Monday: Personal Income and Outlays, ISM Mfg Survey, Construction Spending

Weekend:
• Schedule for Week of January 31, 2016

• January 2016: Unofficial Problem Bank list declines to 238 Institutions

Monday:
• At 8:30 AM ET, Personal Income and Outlays for December. The consensus is for a 0.3% increase in personal income, and for a 0.1% increase in personal spending. And for the Core PCE price index to increase 0.1%.

• At 10:00 AM, ISM Manufacturing Index for January. The consensus is for the ISM to be at 48.3, up from 48.2 in December.

• Also at 10:00 AM, Construction Spending for December. The consensus is for a 0.6% increase in construction spending.

• At 1:00 PM, Discussion, Fed Vice Chairman Stanley Fischer, Recent Monetary Policy, Council on Foreign Relations Event: C. Peter McColough Series on International Economics, New York, N.Y.

From CNBC: Pre-Market Data and Bloomberg futures: currently S&P futures are down 7 and DOW futures are down 60 (fair value).

Oil prices were up over the last week with WTI futures at $33.29 per barrel and Brent at $35.56 per barrel.  A year ago, WTI was at $45, and Brent was at $47 - so prices are down about 30% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $1.79 per gallon (down over $0.20 per gallon from a year ago).

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Schedule for Week of January 31, 2016

The key report this week is the January employment report on Friday.

Other key indicators include January vehicle sales, the January ISM manufacturing and non-manufacturing indexes, and the December trade deficit.

----- Monday, February 1st -----
8:30 AM ET: Personal Income and Outlays for December. The consensus is for a 0.3% increase in personal income, and for a 0.1% increase in personal spending. And for the Core PCE price index to increase 0.1%.

10:00 AM: ISM Manufacturing Index for January. The consensus is for the ISM to be at 48.3, up from 48.2 in December.

Here is a long term graph of the ISM manufacturing index.

The ISM manufacturing index indicated contraction at 48.2% in December. The employment index was at 48.3%, and the new orders index was at 49.2%.

10:00 AM: Construction Spending for December. The consensus is for a 0.6% increase in construction spending.

1:00 PM: Discussion, Fed Vice Chairman Stanley Fischer, Recent Monetary Policy, Council on Foreign Relations Event: C. Peter McColough Series on International Economics, New York, N.Y.

----- Tuesday, February 2nd -----
All day: Light vehicle sales for January. The consensus is for light vehicle sales to increase to 17.5 million SAAR in January from 17.2 million in December (Seasonally Adjusted Annual Rate).

This graph shows light vehicle sales since the BEA started keeping data in 1967. The dashed line is the December sales rate.

----- Wednesday, February 3rd -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:15 AM: The ADP Employment Report for January. This report is for private payrolls only (no government). The consensus is for 190,000 payroll jobs added in January, down from 257,000 in December.

10:00 AM: the ISM non-Manufacturing Index for January. The consensus is for index to be increased to 55.5 in January from 55.3 in December.

----- Thursday, February 4th -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 280 thousand initial claims, up from 278 thousand the previous week.

10:00 AM: Manufacturers' Shipments, Inventories and Orders (Factory Orders) for December. The consensus is a 2.8% decrease in orders.

----- Friday, February 5th -----
8:30 AM: Employment Report for January. The consensus is for an increase of 188,000 non-farm payroll jobs added in January, down from the 292,000 non-farm payroll jobs added in December.

The consensus is for the unemployment rate to be unchanged at 5.0%.

This graph shows the year-over-year change in total non-farm employment since 1968.

In December, the year-over-year change was 2.65 million jobs.

A key will be the change in real wages - and as the unemployment rate falls, wage growth should pickup.

8:30 AM: Trade Balance report for December from the Census Bureau.

This graph shows the U.S. trade deficit, with and without petroleum, through October. The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

The consensus is for the U.S. trade deficit to be at $43.0 billion in December from $42.4 billion in November.

3:00 PM: Consumer Credit for December from the Federal Reserve. The consensus is for an increase of $16.5 billion in credit.

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Philly Fed: State Coincident Indexes increased in 39 states in December

From the Philly Fed:

The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for December 2015. In the past month, the indexes increased in 39 states, decreased in seven, and remained stable in four, for a one-month diffusion index of 64. Over the past three months, the indexes increased in 41 states, decreased in seven, and remained stable in two, for a three-month diffusion index of 68.

Note: These are coincident indexes constructed from state employment data. An explanation from the Philly Fed:

The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.

Click on graph for larger image.

This is a graph is of the number of states with one month increasing activity according to the Philly Fed. This graph includes states with minor increases (the Philly Fed lists as unchanged).

In December, 41 states had increasing activity (including minor increases).

