Boockvar’s Summation of the Week’s Events
From Peter Boockvar:
Positives,
1) Scott Bessent is clearly unhappy with where the US 10 yr yield has gone and says he’s going to retire $4 billion of longer-term Treasuries, up from $2 billion at likely well below par.
2) Initial jobless claims totaled 206k, 4k below expectations but mostly offset by the 3k person upward revision to last week’s print to a still low 212k. The 4 week average is now 204k vs 200k last week as a print of 189k 5 weeks ago drops out. Delayed by a week, continuing claims rose to just under 1.8mm vs 1.781mm in the week before but remaining below the 1.9mm ish level seen most of last year.
3) The August US services PMI (missing retail/wholesale trade and construction, hugely important pockets of economic activity) rose to 56.8 from 54.6. The manufacturing component remained above 50 at 53.2 but down from 53.9 in the month before. On the manufacturing drop m/o/m, “Safety stock building related to concerns over price rises and supply shortages due to the war in the Middle East had been a key driver of factory growth in the early months of the conflict, but now appears to be fading.”
4) The Philly manufacturing index for August was strong at 47.4, up 6 pts m/o/m and well better than the estimate of 24.8. As for the overall 6 month outlook, it more than doubled m/o/m to 73.6 from 34.4. Also, the capital spending component rose to 48.2 from 30.1.
5) The August NY manufacturing index rose to 20.6 from 15.6 and continues to also reflect the manufacturing rebound after about 3 years of contraction. The estimate was 10 for this very volatile figure month to month.
6) July import prices fell .4% m/o/m and followed a .3% drop in June, all led by the decline in energy prices. This was well below the estimate of up one tenth and the June figure was revised down from up .3% initially. Energy prices for imports by the way fell by 7.5% in July and 4.3% in June but will be reversing in the coming months and thus this is old news.
7) The August NAHB home builder sentiment index rose 1 pt to 35 m/o/m. That remains well below 50 but is 2 pts above the estimate. Reflecting the affordability challenges, Prospective Buyers Traffic came in at just 23, unchanged m/o/m. Impacting the supply side, the NAHB said “While builder sentiment edged higher in August, builders continue to contend with high construction costs and broader economic uncertainty. Rising gas and diesel prices are pushing up material costs, and spec home building remains weak as many prospective buyers stay on the sidelines.” Trying to drive demand, “August marked the 16th straight month that at least 30% of builders reported cutting prices to support demand.”
8) From Ross Stores: “Sales were strong in May and improved sequentially each month with July delivering our strongest performance despite cycling a strong back to school performance last year. Customer traffic once again served as a primary driver of our comparable store sales increase, which underscores the durability of our growth and the momentum we are building…During the quarter, we saw gains from new and lapsed customers, along with more frequent trips and higher spending from existing customers…Importantly, the new customers we are attracting span a broad range of income demographics and age cohorts, including younger shoppers, which we believe reflects the broad appeal of our brand and the success of our marketing efforts in reaching and engaging a diverse customer base.”
9) From Target: “I think broad based strength is the headline I would leave with on a bunch of fronts. We saw that across guest demographics. We saw that across categories and we saw strength throughout the quarter.”
10) From Home Depot: “Our customers continued to engage in home improvement projects, and throughout the quarter, we saw broad based demand across the business…However, larger discretionary projects remain under pressure.” Their Pro business outperformed DIY and the same with Lowe’s.
11) From Toll Brothers: They “delivered solid 3rd quarter results in a challenging market.” Their average price of a home sold was $996,400 so obviously focused on the upper end. “Our performance underscores the strength of our luxury brand, the resilience of our affluent customer base…”
12) From Deere: “The projection for global roadbuilding market remains steady at up approximately 10% for the year, supported by favorable infrastructure spending trends, healthy contractor backlogs, and continued investment in road construction across key regions.” And of course, “Large-scale infrastructure projects, data center construction, and pipeline activity continue to support robust customer demand.”
13) From Viking Holdings: Revenue rose 16.5% and the “results reflect the continued strong demand for our destination focused travel experiences and the great execution of our teams across the organization…From an advanced booking perspective, our 2026 season is effectively sold out with 96% of the capacity for our core products already booked…As of August 9, 53% of the capacity for our core products for 2027 was booked, and this includes a 15% y/o/y increase in capacity.”
14) From Klarna: “Delinquencies improved again this quarter, and provisions have declined as share of volume every quarter since our first report as a public company.”
