Morning Report: Retail Sales disappoint

Posted on September 16, 2020 by Brent Nyitray

Vital Statistics:

  Last Change
S&P futures 3408 12.6
Oil (WTI) 39.33 0.46
10 year government bond yield   0.67%
30 year fixed rate mortgage   2.94%

Stocks are higher this morning as we await the Fed announcement at 2:00 pm. Bonds and MBS are up

The Fed is expected to maintain rates at 0%, however the action will be in the projection materials. Most market-watchers expect the Fed to keep rates at this level until 2023. In June, the Fed was predicting unemployment would end 2020 at 9.3%, and we are already well below that. They were also predicting GDP would fall 6.5% this year. What would make stocks happy? Big upward revisions in the economic predictions, along with a commitment to hold rates at 0% through 2022.

Retail Sales came in a little below expectations, rising 0.6%. Ex-vehicles and gasoline, they rose 0.7%. The control group, which also excludes building materials fell 0.2%. Note that lumber is on a tear these days.

This image has an empty alt attribute; its file name is lumber.jpg

The retail sales numbers don’t bode well for the holiday shopping season, as back-to-school is often a good predictor. One other interesting data point: the banks have been reporting credit card delinquency rates are actually falling, which means people are paying down debt and not spending. I am guessing less entertainment spending is driving this, however it is something to keep an eye on.

Mortgage Applications fell 2.5% last week as purchases fell 1% and refis fell 4%. The week did contain an adjustment for the Labor Day holiday, so that could be introducing some noise into the numbers. “Mortgage rates held steady last week, and the 30-year fixed rate – at 3.07 percent – has now stayed near the 3 percent mark for the past two months,” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “A 5 percent decline in conventional refinances pulled the overall index lower, but activity was still 30 percent higher than last year. With the flurry of refinance activity reported over the past several months, demand may be slowing as remaining borrowers in the market potentially wait for another sizeable drop in rates.”

Filed under: Economy, Morning Report |

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58 Responses

  1. markinaustin, on September 16, 2020 at 10:53 am said:

    The back-to-school mandated shopping lists are shorter this semester in the Austin Independent School District, and I would guess they are shorter in every school district relying predominantly on online courses.

    Check it out where you live.

    Could partially explain the seasonal comparative slump.

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  2. jnc4p, on September 17, 2020 at 1:18 pm said:

    I wonder if this will backfire:

    “Pennsylvania Supreme Court strikes Green Party presidential ticket from ballot, clearing the way for mail ballots to be sent out”

    https://www.washingtonpost.com/politics/green-party-pennsylvania-ballot-election/2020/09/17/666db0c4-f8f9-11ea-a275-1a2c2d36e1f1_story.html

    If I identified as a Green, this wouldn’t make me vote for Biden. It would make me vote for Trump as a “Fuck You” to those Democrats who got the Greens disqualified.

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    • Kevin S. Willis, on September 17, 2020 at 2:28 pm said:

      Or write in my Green party candidate. And, frankly, I’d be prone to do that to even a preferred party or candidate–write in someone else, or vote someone else–just because I don’t approve of that kind of shit. Might not be enough people like that to make a difference, but there might be. It’s a risky stratagem.

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  3. ScottC, on September 17, 2020 at 2:41 pm said:

    This is awesome, and is reason enough alone to hope for a second Trump term.

    Princeton president Christopher Eisgruber wrote an open letter proclaiming that “[r]acism and the damage it does to people of color persist at Princeton” and that “racist assumptions” are “embedded in structures of the University itself.” So the Department of Education is now investigating the university for being in violation of Title VI of the 1964 CRA.

    Cut federal funds off from the self-admitted racists!

    https://www.washingtonexaminer.com/opinion/exclusive-education-department-opens-investigation-into-princeton-university-after-president-deems-racism-embedded-in-the-school

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  4. ScottC, on September 18, 2020 at 3:46 pm said:

    Vote for Joe Biden, the candidate with character!

    https://thefederalist.com/2020/09/18/joe-biden-resurrects-false-college-claim-that-helped-ruin-his-1988-presidential-run/

    Now to be fair, it is entirely possible, maybe even likely, that the 2020 version of Biden really has no clue that the lies he was telling back in 1988 are still lies. So perhaps that shouldn’t weigh against a judgment of his character.

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  5. jnc4p, on September 18, 2020 at 6:47 pm said:

    Justice Ginsburg has died:

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  6. ScottC, on September 19, 2020 at 6:18 am said:

    In what couldn’t be a more suitable homage to the recently departed Justice Ginsburg, the Pennsylvania Supreme Court has decided that the text of the law is meaningless if it doesn’t achieve what the justices deem to be a desirable outcome.

