RSS Feed by Calculated Risk on 7/20/2015 09:57:00 AM
Monday, July 20, 2015
LA area Port Traffic: Weakness in June
Note: There were some large swings in LA area port traffic earlier this year due to labor issues that were settled on February 21st. Port traffic surged in March as the waiting ships were unloaded (the trade deficit increased in March too), and port traffic declined in April. Perhaps traffic in June is closer to normal.
Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic.
The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container).
To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average.
Click on graph for larger image.
On a rolling 12 month basis, inbound traffic was down 0.4% compared to the rolling 12 months ending in May. Outbound traffic was down 0.9% compared to 12 months ending in May.
The recent downturn in exports might be due to the strong dollar and weakness in China.
The 2nd graph is the monthly data (with a strong seasonal pattern for imports).
Usually imports peak in the July to October period as retailers import goods for the Christmas holiday, and then decline sharply and bottom in February or March (depending on the timing of the Chinese New Year).
Imports were down 5% year-over-year in June; exports were down 10% year-over-year.
The labor issues are now resolved, and the distortions from the labor issues are behind us. This data suggests a slightly larger trade deficit with Asia in June.
Sunday, July 19, 2015
Sunday Night Futures
by Calculated Risk on 7/19/2015 09:11:00 PM
First, a reminder of what Professor Tim Duy wrote earlier this year:
I tend agree that the net impact [from the decline in oil prices] will be positive, but note that the negative impacts will be fairly concentrated and easy for the media to sensationalize, while the positive impacts will be fairly dispersed. We all know what is going to happen to rig counts, high-yield energy debt, and the economies of North Dakota and at least parts of Texas. "Kablooey," I think, is the technical term. Easy media fodder. Much more difficult to see the positive impact spread across the real incomes of millions of households, with particularly solid gains at the lower ends of the income distribution. This will be most likely revealed in the aggregate data and be much less newsworthy.I added to Duy's observation by noting that the negative impacts would happen quicker than the positive impacts, but lower oil prices would still be an overall positive for 2015.
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Now from Justin Lahart at the WSJ: Cheap Oil Should Fuel Economy at Last
It looks like better days [in oil producing states] are in the offing. Federal Reserve data released last week showed that the sharp downdraft in drilling activity eased in June. And after falling by more half in the first six months of the year, Baker Hughes ’s weekly count of U.S. oil rigs has just leveled out.Weekend:
Layoff announcements in the energy sector have also fallen back lately. And Goldman’s Mr. Pandl calculates that, adjusting for seasonal swings, initial claims for unemployment insurance in the five states above have also cooled off.
So at the least, the drag from oil on the economy should diminish in the months ahead, putting U.S. growth on a better footing in the second half of the year. What’s more, consumers may start spending more of the money they have been saving at the pump.
• Schedule for Week of July 19, 2015
From CNBC: Pre-Market Data and Bloomberg futures: currently S&P futures are flat and DOW futures are up slightly (fair value).
Oil prices were down over the last week with WTI futures at $50.78 per barrel and Brent at $56.99 per barrel. A year ago, WTI was at $103, and Brent was at $106 - so prices are down about 50% year-over-year.
Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.76 per gallon (down about $0.82 per gallon from a year ago).
EIA: West Coast Gasoline Prices "likely to remain elevated until later this summer"
by Calculated Risk on 7/19/2015 11:38:00 AM
An interesting article from the EIA: California gasoline prices rise further as lengthier supply chain is strained. A few excerpts:
West Coast spot prices for conventional gasoline increased sharply last week, while falling slightly on the Gulf Coast and remaining flat on the East Coast. The Los Angeles, California, spot price for conventional gasoline increased nearly 90 cents per gallon (cents/gal) between July 6 and July 13, while San Francisco, California, and Portland, Oregon prices increased 24 cents/gal and 5 cents/gal, respectively (Figure 1). This most recent price rise results from a delay in receipts of waterborne imports of gasoline blending components and a decrease in total motor gasoline inventories within an already constrained supply chain.
Click on graph for larger image.West Coast spot gasoline prices typically trade at a premium to prices in other regions of the country because of the region's unique product specifications and relative isolation from other domestic and international markets. As a result, West Coast gasoline markets are primarily supplied by in-region production, and prices react more quickly and strongly during times of local supply shortages. The West Coast gasoline spot price differential has been higher than usual for the past several months following a series of supply disruptions caused by an unplanned refinery outage in February and additional refinery outages in April. Also, West Coast gasoline demand is up 4% in the first four months of 2015 compared with the same time last year, putting additional pressure on the supply chain.
...
Other periods of price spikes have occurred in California, most notably in 2008, 2009, and 2012, that were similar in duration and magnitude to the current situation. By early June of this year, the other refineries were back in operation so only the Torrance refinery remains down. Prices will likely stabilize again when imports and inventories increase, but are likely to remain elevated until the repairs to the Torrance refinery are completed later this summer.
Saturday, July 18, 2015
Schedule for Week of July 19, 2015
by Calculated Risk on 7/18/2015 08:22:00 AM
The key reports this week are June New Home sales on Friday, and June Existing Home Sales on Wednesday.
No economic releases scheduled.
10:00 AM ET: Regional and State Employment and Unemployment for June.
10:00 AM: The Federal Reserve will release the Annual revision for Industrial Production and Capacity Utilization
7:00 AM: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.
9:00 AM: FHFA House Price Index for May 2015. This was originally a GSE only repeat sales, however there is also an expanded index. The consensus is for a 0.4% month-to-month increase for this index.
10:00 AM: Existing Home Sales for June from the National Association of Realtors (NAR). The consensus is for sales of 5.40 million on seasonally adjusted annual rate (SAAR) basis. Sales in May were at a 5.35 million SAAR. Economist Tom Lawler estimates the NAR will report sales of 5.45 million SAAR.
A key will be the reported year-over-year change in inventory of homes for sale.
During the day: The AIA's Architecture Billings Index for June (a leading indicator for commercial real estate).
8:30 AM: The initial weekly unemployment claims report will be released. The consensus is for claims to decrease to 279 thousand from 281 thousand.
8:30 AM ET: Chicago Fed National Activity Index for June. This is a composite index of other data.
11:00 AM: the Kansas City Fed manufacturing survey for July.
10:00 AM: New Home Sales for June from the Census Bureau. This graph shows New Home Sales since 1963. The dashed line is the April sales rate.
The consensus is for an increase in sales to 550 thousand Seasonally Adjusted Annual Rate (SAAR) in June from 546 thousand in May.
Friday, July 17, 2015
Mortgage News Daily: Mortgage Rates Near July Lows
by Calculated Risk on 7/17/2015 07:15:00 PM
From Matthew Graham at Mortgage News Daily: Mortgage Rates Slowly Approach July Lows
Mortgage rates continued the recent trend of very small improvements today. Most lenders are essentially unchanged, and while a few rate sheets were higher than yesterday's, they were the exception. The average improvement was so small that it would have no effect on the contract rate in most cases. That means closing costs would be just slightly lower for the same rates quoted yesterday. While some of the most aggressive lenders are back to quoting conventional 30yr fixed rates of 4.0%, most remain at 4.125%. ...Here is a table from Mortgage News Daily:
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