==US business activity cools in April; inflation measures mixed (and some Bidness news)
S. business activity cooled in April to a four-month low due to weaker demand, while rates of inflation eased slightly even as input prices rose sharply, suggesting some possible relief ahead as the Federal Reserve looks for signs that the economy is ebbing enough to bring inflation down further.
S&P Global said on Tuesday that its flash U.S. Composite PMI Output Index, which tracks the manufacturing and services sectors, fell to 50.9 (of course staying above the all important 50) this month from 52.1 in March. A reading above 50 indicates expansion in the private sector. The slowdown reflected weaker rates of growth in both the manufacturing and services sectors, with activity easing to three- and five-month lows, respectively. That in turn meant employment, which the Fed is watching closely for indications of a drop off, fell for the first time since June 2020, with the reduction focused on services.
The survey suggested that the economy lost momentum at the beginning of the second quarter compared to the January-March quarter. According to a Reuters survey of economists, GDP likely increased at a 2.4% annualized rate last quarter. (this the hilarious Atlanta FED GFPNOW that gets updated tomorrow)
The Fed has recently been spooked by a string of stronger-than-expected inflation and employment readings, which suggested its fight to bring inflation back down to the central bank's 2% target rate has stalled or even reversed.
The Fed meets next week and is expected to leave its policy rate unchanged in the current 5.25%-5.50% range. Last week, a chorus of Fed officials backed away from signaling at least one rate cut this year, instead saying only that recent data meant monetary policy needs to be restrictive for longer.(They’ve already signaled last year that the fake 3% is the acceptable rate cuz it ain’t getting nowhere near that much less the 2% pipe dream)
The S&P Global survey's measure of new orders received by private businesses dropped to 48.4 from 51.7 in March, the first decline in six months, while its measure of prices paid for inputs declined to 56.5, off the six-month high of 58.7 reached in March but still a solid rate. The output prices gauge fell to 54.1, off the ten-month high of 56.4 recorded in March, but also still elevated.
In a reversal of trends seen last year when wage-related services sector price pressures intensified while manufacturing input costs cooled,higher raw material and fuel prices resulted in the fastest rise in manufacturing input costs in a year in April, with manufacturing now recording steeper inflation increases in three of the past four months. Service providers, by contrast, reported the second-lowest overall cost increase in three and half years.
https://www.reuters.com/markets/us/us-business-activity-cools-april-inflation-measures-mixed-2024-04-23/
Treasury yields fall after S&P surveys show U.S. economy losing some momentum
U.S. Treasury yields fell Tuesday as investors parsed fresh manufacturing data and awaited further insight into the state of the economy from reports due out later in the week.
The yield on the 10-year Treasury was down by less than 3.9 basis points to 4.584%. The yield on the 2-year Treasury was last at 4.937% after rising by 3.4 basis points.
https://www.marketwatch.com/story/treasury-yields-steady-near-highs-of-the-year-as-traders-eye-fresh-catalysts-7ebcdcd2
U.S. crude oil steadies at $82 a barrel as slowing manufacturing raises interest rate cut hopes
https://www.cnbc.com/2024/04/23/crude-oil-prices-today.html
Buy All The Things' - Dismal Data Lifts Rate-Hike Odds As Markets Ignore Price-Pressures
https://www.zerohedge.com/markets/buy-all-things-dismal-data-lifts-rate-hike-odds-markets-ignore-price-pressures
New Home Sales Increase to 693,000 Annual Rate in March; Median New Home Price is Down 13% from the Peak
https://www.calculatedriskblog.com/2024/04/new-home-sales-increase-to-693000_23.html
People in China are so spooked about the economy that even the weak yuan isn't stopping them from buying more gold
https://www.businessinsider.com/gold-price-china-consumers-central-bank-pboc-economy-concerns-dedollarization-2024-4
CME FEDwatch has June rate stability probability at 83% and 25bp cut at 16%
Cap 3
https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html
ZERO bounce from yesterday’s PM sell off
https://www.kitco.com/charts/gold
https://www.kitco.com/charts/silver
Energy
https://tradingeconomics.com/commodities