    Despite the fact that election law in Pennsylvania explicitly says that mail-in ballots must be received by election day in order to be counted, SCOP has ruled that the law must be ignored, and arbitrarily set a new deadline of the Friday after the election.

    https://www.inquirer.com/health/coronavirus/live/coronavirus-covid-cases-philadelphia-pa-nj-de-updates-testing-news-20200917.html#card-1470613893

    RBG is surely looking down upon such a lawless court with pride that her legal legacy lives on.

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    • markinaustin, on September 19, 2020 at 1:26 pm said:

      I don’t totally agree. The primaries in June in PA in several counties had enormous problems, including the mailing out of ballots from clerks on primary day. Equitable remedies were sought in those counties and granted. The Court here citing those cases and the issues that have arisen since thought equity demanded a uniform rule for the state, rather than deal with county by county issues that it assumes will arise.

      I think the argument is not framed properly as a matter of disregard of part of the Election Code, in a vacuum. I do think the question of whether to grant equitable relief is premature. I also think it was answered to save the PA Court the grief of dealing with multiple Counties seeking equitable relief days before the Election because either their understaffed officials or the understaffed USPS did not get the ballots out in time, which it assumed would happen, merely by the process of assumption. It will probably turn out to have been a good guess, but it is still predicting a problem before it happens, which is not usually the way cases and controversies work, but is sometimes a legitimate concern in equity.

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      • ScottC, on September 20, 2020 at 2:32 am said:

        Mark:

        The primaries in June in PA in several counties had enormous problems, including the mailing out of ballots from clerks on primary day.

        Perhaps mail-in ballots are not such a good idea after all.

        In any event, it seems to me that the logical remedy for someone who has not received a mail-in ballot by election day (or early enough to return it by election day) is to go the polls and vote the old fashioned way. The fact that the state has failed to accommodate every person’s individual circumstances and concerns in their desire to vote does not mean that the right to vote has been violated. The ability to request and return a ballot by mail is a convenience, not a Constitutional right. If the state’s attempt to offer this convenience runs into logistical problems such that it ends up not being universally workable, but the ability to vote via other methods, especially the normal/traditional election day method, remains available, then I don’t see how it can be sensibly claimed that voters have been disenfranchised simply because they chose not to avail themselves of those other methods.

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        • markinaustin, on September 20, 2020 at 8:04 am said:

          Your argument fails at many levels.

          Most states permit universal mail in voting and five hold them primarily by mail. Absentee voting is permitted everywhere and has been since before you were born. Your characterization of the normal/traditional election day method is no longer the normal or traditional, but one normal of many that are now traditional across the nation.

          All state election codes have among their express purposes the extension of the franchise to the greatest number of eligible voters. For a state court to find that a statutory approved mode of voting, in this case voting by mail, is threatened by operatives of the state itself or by operatives of the federal government takes an evidentiary showing, but once that is made, equity requires a remedy. The state cannot take away by intent or even by patterned negligence or inconvenience a liberty which it has extended by its own law.

          In your view of traditional and normal, imagine a state election code that encouraged the vote, but imagine that a County in that state decided to have only one voting booth with 20 machines for 100,000 registered voters, because it could not afford more. Any logistical restriction on the vote as envisioned in the Code that is posed by the government [that is supposed to follow the law it promulgates or else people cannot think of their nation as one where the rule of law means anything at all] is subject to an as applied equitable remedy.

          The as applied rule for equitable relief is where I think there are grounds for critical analysis of this case. I don’t know what the trial testimony showed here – if a sufficient group of County Clerks all swore that they could not get all ballots out and back timely [with no fault of the voters] that would make me think a Court had no choice but to fashion an equitable remedy. If the PA Supremes were guessing without that kind of testimony based solely on what occurred in June then their decision, I think, was premature.

          Addendum: according to Wikipedia, in 2016 33 million votes were cast by mail in the presidential election.

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        • ScottC, on September 20, 2020 at 11:37 am said:

          Mark:

          Your characterization of the normal/traditional election day method is no longer the normal or traditional

          In 2016 more than 3 out of every 4 votes were cast in person at an official polling place. And that will be the lowest percentage of such votes in the history of the US. If somewhere between 75% and 100% of all votes in every election in the history of the US doesn’t qualify as normal and/or traditional, I don’t know what would. (To be fair, some of those in-person votes in 2016 were cast early, a relatively new innovation, but still in person.)