Five states have seen declines over the last 6 months, in order they are Wyoming (worst), North Dakota, Alaska, Montana, and Louisiana - mostly due to the decline in oil prices.

Here is a map of the three month change in the Philly Fed state coincident indicators. This map was all red during the worst of the recession, and is mostly green now.

Source: Philly Fed.

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Sichuan Lomon ups TiO2 prices for a second time in January

Rmb 300/tonne rise mirrors company’s early January increase.

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BEA: Real GDP increased at 0.7% Annualized Rate in Q4

From the BEA: Gross Domestic Product: Fourth Quarter and Annual 2015 (Advance Estimate)

Real gross domestic product -- the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes -- increased at an annual rate of 0.7 percent in the fourth quarter of 2015, according to the "advance" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 2.0 percent.
...
The increase in real GDP in the fourth quarter primarily reflected positive contributions from personal consumption expenditures (PCE), residential fixed investment, and federal government spending that were partly offset by negative contributions from private inventory investment, exports, and nonresidential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.

The deceleration in real GDP in the fourth quarter primarily reflected a deceleration in PCE and downturns in nonresidential fixed investment, in exports, and in state and local government spending that were partly offset by a smaller decrease in private inventory investment, a deceleration in imports, and an acceleration in federal government spending.
emphasis added

The advance Q4 GDP report, with 0.7% annualized growth, was below expectations of a 0.9% increase.

Personal consumption expenditures (PCE) increased at a 2.2% annualized ratein Q4, down from 3.0% in Q3.   Residential investment (RI) increased at a 8.1% pace. However equipment investment decreased at a 2.5% annualized rate, and investment in non-residential structures decreased at a 5.3% pace (due to the decline in oil prices).

The key negatives were investment in inventories (subtracted 0.45 percentage point), trade (subtracted 0.47 percentage point) and investment in nonresidential structures (subtracted 0.15 percentage points).

I'll have more later ...

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Price Briefing 22 – 28 January

Fluorspar and DBM prices decline on weak demand, as graphene prices come down on increased capacity and US silica raises prices for non-frac sand products.

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Index of Private Housing Rental Prices - October to December 2015 results

An experimental price index tracking the prices paid for renting property from private landlords in Great Britain.

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Index of Private Housing Rental Prices, October to December 2015

An experimental price index tracking the prices paid for renting property from private landlords in Great Britain.

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Index of Private Housing Rental Prices, Reference Tables, December 2015

Rental price index historical time series.

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Kansas City Fed: Regional Manufacturing Activity Declined Further in January

From the Kansas City Fed: Tenth District Manufacturing Activity Fell Again

The Federal Reserve Bank of Kansas City released the January Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that Tenth District manufacturing activity fell again in January.

“We saw another moderate drop in regional factory activity in January, marking the eleventh straight month of slight to moderate declines,” said Wilkerson. “However, firms remained optimistic that conditions would improve slightly in coming months.”
...
The month-over-month composite index was -9 in January, unchanged from -9 in December but down from -1 in November.
...
The employment index was largely unchanged at -15. ...

Most future factory indexes were somewhat lower, but on net positive overall. The future composite index was basically unchanged at 5, while the shipments, employment, and new orders for exports indexes increased somewhat.
emphasis added

This was the last of the regional Fed surveys for January. Four our of five of the regional surveys indicated contraction in January, especially in the Dallas region (oil prices).

Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:

Click on graph for larger image.

The New York and Philly Fed surveys are averaged together (yellow, through January), and five Fed surveys are averaged (blue, through January) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through December (right axis).

It seems likely the ISM index will be weak in January, and will probably show contraction again.  The early consensus is the ISM index will decline to 47.9% from 48.2% in December (below 50 is contraction).

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Ganzhou Rare Earth Association brings guidance prices back down

Body rolls back increases announced for the beginning of January without explanation.

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FOMC Statement: No Change to Policy, Uncertain about rise in inflation

FOMC Statement:

Information received since the Federal Open Market Committee met in December suggests that labor market conditions improved further even as economic growth slowed late last year. Household spending and business fixed investment have been increasing at moderate rates in recent months, and the housing sector has improved further; however, net exports have been soft and inventory investment slowed. A range of recent labor market indicators, including strong job gains, points to some additional decline in underutilization of labor resources. Inflation has continued to run below the Committee's 2 percent longer-run objective, partly reflecting declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation declined further; survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee currently expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market indicators will continue to strengthen. Inflation is expected to remain low in the near term, in part because of the further declines in energy prices, but to rise to 2 percent over the medium term as the transitory effects of declines in energy and import prices dissipate and the labor market strengthens further. The Committee is closely monitoring global economic and financial developments and is assessing their implications for the labor market and inflation, and for the balance of risks to the outlook.

