by Calculated Risk on 8/30/2015 08:27:00 PM

A September rate hike is still on the table, from Jon Hilsenrath and Ben Leubsdorf at the WSJ: Fed Appears to Hold Line on Rate Plan

Federal Reserve officials emerged from a week of head-spinning financial turbulence largely sticking to their plan to raise U.S. interest rates before the end of the year.

During the Federal Reserve Bank of Kansas City’s annual economic symposium here, many policy makers signaled that stock-market volatility and China’s woes haven’t seriously dented their view that the U.S. job market is improving, and that domestic economic output is expanding at a steady, modest pace.
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“There is good reason to believe that inflation will move higher as the forces holding inflation down—oil prices and import prices, particularly—dissipate further,” said Fed Vice Chairman Stanley Fischer in comments delivered to the conference, which ended Saturday.

Weekend:
• Schedule for Week of August 30, 2015

Monday:
• At 9:45 AM ET, the Chicago Purchasing Managers Index for August. The consensus is for a reading of 54.9, up from 54.7 in July.

• At 10:30 AM, the Dallas Fed Manufacturing Survey for August.

From CNBC: Pre-Market Data and Bloomberg futures: currently S&P futures are down 18 and DOW futures are down 140 (fair value).

Oil prices were up over the last week with WTI futures at $44.85 per barrel and Brent at $49.41 per barrel.  A year ago, WTI was at $98, and Brent was at $101 - so prices are down over 50% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $2.47 per gallon (down almost $1.00 per gallon from a year ago).  Gasoline prices will probably continue to decline over the next month or more (follow oil prices down).

by Calculated Risk on 8/30/2015 12:30:00 PM

The automakers will report August vehicle sales on Tuesday, Sept 1. Sales in July were at 17.5 million on a seasonally adjusted annual rate basis (SAAR), and it appears sales in August will be over 17 million SAAR again.

Note:  There were 26 selling days in August, down from 27 in August 2014 (Also note: Labor Day is not included in August this year).  Here is another forecast:

From WardsAuto: Forecast: LV SAAR Should Hold Steady in August

A new WardsAuto forecast calls for strong U.S. light-vehicle sales in August, extending a streak of light-vehicle SAARs that round to at least 17 million units.

The report calls for automakers to sell 1.53 million LVs in the U.S. this month, for a daily sales rate of 58,866 units (over 26 days), a 0.7% improvement over same-month year-ago (27 days). The modest increase actually represents a more meaningful year-over-year gain since last August’s official sales reports included Labor Day weekend sales, which lifted the daily sales rate for the entire month. This year, the heavily-incentivized holiday-weekend sales will fall entirely in September.

The forecasted seasonally adjusted rate of 17.3 million-units would make August the fourth consecutive month with an LV SAAR of at least 17 million and mark the longest such streak since a 12-month run ending in June 2002.

by Calculated Risk on 8/29/2015 04:01:00 PM

This is an unofficial list of Problem Banks compiled only from public sources.

Here is the unofficial problem bank list for August 2015.

Changes and comments from surferdude808:

Update on the Unofficial Problem Bank List for August 2015. During the month, the list fell from 290 institutions to 282 after nine removals and one addition. Assets dropped by $1.2 billion to an aggregate $82.7 billion. The asset total was updated to reflect second quarter figures, which resulted in a small decline of $95 million. A year ago, the list held 439 institutions with assets of $139.97 billion. This week, we were anticipating for the FDIC to release second quarter industry results and an update on the Official Problem Bank List, but that will have to wait until next month's update.

Actions have been terminated against Bank of the Carolinas, Mocksville, NC ($363 million); Oxford Bank, Oxford, MI ($304 million Ticker: OXBC); Bank of the Rockies, National Association, White Sulphur Springs, MT ($131 million); Madison Bank, Richmond, KY ($123 million); and Bank of Monticello, Monticello, GA ($96 million).

Several banks merged to find their way off the problem bank list including First National Bank of Wauchula, Wauchula, FL ($76 million); Pineland State Bank, Metter, GA ($55 million); The Elkhart State Bank, Elkhart, TX ($43 million); and SouthBank, a Federal Savings Bank, Palm Beach Gardens, FL ($20 million).

