David Rosenberg's Breakfast with Dave newsletter just came in - here is the synopsis that accompanied the report:
YESTERDAY'S ACTION WAS TELLING
The damage was done yesterday. The U.S. 10-year Treasury note yield broke below the interim lows (as did the long bond) and this is very likely going to set up a retest of the 3.00% level. Government bond yields are at a seven-week low. Corporate bond risk, as measured by CDS, has risen to a six-week high. The Canadian dollar has slipped to a two-week low - even gold/silver prices ripped (best session in five months) and generated a further huge outperformance between Canada and the U.S.A. Meanwhile, gold is rallying on the safe-haven bid because other commodities like oil (down to a two-week low) and copper dropped on cyclical concerns. (China's decision to diversify into IMF notes to the tune of $50 billion also likely helped bolster the gold price). Welcome to the real post-bubble credit collapse world where the initial earthquake is followed by intermittent aftershocks - as market chatter now turns towards the next possible financial problem.
BUYING POWER, WHERE ART THOU? According to TrimTabs, corporate insiders were net sellers of their stock to the tune of $6.3 billion in August - the selling/buying ratio was a huge 30.7x (insiders bought only $210 million). Not only that, but share buybacks slowed to a trickle in August too - $3.6 billion, which was the third lowest tally in the past two years.
EMPLOYMENT BACKDROP ... STILL THE MISSING LINK
The government has managed to pull rabbits out of the hat when it comes time to stimulate housing and autos - though not indefinitely - but obviously has no such magical show for the labour market. As the ADP data showed, there were 298k private sector jobs lost in August (but isn't that a green shoot next to -360k in July and, -433 in June, -461 in May and -518k in April?).
Not only that, but the slack in labour markets across the U.S.A. have hit truly extreme levels. Fully 19 metro areas now have unemployment rates above 15%, and there are locales in California where the numbers are north of 30%.
To get the report, you have to register with Gluskin Sheff to receive them. They're well-worth reading.
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