Given the economic outlook, the Committee decided to maintain the target range for the federal funds rate at 1/4 to 1/2 percent. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. In light of the current shortfall of inflation from 2 percent, the Committee will carefully monitor actual and expected progress toward its inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction, and it anticipates doing so until normalization of the level of the federal funds rate is well under way. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.

Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; James Bullard; Stanley Fischer; Esther L. George; Loretta J. Mester; Jerome H. Powell; Eric Rosengren; and Daniel K. Tarullo.
emphasis added

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CVD graphene is 99.9% cheaper today than in 2010

Spanish nanotechnology business Graphenea claims it has brought down the price of graphene from thousands of dollars per gram to just a few dollars in the space of five years, making the material competitive with other widely used nanomaterials.

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How does Wall Street and Venture Capitalist money influence service provider transparency?

I have been getting a lot of interesting feedback regarding my last post about Zycus.

In one discussion, I had expressed my surprise regarding how frank they were about the market, the competition, where they are weak, and where they are strong. I could not help but wonder why they were so open.

The response I received was simple and to the point . . . because they don’t have anything to hide, and even less to fear.

Already talking about the framework for our next book, I brought this last point up with Kelly Barner.

Is the fact that Zycus is financially independent from external third-party interests such as VCs and Wall Street expectations, the reason for their openness?

In other words, does the need to play to Wall Street and VCs make service providers less open?

Do they make service providers less likely to be forthcoming?

Her answer was a qualified yes.

According to Kelly, they can only get away with being less than forthright “if” procurement decision makers don’t push for more. In more, Kelly is talking about real information beyond a perfunctory features, functions and benefits analysis.

If we in the procurement world continue to be blinded by the shiny paper of traditional analyst assessments – think Magic Quadrant or Top 50 to watch lists – we can (and will) miss the big picture.

So too will the service providers.

In an earlier post, I had made reference to an article titled The Myth of Ariba. In it, a former executive for the company said the following; “Ariba was a real company with a real product that got swept up in its own hype, with unfortunate consequences.” The executive then added “Ariba was basically a fraud . . . creating [the impression that Ariba was constructing a global marketplace]. . . even though this was seen as being “a rather impossible task.”

In the same article and a subsequent book, the executive then went on to say that the company “went through the motions” of building this marketplace because “the stock was the only thing that mattered. A valuable stock gave Ariba currency it could use to buy other companies.”

Barner then added that with investment dollars being “harder to come by,” service providers need to shift their thinking. From my standpoint, this means that they have to become more transparent about their strengths and weaknesses beyond a specification sheet.

Instead of playing to The Street, which includes using press releases that brag about wins, they need to openly talk to the real market about real areas of interest and concern.

It would appear, at least based on this one call, that Zycus has figured this out.

With a healthy percentage of failed initiatives and increasing churn rates, one can only wonder how long it will take other providers to follow suit.

 

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Facebook Readies a Network for Virtual Reality

By QUENTIN HARDY from NYT Technology http://ift.tt/204Hb0d
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For the procurement people among you, have a look at the latest YQ Matrix raw material and semi-finished prices. For: Prices on other websites.

Real Prices and Price-to-Rent Ratio in November

Here is the earlier post on Case-Shiller: Case-Shiller: National House Price Index increased 5.3% year-over-year in November

The year-over-year increase in prices is mostly moving sideways now around 5%. In November 2015, the index was up 5.3% YoY.

In the earlier post, I graphed nominal house prices, but it is also important to look at prices in real terms (inflation adjusted).  Case-Shiller, CoreLogic and others report nominal house prices.  As an example, if a house price was $200,000 in January 2000, the price would be close to $274,000 today adjusted for inflation (37%).  That is why the second graph below is important - this shows "real" prices (adjusted for inflation).

It has been almost ten years since the bubble peak.  In the Case-Shiller release this morning, the National Index was reported as being 4.3% below the bubble peak.   However, in real terms, the National index is still about 18% below the bubble peak.

Nominal House Prices


The first graph shows the monthly Case-Shiller National Index SA, the monthly Case-Shiller Composite 20 SA, and the CoreLogic House Price Indexes (through September) in nominal terms as reported.

In nominal terms, the Case-Shiller National index (SA) is back to September 2005 levels, and the Case-Shiller Composite 20 Index (SA) is back to May 2005 levels, and the CoreLogic index (NSA) is back to June 2005.

Real House Prices

The second graph shows the same three indexes in real terms (adjusted for inflation using CPI less Shelter). Note: some people use other inflation measures to adjust for real prices.

In real terms, the National index is back to November 2003 levels, the Composite 20 index is back to July 2003, and the CoreLogic index back to January 2004.

In real terms, house prices are back to 2003 levels.

