Business

Durable Goods Orders crashed 5.1% MoM and turned back negative YoY and ex-transports continues to deteriorate YoY flashing if nothing else a recessionary environment is upon us (if not an actual recession). However, it is in the core - non-defense ex-aircraaft - segemnt that we see the real bloodbath as shipments plunged and new orders collapsed 7.5% YoY - the "worst since Lehman." Of course we still have bartenders and waitresses to maintain the US economy so this is just transitory weakness in the stock market's most-dependent segment of the economy.

Submitted by Nicholas Colas of Convergex

Three Fed Thoughts, One Conclusion

As we do every quarter, just before CAT announces its result, we show the monthly retail sales for the heavy industrial conglomerate, and in the month of December things went from really bad to even worse, when the company reported what in our estimate was the worst month since the financial crisis, with global retail sales matching the worst annual decline this decade, while the duration of the sales contraction is now unprecedented in company history.

• Unease over Fed rate path dents European stocks (Reuters)
• Global Stocks Pressured After Fed Statement (WSJ)
• Japan's Economy Minister Amari to Resign Over Graft Scandal (BBG)
• Authorities working to clear remaining protesters in Oregon occupation (Reuters)
• China Sharpens Efforts to Halt Money Outflow (WSJ)
• Eurozone January Economic Sentiment Falls Sharply, Hits 5-Mth Low (MNI)
• Glencore Said to Store Oil in Ships Off Singapore Amid Contango (BBG)
• Investors Hedge Bets on Crude-Oil Revival (WSJ)

Following the Fed's disappointing "dovish, but not dovish enough" statement which effectively admitted Yellen had committed policy error by hiking just as the US economy "was slowing down" which in turn lowered the odds of a March rate hike to just 18%, it was up to oil to pick up the correlation torch, and so it did, rising in an otherwise mixed session which has seen European stocks slide on continued weakness surrounding Italian banks, many of which have been halted limit down, while Asia was unable to pick a direction after the resignation of Japan’s "Abenomics" minister Akira Amari to