May 13. Retailer results haven’t been good…apart from AMZN

–Retail Sales today.  I haven’t determined any correlation, but recall that the latest Consumer Credit report for March was a blockbuster, with revolving credit +14.2% and total at +10%.  In the months of both March and April, crude oil was pushing higher.  Auto sales released earlier in the month were a strong 17.4 million annual rate.  However, retailers (outside of AMZN) have been smacked.  Expectations are +0.8 for headline, +0.5 ex-auto, +0.3 ex-auto and gas. One anecdotal note, we had a credit account hacked in the past two weeks, with bogus purchases of several thousand dollars.  Apparently, the new chipped cards are in some ways more vulnerable to hackers, though I don’t know if that had anything to do with it.  Charges have been reversed, but I wonder if initial charges (in aggregate) still show up in the credit data.  PPI expected +0.3 and +0.1 Core.
–Speaking of credit, loan growth slowed in China from a blistering Q1 pace. (Reuters) “Data at the end of the Chinese trading day showed banks extended just 555.6 billion yuan ($85.22 billion) in net new yuan loans in April, well below analysts’ expectations and less than half the 1,370 billion yuan reported in March.”
–Heavy buying in the past few days of TYM 130.5 puts.  Expire in one week, yesterday settled 19 vs 130-19.  Open interest in the puts jumped 27k yesterday to 70k, the largest put strike outside of 128p with 93k.  However, these purchase were absorbed, as was the 30 yr bond auction, and TY futures are higher this morning as equities falter. 2/10 treasury spread edged to a new recent low just below 100 bps.

From the Washington Post: “The Federal Reserve is a vital institution for our economy and the well-being of our middle class, and the American people should have no doubt that the Fed is serving the public interest,” [Clinton] spokesman Jesse Ferguson said. “That’s why Secretary Clinton believes that the Fed needs to be more representative of America as a whole and that commonsense reforms — like getting bankers off the boards of regional Federal Reserve banks — are long overdue.”  In a roundabout way, that’s a tacit endorsement of Trump.  Get bankers out of Fed banks, and get politicians out of politics.

Posted on May 13, 2016 at 5:20 am by alexmanzara · Permalink
In: Eurodollar Options

Leave a Reply