May 8. Consumer credit deceleration
–Late profit taking turns in both crude oil and stocks after Trump tweeted “I will be announcing my decision on the Iran Deal tomorrow [Tuesday] from the White House at 2:00 p.m.” Oil slipped back below 70 and stocks ceded a few points as well. The opening of the US Embassy in Jerusalem in one week, May 14, is another possible flashpoint.
–Light volume yesterday with no euro$ contract trading over 100k. Yields were nearly unchanged, edging higher by 1 bp or less across the curve. Treasury kicks off the auction cycle with threes today.
–Consumer Credit yesterday showed an increase of just $11.6b, below expectations of $15b. Although this is likely just payback from storm induced buying last year, revolving credit has declined for the past 2 months, -0.6 in Feb and -3.0 in March. Pretty ominous signal if it continues. The total growth (including non-revolving autos and school loans) was 3.6% but that is showing deceleration as well. In Q4 the rate was 6.9%, in January 4.7, Feb 4.3 and March 3.6.
–AAPL had a gap open to new highs yesterday as the public jumped on Buffet’s bandwagon. However, I would note that Buffet said he would by more ‘at the right price’, which probably doesn’t mean new highs. AAPL closed on its low on light volume, and left a gap from 184.25 to 184.75. It appears likely that there will be a gap open lower today, leaving a potential island top.