The level of job openings has now been been basically unchanged since February. The job openings data may be signalling a stalling out of employment. Initial jobless claims fell by 12k but the prior week was revised up by 4k.
Read MoreIn the below charts we take the average YoY% change in consumer prices for 33 countries around the world. What we see is a trend of disinflation that started in mid-2011 and continued through September.
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For the last 40 years, the employment to population ratio has been well correlated with equity valuations.As would make sense, when more people are working, income is higher, demand is more sustainable and investors rationally capitalize corporate earnings at a higher rates. When employment rates are low, the opposite happens.
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So far the contraction in commercial paper has not had a negative impact on stocks, but history would suggest that this is a red flag.
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The semiconductor/semi-cap equipment industry is taking a hit today, with Altera and Cree leading the way down. These are two of the more expensive stocks in the industry, looking at price/cash flow.
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Peaks in NYSE Margin Debt has been a leading indicator in the last large market declines (2000, 2007, 2011). NYSE Margin Debt was looking like it might be topping out in April. However, the latest data for September shows it increased by about $20 billion to new all-time highs.
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US import prices ex-petroleum fell further on a year-over-year basis. This series has now been negative since March. The movements in the USD do not suggest this deflationary pulse from import prices will be abating over the next few months.
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A good proxy for the expansion and/or contraction of the shadow banking market is the change in the amount of commercial paper outstanding. Successive rounds of QE–represented by the expansion of the Federal Reserve’s balance sheet–have had a stimulative, but short lasting impact on the expansion of shadow banking credit.
Read MoreOur favorite statistic to look at whenever the monthly employment reports rolls around is actually 3 statistics multiplied together. We take Payroll Employment x Average Weekly Hours x Average Hourly Earnings to come up with a ”National Income Proxy”.
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