UK Election Next Week: “Economist” endorses Cameron 5/1/15

Posted on May 1, 2015 by markinaustin

About Labour, this: Mr Miliband is fond of comparing his progressivism to that of Teddy Roosevelt, America’s trustbusting president. But the comparison is false. Rather than using the state to boost competition, Mr Miliband wants a heavier state hand in markets—which betrays an ill-founded faith in the ingenuity and wisdom of government. Even a brief, limited intervention can cast a lasting pall over investment and enterprise—witness the 75% income-tax rate of France’s president, François Hollande. The danger is all the greater because a Labour government looks fated to depend on the SNP, which leans strongly to the left.   http://tinyurl.com/nwqjron

Filed under: Elections, EU, UK | 1 Comment »

Morning Report – Construction Spending falls 5/1/15

Posted on May 1, 2015 by Brent Nyitray

Stocks are higher this morning on no real news. Bonds and MBS are down. Most of Europe is closed for May Day.

Construction Spending fell .6% in March – another bad economic number. Residential Construction fell 1.6%, although we already knew that from the lousy housing starts number of 926k.

The ISM Manufacturing Survey was flat in April, coming in at 51.5. A reading of 51.5 would correspond to a GDP growth rate of about 2.6%. The comments suggest that conditions are good, and while the rise in the dollar is a headwind, it isn’t choking off growth. The West Coast port strike didn’t help either.

Consumer sentiment fell slightly in April, according to Reuters and the University of Michigan.

The European economy seems to be turning around. In fact, lending is expanding again. While it is very early days, it looks like the world economies are finally going in the right direction, and if so that will probably mark the end of the Great US Treasury Bull Market that began when Paul Volcker tightened to quell the inflation of the 1970s. Chart: US 10 year yield 1980 – present:

And of course, it probably means the end of the secular bear market in stocks that began in 2000.

The open question is whether the Fed can raise rates without crashing the markets.

Filed under: Morning Report | 18 Comments »