There were a lot of reports this week:
- Retail Sales (RSAFS): +0.56% m/m, new all-time high.
- Industrial Production (INDPRO): +0.38% m/m; still below 2022 high.
- Producer Prices (PPIACO): 1.44% m/m; strong rise after 16 months of decline.
- CPI All Urban (CPIACUSL): +0.63% m/m; rise after 16 months of decline.
- Existing Home Sales (EXHOSLUSM495S): -2.21% m/m, down 40% from late-2020 peak.
- Strategic Petroleum Reserve (WCSSTUS1): +290k, +0.08% w/w.
- Total Bank Credit (TOTBKCR): -0.14% w/w, a new low for 2023.
- Fred Balance Sheet (WALCL): -2.5B (-0.03% w/w); a new 2-year low.
The report snapshot says, we see some retail inflation, credit is contracting (from banks & the Fed), and producer & CPI inflation may be returning, after falling for many months – even after the 18-month barrage of Fed rate increases (+525 basis points). It still feels to me like there are some banks that are in trouble, behind the scenes. Lastly – home sales are doing poorly, probably because the 30 year mortgage rate is now 7.18% – last seen back in 2002. “You Will Own Nothing” because MORTGAGE30US = 7.18%. “Happy” is all on you.
Crude oil broke 90 this week, rising 3.26 [+3.73%] to 90.77. As we know, crude is the master resource, and Oilprice.com gave some more reasons why the price continues to rocket higher (Source – oilprice). These include: OPEC reporting estimates of +2.25 mbpd demand increase for 2024, China reporting that manufacturing output grew +4.6% y/y, Libya was hit by a (geoengineered?) hurricane which shut down four export terminals, and the EU’s “carbon tax” is due to hit October 1 – among many others.
Note that this week’s SPR refill, microscopic though it might be, is still continuing. Can you imagine the effect on prices if they refilled it at the same astonishing rate at which they drained it? I’m definitely glad the “Senate Democrats” stopped Orange Hitler from refilling the SPR back at crude < $20 way back in 2020. For sure I wanted to buy oil at that same time, I just didn’t have an SPR to put it in.
by cmartenson