Global Macro Monitor

Market Dances to the Tweet of a Cantor

Posted on December 27, 2012 by macromon

Nice reversal!

House Majority Leader, Eric Cantor, may not be able to move votes, but he certainly moved the market and gave investors a nice Christmas tweet at 3:05 pm today.

The House will return for legislative business on Sunday, December 30. First votes are expected at 6:30 p.m.
— Eric Cantor (@EricCantor) December 27, 2012

Not expecting anything big, however. Just a bridge to the real battle that will take place after the 113th Congress convenes at noon on January 3rd.

The market did have its Jackie Moon moment today so we’re expecting a better bid into the New Year. It’s a traders market. The S&P 500 has gotta hold today’s low at 1,401.80.

(click here if chart is not observable)

Posted in Fiscal Cliff Monitor, Fiscal Policy | Tagged Eric Cantor, Reversal, tweet | 1 Comment

China’s Economic Glide Path

Posted on December 27, 2012 by macromon

The Economist out with an interesting piece on China’s economic growth.

China faces a more sober economy in 2013

TO ITS many critics, the momentum of China’s economy is sustained by nothing but an outpouring of investment in plant, infrastructure and property. This appears profitable only because each round of investment creates demand for the products of the previous round. If this investment stopped flowing, China’s economy would fall to earth. In 2012 China’s flow of investment did gurgle and spit, especially in housing. The result was a marked economy-wide slowdown. In 2013 growth should stabilise, as investment resumes, and the biggest driver of growth may be the consumer. But growth will not rebound to the 10% annual average presided over by Hu Jintao and Wen Jiabao during their ten years as president and prime minister. China’s new leaders will inherit an economy capable of more like 7-8% a year. This loss of dynamism is inevitable: as economies progress, their rate of advance always slows. See full article.

(click here if chart is not observable)

Posted in China | Tagged China, Economist, Economy, GDP, Growth | Leave a comment

…Just Like the Titanic, But It’s Full of Bears!

Posted on December 27, 2012 by macromon

Tonight’s Politico headline, Fiscal cliff deal increasingly unlikely.

The Secretary of the Treasury announces after today’s market close the U.S. government will hit its debt limit on New Year’s Eve and will be forced to take emergency measures to avoid defaulting on obligations.

The VIX ended today at its highest closing level since July 24th, up over 26 percent from its December 18th low.

Nobody around and nobody cares.

Are markets setting up for a Jackie Moon moment? Just askin’.

Just make sure you do it before everyone else.

(click here if video is not observable)

Posted in Fiscal Cliff Monitor | Tagged Everybody Panic, Fiscal Cliff, Jackie Moon, Semi-Pro | Leave a comment

Perspectives on the U.S. Labor Market

Posted on December 26, 2012 by macromon

It’s year end and time for some perspective on the economy.

Let’s start with the U.S. labor market.

The employment to population ratio remains stuck at around 58.7 percent, levels not seen since the mid-1980’s. This is due to both structural factors, such as demographics and an increase in the population on disability, as well as cyclical influences.

Nonfarm payrolls have grown, on average, 154K per month in the first 11 months of 2012, down from 175K per month, last year.

The private sector has recovered about 58 percent of the 8.833 million jobs lost during the Great Recession. The goods producing sector, mainly, construction and manufacturing sectors, were hit disproportionately hard and have yet to fully recover. Construction, for example, is operating at only 74 percent of December 2007 levels. Hopes are high for construction hiring as the U.S. housing market recovers.

Conversely, the private service producing sector has fully recovered though with a much different profile and, unfortunately, in lower wage industries.

Source: Joint Economic Committee, U.S. Congress

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Posted in Employment | Tagged Construction, Jobs, Joint Economic Committee, Labor Market, manufacturing, U.S. employment | 2 Comments

‘Toon of the Day

Posted on December 25, 2012 by macromon

Hope all the GMM readers had a great holiday.

The ‘toon captures just about 100 percent of what the market will be focused on for the rest of the ~~week~~ year.

(click here if cartoon is not observable)

Posted in Cartoon of the Day, Fiscal Cliff Monitor | Tagged Cartoon, Fiscal Cliff | Leave a comment

CNET: Tech Trends of 2012

Posted on December 25, 2012 by macromon

(click here if video is not observable)

Posted in Technology | Tagged CNET, Technology, Trends | Leave a comment

Manufacturing Compensation Costs

Posted on December 25, 2012 by macromon

Nice charts from the BLS. Even though the big countries — China and India — it does give a a sense of the relative competitiveness of nations.

Chart 1 – Average hourly compensation costs in U.S. manufacturing, at $35.53 in 2011, ranked approximately in the middle among 33 countries examined by the U.S. Bureau of Labor Statistics.

Chart 2 – In addition to Norway ($64.15), Australia ($46.29), Canada ($36.56), Italy ($36.17), and Japan ($35.71), countries with hourly compensation costs in manufacturing that were higher than those experienced by the United States were primarily in northern and western Europe. Countries with lower hourly compensation costs were primarily in southern and eastern Europe, Asia, and Latin America. These countries included the United Kingdom ($30.77), Republic of Korea ($18.91), Brazil ($11.65), Taiwan ($9.34) and the Philippines ($2.01).

Between 1997 and 2011, compensation costs in manufacturing as a percent of U.S. costs increased or remained the same in all economies compared except Taiwan, improving U.S. cost competitiveness.