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Morning Notes For September 2nd 2010 at Trader’s Narrative




Morning Notes For September 2nd 2010


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The following is a guest post by a buy-side analyst working in a US asset management firm. The author’s comments are in italics. I welcome your feedback in the comments:

Initial Jobless Claims: Survey 475K Actual 472 Prior 473 Revised 478
initial jobless claims Aug 2010 update

  • August shipments grew 16.5% YoY, meaningfully accelerating from the 8.9% growth in July, with the 3-month moving average pushing up to 14.7% from 12.8% (in July). In other words, the levels of freight in the US grew faster YoY in August…countering those concerned that US economy decelerated further in August. We continue to view the current period of economic weakness as a “growth scare” rather than a double-dip. Recent ISM data is also supportive. But obviously, the labor report Friday would need to show continued improvement in hours worked to support this and hopefully, some positive labor growth as well. We still see a Beta rally in the Fall. – JPM Research

monthly cass freight index Aug 2010

  • China’s PMIs Signal a Moderation, Not a Hard Landing - Data collected by the Chinese Federation of Labor showed that the PMI rose slightly to 51.7 in August 2010 from 51.2 in July. The increase, which broke a three-month decline, is still close to the weakest recording in 18 months and well below the 55 average of late 2009 and early 2010 when China was expanding above potential. All subindexes have slowed, which indicates that the pace of expansion has cooled. – RGE Monitor
  • US Industrial Production Rises; Mixed Signals From Regional Surveys - The Institute for Supply Management manufacturing index showed expansion in activity for the 13th consecutive month in August 2010, following an 18-month period of contraction that lasted through July 2009. The pace of expansion in manufacturing rose for the first time in four months as the PMI rose to 56.3 from 55.5 in July, returning to its June level. The ISM index of manufacturing employment also indicated improving conditions. – RGE Monitor
  • ISM nonfarm payroll GDP comparison Aug 2010
    The thinking is that a stronger ISM could indicate that recent weakness is just a soft patch and GDP and payroll data will rebound accordingly.

  • Greece, Italy, Japan and Portugal are the advanced economies hovering closest to unsustainable levels of government debt – new IMF study – Bloomberg

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