US consumer confidence dips in September after hurricanes

Sep 26, 2017

In the pre-open trade this morning, the stock indexes were better, the 10-yr. note yield up 1 bps to 2.23% from yesterday’s close. No direct new threats from NK, and investors still driving stock indexes higher. Slightly weaker yesterday but no follow-through today, a pattern that has repeated itself for the last two months in equity markets.

At 10:00 AM EDT two key reports: August new home sales, expected +3.5% to 583K, sales declined 3.5% to 560K units. September consumer confidence from the Conference Board expected at 120.2 fell to 119.8 AND August as revised lower to 120.4 from 122.9 originally released. Both soft, but markets yawned, with no declines in stock indexes. I have a hard time with recent data coming in weaker than forecast, yet investors continue to lay huge bets that equity markets will continue to climb. That said, at the moment it is what it is–and going against the trend is a foolish risk.

Janet Yellen’s speech has been changed from 11:50 am EDT to 12:45 pm.

At 1:00 pm, Treasury will auction $26B of 3 yr. notes, tomorrow $34B of 5s and Thursday $18B of 7s.

NK moving aircraft to the east coast according to South Korea intelligence officials after the US flew B-1 bombers close to the peninsula. Investors appear nonplussed, however; no fear evident in how equity markets are reacting, but still there is money moving into safety in US treasuries. Another current support for the US markets, the dollar is gaining strength against the yen and especially the euro after German elections over the weekend that lessened Merkel’s power. The dollar has been in free-fall since the beginning of the year. A strengthening dollar adds to better returns to foreign investors.

Rates holding well so far in the face of continued buying in the equity markets. NK still a worry point but investors seem to be less concerned with the rhetoric increasing and not expecting more than just words and threats. Two kids on the playground saying, “dare me,” neither wanting to take the dare.

Source: TBWS

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