15) From Analog Devices: “Demand for our solutions continues to grow, supported by robust AI and defense spending, cyclical momentum, and underlying secular content growth across our diversified end markets.”
16) Japan’s August manufacturing PMI rose to 55.1 from 54.5 as the manufacturing recovery has been global. Services lifted too to 52.3 from 51.2. S&P Global said, “While we saw growth momentum pick up across both manufacturing and service sectors, factories continued to lead growth, registering sharp increases in both production and new orders. Furthermore, manufacturers recorded the steepest increase in total sales and overseas demand for over eight-and-a-half years, with robust pipelines of new work noted across semiconductor and AI-related industries.”
17) Remaining above 50, Australia’s manufacturing PMI index was unchanged at 52 while services slipped to 52.9 from 53.6.
18) In the Eurozone, its PMI for manufacturing rose to 52.8 from 51.9, though services remained unchanged at 51.7. S&P Global said this of note, “We are again seeing reports of precautionary stock building helping support the goods-producing sector amid the ongoing supply chain disruptions emanating out of the Middle East, with supply chain delays again remaining worryingly widespread in August. However, there are also encouraging signs of rising demand for AI-related tech goods and rising equipment demand thanks to higher defense spending, notably helping Germany in particular achieve increasingly impressive production gains.” On the service side for the region, “rising tourism spending is helping boost economic growth, notably outside of France and Germany, where the region collectively saw the fastest services growth for over three years.”
19) In the UK, manufacturing fell a touch to 51.5 from 51.9, offset by a rise in services to 52.8 from 52.1. Said by S&P Global, “The expansion is being helped by sunny weather and tech investment, though as expected we have seen some softening of growth in the manufacturing sector as precautionary stock building cools. This reflects easing concerns, for now, over the economic impact of the war in the Middle East. Businesses are feeling more upbeat than at any time since the war began. Job losses are also moderating.”
20) The UK CBI industrial orders index improved by 20 pts to -25 and well better than the estimate of -40. The global recovery in manufacturing is helping. The CBI said “Stronger global demand is providing some welcome relief for manufacturers, with export order books improving sharply and lifting overall orders. Firms also expect output to fall at a much slower pace over the next three months.”
21) In July, ‘payrolled employees’ in the UK fell by 13k vs the estimate of no change and June was revised down to a drop also of 13k vs the first print of -4k. Also, job openings fell to the lowest since 2021. The offset was that jobless claims fell by 11k after a drop in June. Private wage growth thru June rose 2.8% ex bonus as expected. Their unemployment rate held at 4.9% also thru June.
22) The August German ZEW investor expectations survey on their economy rose to 34.2 from 26.3 and that was above the estimate of 30. The Current Situation improved as well to -61.1 from -77.6. The ZEW said “The positive trend in expectations further consolidates in August, likely due to the good quarterly results and the recent high level in exports. The German economy continues to benefit from the federal government’s infrastructure programs although the record low water levels on the Rhine River present an additional acute risk affecting economic activity.”
Negatives,
1) Scott Bessent is replacing low coupon, long term debt with short term T-bills with much higher interest rate debt. US dollar falls to 3 month low in response and US government interest expense is a bit more sensitive to Federal Reserve rate moves, for better or worse. And where will a line be drawn in terms of size if this doesn’t work in capping long-term interest rates. Unless there is fundamental change in the trajectory of US debts and deficits, this will likely prove no different than the fleeting use of FX intervention I believe.
2) Between a drop in holdings and declines in value, ‘foreign official’ holdings of both Treasury bills and bonds fell by $72.1b in the month of June according to the TIC data seen last night. Japan and China were the two biggest sellers with Japan still the biggest holder and China #3 behind the UK (which includes what’s been parked at UK banks from anywhere) . Belgium, Cayman Islands and Luxembourg are right beneath them and can be anyone parking money there.
3) The July pending home sales figure fell 2.3% m/o/m and follows a 4.8% decline in June. The estimate was for no change. All regions were down with the smallest decline in the Midwest where the homes are most affordable. From the NAR, “The highest mortgage rates of the year hit right in the middle of summer, and that’s pulling back contract signings. Home prices are at record highs so houses for sale are sitting on the market longer, and fewer buyers are bidding above the asking price than a year ago, though there are large local market variations.”