Note: CPI less Shelter is down 0.8% year-over-year, so this has been pushing up real prices recently.

Price-to-Rent

In October 2004, Fed economist John Krainer and researcher Chishen Wei wrote a Fed letter on price to rent ratios: House Prices and Fundamental Value. Kainer and Wei presented a price-to-rent ratio using the OFHEO house price index and the Owners' Equivalent Rent (OER) from the BLS.

Here is a similar graph using the Case-Shiller National, Composite 20 and CoreLogic House Price Indexes.

This graph shows the price to rent ratio (January 1998 = 1.0).

On a price-to-rent basis, the Case-Shiller National index is back to July 2003 levels, the Composite 20 index is back to March 2003 levels, and the CoreLogic index is back to August 2003.

In real terms, and as a price-to-rent ratio, prices are back to 2003 levels - and the price-to-rent ratio maybe moving a little sideways now.

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Chinese DBM prices slip by $10/tonne despite lack of trading

Suppliers may be offering early discounts during seasonal quiet period.

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Case-Shiller: National House Price Index increased 5.3% year-over-year in November

S&P/Case-Shiller released the monthly Home Price Indices for November ("November" is a 3 month average of September, October and November prices).

This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index.

Note: Case-Shiller reports Not Seasonally Adjusted (NSA), I use the SA data for the graphs.

From S&P: Continued Increases in Home Prices for October According to the S&P/Case-Shiller Home Price Indices

The S&P/Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, recorded a slightly higher year-over-year gain with a 5.3% annual increase in November 2015 versus a 5.1% increase in October 2015. The 10-City Composite increased 5.3% in the year to November compared to 5.0% previously. The 20-City Composite’s year-over-year gain was 5.8% versus 5.5% reported in October.
...
Before seasonal adjustment, the National Index posted a gain of 0.1% month-over-month in November. The 10- City Composite was unchanged and the 20-City Composite reported gains of 0.1% month-over-month in November. After seasonal adjustment, the National Index, along with the 10-City and 20-City Composites, all increased 0.9% month-over-month in November. Fourteen of 20 cities reported increases in November before seasonal adjustment; after seasonal adjustment, all 20 cities increased for the month.
emphasis added

Click on graph for larger image.

The first graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000).

The Composite 10 index is off 12.9% from the peak, and up 0.9% in November (SA).

The Composite 20 index is off 11.5% from the peak, and up 0.9% (SA) in November.

The National index is off 4.3% from the peak, and up 0.9% (SA) in November.  The National index is up 29.2% from the post-bubble low set in December 2011 (SA).

The second graph shows the Year over year change in all three indices.

The Composite 10 SA is up 5.4% compared to November 2014.

The Composite 20 SA is up 5.8% year-over-year..

The National index SA is up 5.3% year-over-year.

Prices increased (SA) in 20 of the 20 Case-Shiller cities in November seasonally adjusted.  (Prices increased in 14 of the 20 cities NSA)  Prices in Las Vegas are off 39.0% from the peak.

The last graph shows the bubble peak, the post bubble minimum, and current nominal prices relative to January 2000 prices for all the Case-Shiller cities in nominal terms.

As an example, at the peak, prices in Phoenix were 127% above the January 2000 level. Then prices in Phoenix fell slightly below the January 2000 level, and are now up 55% above January 2000 (55% nominal gain in almost 16 years).

These are nominal prices, and real prices (adjusted for inflation) are up about 40% since January 2000 - so the increase in Phoenix from January 2000 until now is about 15% above the change in overall prices due to inflation.

Six cities - Charlotte, Boston, Dallas, Denver, Portland and San Francisco - are above the bubble highs (Seattle is close).    Detroit prices are barely above the January 2000 level.

I'll have more on house prices later.

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Graphenea makes further cuts to graphene prices

Spanish nanotechnology company reduces selling value of its products as it ramps up capacity to 1 tpa graphene.

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For One Designer, Inspiration That Began With Hand-Me-Downs

By HILARY MOSS from NYT T Magazine http://ift.tt/1ZOwPfj
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For the procurement people among you, have a look at the latest YQ Matrix raw material and semi-finished prices. For: Prices on other websites.

Tuesday: Case-Shiller House Prices

Tuesday:
• 9:00 AM: FHFA House Price Index for November 2015. This was originally a GSE only repeat sales, however there is also an expanded index.  The consensus is for a 0.5% month-to-month increase for this index.

• 9:00 AM: S&P/Case-Shiller House Price Index for November. Although this is the November report, it is really a 3 month average of September, October and November prices.  The consensus is for a 5.7% year-over-year increase in the Comp 20 index for November. The Zillow forecast is for the National Index to increase 5.3% year-over-year in November.

• 10:00 AM: Richmond Fed Survey of Manufacturing Activity for January.

