May 8. Consumer credit deceleration

–Late profit taking turns in both crude oil and stocks after Trump tweeted “I will be announcing my decision on the Iran Deal tomorrow [Tuesday] from the White House at 2:00 p.m.”  Oil slipped back below 70 and stocks ceded a few points as well.  The opening of the US Embassy in Jerusalem in one week, May 14, is another possible flashpoint.
–Light volume yesterday with no euro$ contract trading over 100k.  Yields were nearly unchanged, edging higher by 1 bp or less across the curve.  Treasury kicks off the auction cycle with threes today.

–Consumer Credit yesterday showed an increase of just $11.6b, below expectations of $15b.  Although this is likely just payback from storm induced buying last year, revolving credit has declined for the past 2 months, -0.6 in Feb and -3.0 in March.   Pretty ominous signal if it continues.  The total growth (including non-revolving autos and school loans) was 3.6% but that is showing deceleration as well.  In Q4 the rate was 6.9%, in January 4.7, Feb 4.3 and March 3.6.

–AAPL had a gap open to new highs yesterday as the public jumped on Buffet’s bandwagon.  However, I would note that Buffet said he would by more ‘at the right price’, which probably doesn’t mean new highs.  AAPL closed on its low on light volume, and left a gap from 184.25 to 184.75.  It appears likely that there will be a gap open lower today, leaving a potential island top. 

 

Posted on May 8, 2018 at 6:41 am by alexmanzara · Permalink
In: Eurodollar Options

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