          But that aside, the point isn’t the adjective used to describe the method of voting. The point is that, even on the very last day that votes must be cast, there still remains a perfectly legitimate means of voting. If voters refuse to avail themselves of that method, I don’t see how they can claim to have been disenfranchised by the state.

          All state election codes have among their express purposes the extension of the franchise to the greatest number of eligible voters.

          I would have thought that state election codes were constitutionally required to extend the franchise to all eligible voters. But, again, to me there is a difference between “extending the franchise” and accommodating the individual circumstances/limitations of as many eligible voters as possible. One can fail to do the latter without failing to do the former.

          For a state court to find that a statutory approved mode of voting, in this case voting by mail, is threatened by operatives of the state itself or by operatives of the federal government…

          I thought that if this mode of voting is being threatened at all, it is not by operatives of the government, but by oversubscription.

          The state cannot take away by intent or even by patterned negligence or inconvenience a liberty which it has extended by its own law.

          I’m not aware of anyone claiming that the right to vote, or even the ability to vote by mail, is being or might be taken away by “intent”, “patterned negligence”, or “inconvenience”. The concern expressed was that, given USPS stated delivery standards (2-5 days), the time between the last date by which voters are allowed to request a mail-in ballot, Oct 27, and the date by which the ballots must be received by the election board in order to be counted, Nov 3, is not enough time to guarantee that all requested ballots can be sent and returned in time for the deadline. As stated in the SCOP opinion:

          Significantly, the USPS General Counsel’s Letter opined that “certain deadlines for requesting and casting mail-in ballots are incongruous with the Postal Service’s delivery standards,” providing for 2-5 day delivery for domestic First Class Mail and 3-10 day delivery for domestic Marketing Mail. USPS General Counsel’s Letter at 1. As the parties recognize, the Election Code designates October 27, 2020, as the last day for electors to
          request a mail-in ballot. 25 P.S. § 3150.12a(a) (“Applications for mail-in ballots shall be processed if received not later than five o’clock P.M. of the first Tuesday prior to the day of any primary or election.”). Even if a county board were to process and mail a ballot the next day by First Class Mail on Wednesday, October 28th, according to the delivery standards of the USPS, the voter might not receive the ballot until five days later on Monday, November 2nd, resulting in the impossibility of returning the ballot by mail before Election Day, Tuesday November 3rd.

          In other words, had the law made the last request date, say, Oct 15 instead of Oct 27, which it easily could have done, there would not have been an issue. Would you say that, had the last request date been made Oct 15 instead of Oct 27, that somehow voters were being disenfranchised?

          In your view of traditional and normal, imagine a state election code that encouraged the vote, but imagine that a County in that state decided to have only one voting booth with 20 machines for 100,000 registered voters, because it could not afford more.

          Is this the first election ever held in this county? If not, how has it managed to run elections in the past?

          Let me try to make this hypothetical situation more analogous to the current case. Imagine that a county that has always used old fashioned, manual, paper and pencil ballots one year introduces electronic voting machines to its polling place, to make counting easier and more efficient. The law allows for votes to be placed either by the traditional paper and pencil method or by the new electronic method. Due to resource constraints, it can only afford 2 of the new machines, but these machines have been added in addition to the same traditional method of paper and pencil voting, which will remain available.

          Voting day comes, and most of the voters want to use the new machines rather than the old fashioned method. Lines at the two machines begin to grow, while there are no lines for paper and pencil ballots. As 8pm and the close of the polls starts to get closer, poll workers advise people in the line to simply use the old fashioned ballots, to ensure that they vote before the polls close, but they refuse, insisting on using the new machines. The deadline comes and the polls close, with hundreds of people still in line never having cast their vote. Now is it the case that, by installing these new machines as an additional method of voting, but not installing enough to handle all voting by themselves, the County has disenfranchised voters who are now owed some kind of “equitable relief”? Or is it the case that voters have disenfranchised themselves by insisting on using the new method of voting and refusing to use the still available and perfectly legitimate pencil and paper method of voting?

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        • Let the mutherfuker burn!, on September 20, 2020 at 2:37 pm said:

          There should be a Republican SCOTUS litmus test and this should be it.

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  7. jnc4p, on September 19, 2020 at 11:47 am said:

    It’s been said before, but this is a good summation:

    “The Post-Objectivity Era
    Summary of “Hate Inc: Why Today’s Media Makes Us Despise One Another”

    Matt Taibbi

    …
    We’d call this the “objective” style of reporting today, and it’s important to understand, this was not about ethics. It was a commercial strategy.”

    https://taibbi.substack.com/p/the-post-objectivity-era-00f

    It nicely traces with the decline of PL over the past ten years that I’ve been commenting there as well.