• 10:00 AM ET: Regional and State Employment and Unemployment for December.

From Diana Olick at CNBC: Homebuilder DR Horton's Bet on Entry-Level Houses Paying Off Big

... Texas-based DR Horton's CEO David Auld said on the company's quarterly earnings call. "The Express (brand) has been the driver of market share gains."

Express launched in early 2014, touting no-option, no-frills homes in exchange for prices between $120,000 and $150,000. Prices are now slightly higher, moving with the broader market gains, but still below the nation's median price. The brand has solid footing in Texas, the Carolinas and Florida, but it is now expanding strongly into Southern California. ...

"They are doing the best job of any of the large builders executing at entry level, and I think you have to have that as you go through '16," homebuilding analyst Stephen East of Evercore ISI said on CNBC's "Squawk on the Street."

As we've discussed, future growth for new home sales is partially dependent on more affordable homes.

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3 Tips On How To Avoid Collaboration Burnout

Editor’s Note: Is there a right way and a wrong way to collaborate?

I came across this post by Roz Usheroff in which she talks about “too much collaboration.”

Given that collaboration is such a hot topic in the procurement world, what is the difference between an effective and ineffective collaboration?

The Remarkable Leader

Generally speaking I have found that women are more open and willing to collaborate than men.

I am not by any means suggesting that men don’t collaborate, because they do. It is just not to the same degree, nor is it for the same reasons.

Whether it is the result of a genetic predisposition, societal influence or, a lack of self-confidence, women are more inclined than men to seek input and consensus. A Fast Company article, and the studies to which they refer, attribute this difference to the fact that “men tend to overestimate their abilities and downplay those of their coworkers, while women shortchange their skills and defer to their peers.”

Regardless of the reasons or differences, in a world in which there is an increasing emphasis on teamwork, and coming together for the purposes of achieving a mutually sought after goal, the ability to collaborate is seen as a strength. In fact it could…

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China acidspar prices slip to new lows

Pricing Review: Chinese acidspar prices down by additional 11% as suppliers scramble to clear stocks.

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Dallas Fed: "Texas Manufacturing Activity Falls Sharply" in January

From the Dallas Fed: Texas Manufacturing Activity Falls Sharply

Texas factory activity fell sharply in January, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index—a key measure of state manufacturing conditions—dropped 23 points, from 12.7 to -10.2, suggesting output declined this month after growing throughout fourth quarter 2015.

Other indexes of current manufacturing activity also indicated contraction in January. The survey’s demand measures—the new orders index and the growth rate of orders index—led the falloff in production with negative readings last month, and these indexes pushed further negative in January. The new orders index edged down to -9.2, and the growth rate of orders index fell to -17.5, its lowest level in a year. The capacity utilization index fell 15 points from 8.1 to -7, and the shipments index also posted a double-digit decline into negative territory, coming in at -11.

Perceptions of broader business conditions weakened markedly in January. The general business activity and company outlook indexes fell to their lowest readings since April 2009, when Texas was in recession. The general business activity index fell 13 points to -34.6, and the company outlook index slipped to -19.5.

Labor market indicators reflected a decline in January after exhibiting strength in November and December 2015. The employment index dropped from 10.9 to -4.2, with 17 percent of firms noting net hiring and 21 percent noting net layoffs. The hours worked index plummeted 23 points to -9.2, suggesting a sharp pullback in employee hours.
emphasis added

Texas manufacturing is in a recession - no surprise with the sharp decline in oil prices.

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With Imposed Transparency and Concerned Millennials, a Boom in Corporate Responsibility?

By ANDREW C. REVKIN from NYT Opinion http://ift.tt/1VkGedg
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Black Knight: House Price Index up 0.1% in November, Up 5.5% year-over-year

Note: I follow several house price indexes (Case-Shiller, CoreLogic, Black Knight, Zillow, FHFA, FNC and more). Note: Black Knight uses the current month closings only (not a three month average like Case-Shiller or a weighted average like CoreLogic), excludes short sales and REOs, and is not seasonally adjusted.

From Black Knight: U.S. home prices rose 0.1% from October, and were up 5.5% on a year-over-year basis

• U.S. home prices rose 0.1% from October, and were up 5.5% on a year-over- year basis

• This puts national home prices up 27% since the bottom of the market at the start of 2012 and just 5.3% off its June 2006 peak

• For the fifth straight month, New York led gains among the states, seeing 1.2% month-over-month appreciation

• Ohio and Connecticut topped the list of 10 most negative price movements among the states, with home prices falling by 0.4% from October in each state

• California home prices declined for the second straight month, though seasonally adjusted numbers suggest continued but slowing growth for the state

The Black Knight HPI increased 0.1% percent in November, and is off 5.3% from the peak in June 2006 (not adjusted for inflation).

