bank.
-Italy sold 181-day bills at 1.585 percent today, down from 2.454 percent at the last sale of similar-maturity debt on July 27. Investors bid 1.69 times the amount of bills offered, up from 1.61 times last month. Italy sold 3 billion euros of zero-coupon 2014 debt yesterday to yield 3.064 percent, down from 4.86 percent at the previous auction on July 26, as investors bid for 1.95 times the amount offered, compared with 1.78 times last month.
-INVESTORS FEEL COMFORTABLE SPECULATING IN SHORT-TERM ITALIAN DEBT
-The ECB may use its funds to lower yields if Italy and Spain request such aid, Draghi has said. The central banker is expected to give details of the bond-buying plan and possibly lay out what type of conditions the ECB would demand in return when the GOVERNING COUNCIL MEETS ON SEPT. 6.
-Still, Bundesbank President Jens Weidmann this week reiterated his opposition to ECB bond buying, saying in an interview with Der Spiegel that it “can become addictive like a drug.”
–Bringing down funding costs is critical for Italy, which has a debt of almost 2 trillion euros ($2.5 trillion), the euro- region’s second biggest in nominal terms after Germany.
– Today’s 9 billion-euro auction of six-month bills precedes the sale of as much as 7.5 billion euros of five and 10-year bonds tomorrow.
– Merkel was persuaded at a June 28-29 meeting of euro-area leaders to allow Monti’s push to grant the region’s bailout funds more flexibility in coming to the aid of nations like Spain and Italy, who are bringing down their deficits and still facing high financing costs.
Support for Merkel has been increasing in Germany as European leaders prepare for what the chancellor called a “decisive phase” in their crisis fighting efforts.
– German Chancellor Angela Merkel said Thursday she is confident that Italy’s reform drive will help push down the country’s borrowing costs, but underlined her resistance to another idea that could drive them lower — giving the region’s permanent rescue fund a banking license.
– Parties in Greece’s coalition government have reached broad agreement on a major new austerity package demanded by the country’s creditors but are still negotiating over the fine print, the country’s finance minister said Wednesday. Yannis Stournaras said officials from the three parties in the conservative-led coalition would hold further talks to settle remaining “technical” issues.
Marchese Financial 