    Edit: Interesting contrast

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  8. Brent Nyitray, on September 19, 2020 at 6:19 pm said:

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  9. lmsinca, on September 19, 2020 at 7:00 pm said:

    In my home, and my circle of women, gays, transgenders et al, the “Notorious RBG” is an icon and a hero. I’m very sad to hear of her passing but she left behind an abundance of work (some great, some not so great I suppose), but she worked her entire life to support “the common”.

    I’m sure the R Senate and Mitch McConnell will have no trouble stacking the court before the election, but by the same token if that happens, my liberal friends will be energized to fight back!

    The Senate may be in play after all!

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    • Let the mutherfuker burn!, on September 19, 2020 at 8:21 pm said:

      Always was and will be a bloodbath for the Republicans. The shutdown Trump initiated was an unmitigated disaster for his base. Oh well.

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    • Let the mutherfuker burn!, on September 19, 2020 at 8:24 pm said:

      Let’s say the Senate does not confirm a SCOTUS appointment and also that POTUS and the Senate flip to Republican, should they eliminate the filibuster? Stack the courts?

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    • ScottC, on September 20, 2020 at 1:21 am said:

      lms:

      …but she worked her entire life to support “the common”.

      How so?

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    • markinaustin, on September 20, 2020 at 8:40 am said:

      Lulu, RBG was a little giant. Just the way she went about establishing, through litigation, gender equality – largely by attacking supposed female privilege that had the effect of damaging males – was utterly brilliant.

      Her family and Scalia’s family were close before either he or she were elevated to the Supremes. Their disagreements about constitutional analyses were often sharp. But they respected each other as to both intellect and principles and as human beings. Scalia’s son tells the story of CLinton calling his dad. Clinton said he wanted to appoint Mario Cuomo and asked if there were a liberal lawyer Scalia would prefer as a colleague. He told Clinton “Ruth Bader Ginsburg”.

      Her husband, Martin, cooked gourmet dinners for the two families, at least once from wild boar Scalia had hunted, according to his son.

      https://www.washingtonpost.com/opinions/eugene-scalia-rbg-friendship-oped/2020/09/19/35f7580c-faaa-11ea-a275-1a2c2d36e1f1_story.html

      Quite fortuitously, as neither Scalia nor RBG nor anyone of their contemporaries on the Court had any background in tax and Marty was one of America’s leading tax attorneys, they had a private source of tutoring on taxation.

      Sandra Day O’Connor and RBG became immediate allies – women who were at the top of their LS classes who could not get the big law firm jobs lesser men got. O’Connor once told her that they had pretty much succeeded in creating a world that would have changed the course of their own lives, as both of them would have become red carpet law firm litigators had they finished LS 30 years after they had.

      My concern for the future of the Court? A conservative president should pick honorable and smart conservatives like Scalia himself. I tend to think that will happen, but I worry because at the lower court level O’Connell has pushed through some real hacks, lawyers with no courtroom experience of any sort and no academic qualifications to speak of. If I were Trump I would think about choosing a Cubana from FL who is a conservative R who has passed the Senate previously with over 80 votes for her current judgeship. That electoral vote dream [for him] exists, actually. I am not making a recommendation because I have never read any of her opinions. Just sayin…

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      • ScottC, on September 21, 2020 at 7:23 am said:

        Mark:

        But they respected each other as to both intellect and principles and as human beings

        Scalia opened his Obergefell dissent by saying “I join THE CHIEF JUSTICE’s opinion in full. I write separately to call attention to this Court’s threat to American democracy,” which struck me as an unprecedented (albeit certainly true) thing to say about his colleagues in the majority. Knowing of his close relationship with RBG, I always wanted someone to ask him how he could profess such professional respect for someone whose rulings he deemed to be a big enough threat to American democracy to be called out in one of the most notable SCOTUS cases in recent history. Alas, no one ever did.

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  10. ScottC, on September 20, 2020 at 2:40 pm said:

    Classic Trumpism, on his pending SCOTUS nominee:

    ““It will be a woman — a very talented, very brilliant woman. I think it should be a woman. I actually like women much more than I like men.”

    LOL

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  11. Brent Nyitray, on September 20, 2020 at 6:31 pm said:

    Liberal Millennials are absolutely insufferable twits

    View at Medium.com

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Be kind, show respect, and all will be right with the world.