The year-over-year increase in the index has been about the same for the last year.

Note: Case-Shiller for November will be released tomorrow.

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Sunday Night Futures

From James Hamilton at Econbrowser: Can lower oil prices cause a recession?. An excerpt:

There are thus some reasons why a decrease in oil prices would be a boost to the U.S. economy and other reasons why it could even be a drag. A number of studies have looked at the effects of oil price decreases and concluded that these have little or no net positive effect on U.S. real GDP growth; see for example this survey. The price of oil fell from $30/barrel in November 1985 to $12 by July of 1986. U.S. real GDP continued growing throughout, logging a 2.9% increase overall for 1986, neither significantly faster nor slower than normal.

But 1986 was a bad time for Texas and the other oil-producing states. Here’s a graph from some analysis I did with Michael Owyang of the Federal Reserve Bank of St. Louis. We estimated for each state’s employment growth a recession-dating algorithm like the one that Econbrowser updates each quarter for the overall U.S. economy (by the way, a new update will be posted this Friday). In the gif [at Econbrowser] you can watch the energy-producing states and their neighbors develop their own regional recession during the mid-1980’s even while national U.S. employment and GDP continued to grow.
...
[R]egardless of whether it’s oil prices that are moving stock prices or the other way around, folks in Texas and North Dakota have plenty of reason to be concerned.

Weekend:
• Schedule for Week of January 24, 2016

Monday:
• At 10:30 AM, the Dallas Fed Manufacturing Survey for January.

From CNBC: Pre-Market Data and Bloomberg futures: currently S&P futures are down 3 and DOW futures are down 33 (fair value).

Oil prices were up sharply over the last week with WTI futures at $32.24 per barrel and Brent at $32.33 per barrel.  A year ago, WTI was at $46, and Brent was at $47 - so prices are down about 30% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $1.82 per gallon (down about $0.20 per gallon from a year ago).

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Gasoline Prices and Exurbia

Here is a quote from an NPR article this morning: $1.22 A Gallon: Cheap Gas Raises Fears Of Urban Sprawl

"With the fall of gas prices, in a place like Columbus and most Midwestern cities, it really is going to encourage more sprawl," [Cleve Ricksecker, directs two Downtown Columbus Special Improvement Districts] says.

Sprawl can mean more traffic jams and air pollution. But he says only a spike in the price of gas would change the equation when people are making decisions about where to live and work.

Lower gasoline prices make exurbia more attractive (people have short memories), and we might see a shift to people buying homes with longer commutes.

In 2008, I wrote a post: Temecula: 15% of homes REO or in Foreclosure. I noted that Temecula was being hit hard by both the housing bust and high gasoline prices:

I remember visiting a friend in Temecula about 3 years ago. We were standing in his front yard, and he started telling me what his neighbors did for a living. "A mortgage broker lives there. A real estate agent there. That guy is in construction. Another mortgage broker there" ... and on and on. Over half of the households on his block were dependent on the housing market in way or another.

So it is no surprise that the housing bust is hitting Temecula hard.

But look at Temecula on this map. San Diego is far to the south - living in Escondido is a tough enough commute to work in San Diego. And Orange County is an even more difficult drive to the west. Imagine what $5 gasoline will do.

Here is that map. Now times are good in exurbia. The housing bust is over and gasoline prices are below $2 per gallon:


View Larger Map

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Facts, Fairness, and the Election­

By MARGARET SULLIVAN from NYT Public Editor http://ift.tt/1PuwJnw
This content was assembled for you by the YQ Matrix platform

The views expressed in this post and throughout the series are the autor's own and not intended to reflect the views the YQ Matrix platform, its users or any associated organisations.

For the procurement people among you, have a look at the latest YQ Matrix raw material and semi-finished prices. For: Prices on other websites.

Schedule for Week of January 24, 2016

The key reports this week are the first estimate of Q4 GDP, December New Home sales, and the Case-Shiller House Price Index for November.

The FOMC is meeting on Tuesday and Wednesday, and no change in policy is expected at this meeting.

----- Monday, January 25th -----
10:30 AM: Dallas Fed Manufacturing Survey for January.

----- Tuesday, January 26th -----
9:00 AM: FHFA House Price Index for November 2015. This was originally a GSE only repeat sales, however there is also an expanded index.  The consensus is for a 0.5% month-to-month increase for this index.

9:00 AM: S&P/Case-Shiller House Price Index for November. Although this is the November report, it is really a 3 month average of September, October and November prices.

This graph shows the nominal seasonally adjusted National Index, Composite 10 and Composite 20 indexes through the October 2015 report (the Composite 20 was started in January 2000).