Added this month was OSB Community Bank, Brooklyn, MI ($72 million). In addition, the Federal Reserve issued a Prompt Corrective Action order against Cecil Bank, Elkton, MD ($302 million).

by Calculated Risk on 8/29/2015 08:31:00 AM

The key report this week is the August employment report on Friday.

Other key indicators include the August ISM manufacturing index and August vehicle sales, both on Tuesday, and the July Trade Deficit on Thursday.

----- Monday, August 31st -----
9:45 AM: Chicago Purchasing Managers Index for August. The consensus is for a reading of 54.9, up from 54.7 in July.

10:30 AM: Dallas Fed Manufacturing Survey for August.

----- Tuesday, September 1st -----
10:00 AM: ISM Manufacturing Index for August. The consensus is for the ISM to be at 52.8, up from 52.7 in July.

Here is a long term graph of the ISM manufacturing index.

The ISM manufacturing index indicated expansion at 52.7% in July. The employment index was at 52.7%, and the new orders index was at 56.5%.

10:00 AM: Construction Spending for July. The consensus is for a 0.8% increase in construction spending.

All day: Light vehicle sales for August. The consensus is for light vehicle sales to decrease to 173 million SAAR in August from 17.5 million in July (Seasonally Adjusted Annual Rate).

This graph shows light vehicle sales since the BEA started keeping data in 1967. The dashed line is the July sales rate.

----- Wednesday, September 2nd -----
7:00 AM: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:15 AM: The ADP Employment Report for August. This report is for private payrolls only (no government). The consensus is for 210,000 payroll jobs added in August, up from 185,000 in July.

10:00 AM: Manufacturers' Shipments, Inventories and Orders (Factory Orders) for July. The consensus is a 0.9% increase in orders.

2:00 PM: the Federal Reserve Beige Book, an informal review by the Federal Reserve Banks of current economic conditions in their Districts.

----- Thursday, September 3rd -----
8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for 273 thousand initial claims, up from 271 thousand the previous week.

8:30 AM: Trade Balance report for July from the Census Bureau.

This graph shows the U.S. trade deficit, with and without petroleum, through June. The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

The consensus is for the U.S. trade deficit to be at $42.9 billion in July from $42.8 billion in June.

10:00 AM: the ISM non-Manufacturing Index for August. The consensus is for index to decrease to 58.5 from 60.3 in July.

----- Friday, September 4th -----
8:30 AM: Employment Report for August. The consensus is for an increase of 223,000 non-farm payroll jobs added in August, up from the 215,000 non-farm payroll jobs added in July.

The consensus is for the unemployment rate to decrease to 5.2%.

This graph shows the year-over-year change in total non-farm employment since 1968.

In July, the year-over-year change was over 2.9 million jobs.

As always, a key will be the change in real wages - and as the unemployment rate falls, wage growth should pickup.

by Calculated Risk on 8/28/2015 08:43:00 PM

Note: Tomorrow, Saturday, at 12:25 PM ET, Fed Vice Chairman Stanley Fischer will speak at the Jackson Hole Symposium on "U.S. Inflation Developments"

A couple of quotes from earlier today ...

From Binyamin Appelbaum at the NY Times: Fed Official Fischer Leaves Door Open for September Rate Increase

Mr. Fischer said the Fed was preparing to raise interest rates soon because of the “impressive” growth of the domestic economy. He suggested that the recent volatility of global financial markets could cause the Fed to hesitate, but only if it persisted.

“We haven’t made a decision yet, and I don’t think we should,” Mr. Fischer said in an interview with the cable network CNBC. “We’ve got time to wait and see,” because the Fed’s policy-making committee does not meet until Sept. 16 and 17.
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Mr. Fischer also emphasized Friday that the Fed would not wait until all of its questions were answered. Some amount of uncertainty is inevitable. “When the case is overwhelming, if you wait that long,” he said, “then you’ve waited too long.”

September is still possible, although many economists are now looking at December for the first rate hike.