Hien Nguyen @investorHHN

Core PCE Q1 = 3.7% (which printed this morning) actually implies March m/m is just .22% Here is the math: Jan '24 core PCE deflator = .45% Feb '24 core PCE deflator = .26% If Mar '24 core PCE deflator = .22% Then total = 4 x (.45 + .26 + .22) = 3.72% The market sold off since…

Real Final Sales to Domestic Private Purchasers This is the line item I most care about from the GDP report and it was strong at 3% Q/Q and 2.8% Y/Y. I think this metric is the real tell on the consumer and it is robust. Real final sales is running at $70 bn/yr ahead of…

On the Core PCE Price Deflator at 3.7% for Q1 I think the market (over)-reacted to the quarterly Core PCE price deflator for Q1 printing at 3.7% today, thinking that it foreshadows a hot m/m Core PCE print tomorrow. I don't think this will be the case. The Q and m/m measures…

The reason why GDP came in so weak at 1.6% even while consumption was 2.5% was due to Government consumption. G came in at 1.2% Q/Q vs. 4.6% last quarter. It contributed .21% to GDP compared to .79% last quarter. I should think the market would cheer that news :0)

COT Shows Speculators Crowded Into Equities and went long, post CPI Wednesday 4/10, the first time since May 2022. I think last week was a bull trap as speculators bought the CPI dip and went long equities, likely with tight stops. When the market sold off last week, market…

Retail Sales Seasonal Adjustment for March Overstates Actual Strength of the Data This table shows the seasonal adjustments for every March since the year 2000. The dark hues are leap years, Covid years in pink and this March in yellow. The transition from last March (non-leap…

On the Hot Retail Sales for March and Upward Revision to GDPNow It was not a surprise to me at all. I wrote about this last month - the seasonal adjustments for February’s retail sales were bogus due to the leap year. The adjustment for March however were too heavy handed…

Hien Nguyen @investorHHN

a month ago

On the Hot Retail Sales for March and Upward Revision to GDPNow It was not a surprise to me at all. I wrote about this last month - the seasonal adjustments for February’s retail sales were bogus due to the leap year. The adjustment for March however were too heavy handed…

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On Core CPI (1) Core CPI came in hotter than expected and hotter than past several March readings at .36% (2) It's all down to shelter and autos. Vehicle maintenance and auto insurance keep killing us. (3) I think the 10Y trades inside the green and red bands I drew, 4.55 -…

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Core CPI m/m, Seasonally-Adjusted In the pandemic era, Core CPI m/m SA has printed at around .25% in the month of March. Given that that consensus is .3% for this March, I think we will see an inline print tomorrow and the market (both rates and equities) will rally.

Core CPI NSA M/M has run hot in the first half of the year in the Pandemic era, with medians of .5% - .6% m/m. It cools off in the 2H of the year with medians of .1% - .3 m/m. Whatever the reason, I think the odds favor CPI prints reinforcing the H4L narrative until the…

Here’s Why I Think the Odds Favor Several More Months of “Hot” Nonfarm Payrolls This plots the YoY growth in private sector jobs: BLS (NFP) in blue, ADP in red I think ADP is closer to ground truth as it is based on paychecks and not a survey with low response rates. ADP data…

On Positioning and Valuation I'm a buyer until there is crowding on the long side: 1) Speculators and Levered Funds Continue to be significantly short 2) Put to call ratio is near giving me the contrarian buy signal again 3) FINRA debt growth is still too benign to be dangerous…

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I had predicted yesterday’s “hot” Nonfarm Payrolls and wrote about it as early as January. Investors don’t pay adequate attention to ADP, which I think is closer to ground truth. The labor market is NOT accelerating. It is holding steady at around 3M private sector jobs YoY,…

Hien Nguyen @investorHHN

2 months ago

I had predicted yesterday’s “hot” Nonfarm Payrolls and wrote about it as early as January. Investors don’t pay adequate attention to ADP, which I think is closer to ground truth. The labor market is NOT accelerating. It is holding steady at around 3M private sector jobs YoY,…

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In a recent paper by Brookings, the authors stipulate that the US population is likely underestimated by 3M owing to immigration in 2023. The impact of this is that the neutral rate of employment growth is likely 100K higher than previously believed. That is, 160K-200K job…

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On JOLTS Indeed (in red) saw a 4% decline in job openings in February. If this is mirrored by JOLTS (in blue), it should print around 8500K tomorrow, well short of the 8730K consensus. This should act as a temporary release valve for today’s backup in rates.

GDPNow Revised Up to 2.8% As I had written about, retail sales in February was bogus due to seasonal adjustments for leap years. Now with the Personal Consumption Data (which comes from the BEA, whereas Retail Sales comes from the Census Bureau), GDPNow has been revised…

How Bullish is the Buyside Really? I continue to like equities and think the direction of least resistance is to go higher.

Retail Sales Weakness in January + February Were Due to Seasonal Adjusting During Leap Years I have diagnosed that the weakness in retail sales data for January + February is not real. Rather, they are due to way the government seasonally adjusts the data to account for leap…

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This is worth me repeating. The retail sales report today is rubbish. The YoY % change for the seasonally adjusted data trails the non-seasonally adjusted data by 4%. This is impossible! Seasonal adjustments are meant to smooth seasonality and therefore the % YoY change…