The consensus is for a 5.7% year-over-year increase in the Comp 20 index for November. The Zillow forecast is for the National Index to increase 5.3% year-over-year in November.

10:00 AM: Richmond Fed Survey of Manufacturing Activity for January.

10:00 AM ET: Regional and State Employment and Unemployment for December.

----- Wednesday, January 27th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

10:00 AM: New Home Sales for December from the Census Bureau.

This graph shows New Home Sales since 1963. The dashed line is the November sales rate.

The consensus is for a increase in sales to 500 thousand Seasonally Adjusted Annual Rate (SAAR) in December from 490 thousand in November.

2:00 PM: FOMC Meeting Announcement.  The FOMC is expected to make no change to policy at this meeting.

----- Thursday, January 28th -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 285 thousand initial claims, down from 293 thousand the previous week.

8:30 AM: Durable Goods Orders for December from the Census Bureau. The consensus is for a 0.2% increase in durable goods orders.

10:00 AM: Pending Home Sales Index for December. The consensus is for a 0.8% increase in the index.

10:00 AM: the Q4 Housing Vacancies and Homeownership from the Census Bureau.

11:00 AM: the Kansas City Fed manufacturing survey for January.

----- Friday, January 29th -----
8:30 AM ET: Gross Domestic Product, 4th quarter 2015 (Advance estimate). The consensus is that real GDP increased 0.9% annualized in Q4.

9:45 AM: Chicago Purchasing Managers Index for January. The consensus is for a reading of 45.5, up from 42.9 in December.

10:00 AM: University of Michigan's Consumer sentiment index (final for January). The consensus is for a reading of 93.0, down from the preliminary reading 93.3.

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DOT: Vehicle Miles Driven increased 4.3% year-over-year in November

With lower gasoline prices, driving has really picked up!

The Department of Transportation (DOT) reported today:

Travel on all roads and streets changed by 4.3% (10.4 billion vehicle miles) for November 2015 as compared with November 2014.

Travel for the month is estimated to be 253.2 billion vehicle miles.

The seasonally adjusted vehicle miles traveled for November 2015 is 264.0 billion miles, a 3.4% (8.8 billion vehicle miles) increase over November 2014. It also represents less than a 0.1% increase (13 million vehicle miles) compared with October 2015.

The following graph shows the rolling 12 month total vehicle miles driven to remove the seasonal factors.

The rolling 12 month total is moving up - mostly due to lower gasoline prices - after moving sideways for several years.


Click on graph for larger image.

In the early '80s, miles driven (rolling 12 months) stayed below the previous peak for 39 months.

Miles driven (rolling 12) had been below the previous peak for 85 months - an all time record - before reaching a new high for miles driven in January.

The second graph shows the year-over-year change from the same month in the previous year.

 In November 2015, gasoline averaged $2.26 per gallon according to the EIA.  That was down significantly from November 2014 when prices averaged $3.00 per gallon.  Gasoline prices have continued to decline, and vehicle miles will probably up sharply year-over-year in December and January.

Gasoline prices aren't the only factor - demographics are also important. However, with lower gasoline prices, miles driven - on a rolling 12 month basis - is setting new highs each month.

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A Few Random Comments on December Existing Home Sales

Everyone expected a rebound in existing home sales in December. The key reason for the decline in November was the new TILA-RESPA Integrated Disclosure (TRID). In early October, this new disclosure rule pushed down mortgage applications sharply, however applications bounced back - and so did home sales in December. No surprise.  Note: TILA: Truth in Lending Act, and RESPA: the Real Estate Settlement Procedures Act of 1974.

However, most analysts underestimated the strength of the rebound. (Not CR readers who expected an above consensus report).

As I've noted before, there are some economic reasons to expect some softness in existing home sales in 2016. Low inventory is probably holding down sales in many areas, and there will be weakness in some oil producing areas (see: Houston has a problem).

Earlier: Existing Home Sales increased in December to 5.46 million SAAR

I expected some increase in inventory in 2015, but that didn't happened.  Inventory is still very low and falling year-over-year (down 3.8% year-over-year in December). More inventory would probably mean smaller price increases and slightly higher sales, and less inventory means lower sales and somewhat larger price increases.

The following graph shows existing home sales Not Seasonally Adjusted (NSA).

Click on graph for larger image.

Sales NSA in December (red column) were the highest since December 2006 (NSA).

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US Silica raises prices for silica sand and aplite

Increases of 4-6% levied on non-proppant grade material to support rising demand from glass and construction sectors.

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Price Briefing 15 – 21 January

Fluorspar and CCM prices slide; vein graphite to remain stable; US soda ash suppliers nail down 2016 contracts.

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Key Measures Show Inflation close to 2% in December

The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning:

According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.1% (1.8% annualized rate) in December. The 16% trimmed-mean Consumer Price Index also rose 0.1% (0.8% annualized rate) during the month. The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics' (BLS) monthly CPI report.

Earlier today, the BLS reported that the seasonally adjusted CPI for all urban consumers fell 0.1% (-1.3% annualized rate) in December. The CPI less food and energy rose 0.1% (1.5% annualized rate) on a seasonally adjusted basis.

Note: The Cleveland Fed has the median CPI details for December here. Motor fuel was down 38% annualized in December.

Click on graph for larger image.

This graph shows the year-over-year change for these four key measures of inflation. On a year-over-year basis, the median CPI rose 2.4%, the trimmed-mean CPI rose 1.8%, and the CPI less food and energy also rose 2.1%. Core PCE is for November and increased 1.3% year-over-year.

On a monthly basis, median CPI was at 1.8% annualized, trimmed-mean CPI was at 0.8% annualized, and core CPI was at 1.5% annualized.

On a year-over-year basis, two of these measures suggest inflation remains below the Fed's target of 2%, and two measures, core CPI and median CPI, are above 2%.

Using these measures, inflation has been mostly moving up, and three of the measures are close to the Fed's target (Core PCE is still way below).

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Apple Seeks Nod to Open India Stores Amid Concerns of Slowing Sales Growth

By REUTERS from NYT Business Day http://ift.tt/1PEv6nB
This content was assembled for you by the YQ Matrix platform

The views expressed in this post and throughout the series are the autor's own and not intended to reflect the views the YQ Matrix platform, its users or any associated organisations.

For the procurement people among you, have a look at the latest YQ Matrix raw material and semi-finished prices. For: Prices on other websites.

US natural soda ash prices rise for 2016

Producers finalise average contract increases of around $5/s.ton.

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Wednesday: CPI, Housing Starts

An update on the rain in California ... from the LA Times: What happened to El Niño? Be patient, L.A., it'll come, expert says

[M]uch of the rain Northern California has received in recent months is not significantly related to El Niño. Most of that precipitation — including this week's storms hitting San Francisco — is coming from the typical winter weather pattern in California: cold storms from the northern Pacific Ocean, coming northwest of the state.
...
Experts say it's possible that the classic El Niño-influenced pattern could emerge by late January or early February. That would put it more in line with how the most punishing series of storms arrived in February 1998 and March of 1983.

"As we look back, the big show is usually in February, March — even into April and May," [NASA Jet Propulsion Laboratory climatologist] Patzert said. "So, in many ways, this is on schedule."

Wednesday:
• At 7:00 AM ET, the Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

• At 8:30 AM, the Consumer Price Index for December from the BLS. The consensus is for no change in CPI, and a 0.2% increase in core CPI.

• Also at 8:30 AM, Housing Starts for December. The consensus is for 1.198 million SAAR, up from 1.173 million in November.

• During the day: The AIA's Architecture Billings Index for December (a leading indicator for commercial real estate).

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Sri Lanka’s vein graphite continues to attract foreign explorers

The liberalisation of foreign investment rules and the fact that the country has refused to lower its export prices for the high purity material it produces has tempted an increasing number of overseas operators to the sector, but value addition capacity remains underdeveloped.

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Procurement and social media . . . is it a pairing made in heaven or the other place?

If this will be the first time that you have tuned in to one of our Point-Counterpoint broadcasts on Blog Talk Radio, then you are in for a real treat today.

At 1:00 PM EST this afternoon, Kelly Barner and I will be talking – okay maybe arguing, about the impact that social media has had (and will continue to have) on the procurement world.

According to a May 2015 SocialMediaToday post, research shows that it is “time companies started putting more emphasis on their social media strategy.”

In supporting this position, the article cites the following statistics:

• 4 in 10 social media users have purchased an item online or in-store after sharing it or marking it as a Favorite on Twitter, Facebook or Pinterest.
• 78% of respondents said that companies’ social media posts impact their purchases.
• 71% of consumers are likely to purchase an item based on social media referrals.

While these numbers are compelling, do they apply to the business buyer as much as they do to the everyday consumer?

Some would say yes.

Others would go even further, suggesting that as the tech savvy Generation Next procurement pros move into more dominant roles, and the dinosaurs of yesterday move on, social media’s influence on corporate purchasing will be on a par with our buying activities as consumers at home.

What do you think?

Join us today at 1:00 PM EST on Blog Talk Radio through the following link: http://ift.tt/1RRb7Z6

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This content was assembled for you by the YQ Matrix platform

The views expressed in this post and throughout the series are the autor's own and not intended to reflect the views the YQ Matrix platform, its users or any associated organisations.

For the procurement people among you, have a look at the latest YQ Matrix raw material and semi-finished prices. For: Prices on other websites.