4) Housing starts in July were well below expectations as single family starts dropped a sharp 89k m/o/m to just 808k. That is the least amount of starts since late 2022. Multi family starts are very volatile month to month and totaled 431k vs 518k in June, 293k in May and 500k in April. As for permits, the precursor to an eventual start, they rebounded for single family by 22k after falling by 20k in June. Multi family permits rose by 47k to 549k.
5) The August NY Fed’s services index fell to +.5 from +8.7.
6) The Shanghai to NY trip for a 40 foot container was higher by another 9.2% w/o/w, by $801 to $9,507 with water issues at the Panama Canal a factor. It was at $2,771 in the last week of February. To LA, the price rose 8.9% w/o/w to $6,802. While prices have doubled since late February to Rotterdam, prices from Shanghai fell for the 6th straight month because of its different route.
7) Cass Freight July shipments data fell 2.2% m/o/m and 4.8% y/o/y. They said “Some of the softness is the result of higher fuel prices, but to a large extent, volumes are still soft because capacity is declining. The Cass data are trucking intensive, among other modes, but rail intermodal is gaining share from trucking this year, also pressuring this index.”
8) The Bloomberg Agriculture index broke out to the highest level since May 2024.
9) In the July import price figures, taking out the energy influence, import prices were as expected, up .3% m/o/m in July and after a .2% gain in June. Prices ex food and fuel saw rose .3% m/o/m and now up 4.8% y/o/y. Ex petro only prices were up .3% m/o/m and by 4.5% y/o/y.
10) Mortgage applications to purchase a home fell 2% w/o/w after rising by 2.5% last week. They are down by 3.2% y/o/y with the average 30 yr mortgage rate at 6.77%. Refi’s rose 1.5% w/o/w but remained down by 18% y/o/y.
11) From Walmart: They mentioned “seeing some incremental pressure on the consumer relative to the beginning of the year with higher fuel prices. As you go through month by month in the last quarter, you can tell when fuel prices increase and got above $4 and perhaps there’s a psychological impact to that, that there are choices that consumers are making. So, June was a little more obvious as we look at the quarter in terms of customers making tradeoffs. And it’s why we have leaned so heavily into lower prices.”
12) From TJX: Their Marmaxx division (which includes TJ Max and Marshalls) was “below our expectations” but “our three other divisions delivered comp sales increases of 6% to 7%.”
13) From Advanced Auto Parts: “Our 2nd quarter comparable sales results reflected low single digit growth in the Pro channel, which performed in line with expectations along with Main Street Pro trends outpacing overall Pro trends. However, total enterprise sales performance was impacted by the DIY channel as tighter household budgets constrained spending more than we anticipated, especially during the last four weeks of the quarter.”
14) From Home Depot: “We continue to operate in what I call ‘frozen housing market conditions.’“ And “Certainly, we’ve seen incremental cost pressure related to fuel, energy, and other product inputs. You can think of commodities with resin and metals. So, we didn’t have that in our plan as we came into the year, so those are incremental.”
15) From Lowe’s: “Elevated fuel prices combined with broader economic uncertainty have influenced household budgets. Customers continue to tell us that they’re being cautious about their spending and prioritizing where and when they invest in their homes. As a result, discretionary DIY demand remains under pressure.”
16) From Viking Holdings: On why the stock traded down, “the historically low water levels this year, combined with conditions that have deteriorated week-by-week, have impacted guests on some of our itineraries this season.”
17) From Klarna: “we have adjusted our annual volume outlook to reflect a softer than expected German consumer and changes in FX.”
18) From Deere: “producers remain focused on managing profitability, impacted by fluctuating commodity fundamentals and uncertainty around input costs and crop demand, all of which are influencing capital spending decisions by region.”
19) Japan’s July CPI rose 1.9% y/o/y ex food and energy, but as expected and with subsidies still kept below where it would be otherwise.
20) In the UK, headline CPI rose 2.9% and the core rate was higher by 2.6% with services inflation in particular higher by 3.4% y/o/y.
21) The Swedish Riksbank left its policy rate unchanged at 1.75% as expected but left open the door for a hike this year as they access “that the probability of a rate increase later this year remains. If the unexpectedly high inflation during the summer were to be the start of a larger and more lasting upturn in inflation, the Riksbank would adjust its monetary policy in a tighter direction.”
22) China’s economy was soft in July with retail sales, industrial production and fixed asset investment all weaker than forecasted. Also, new home prices continued to soften.
Position: None
BY Doug Kass · Aug 21, 2026, 2:45 PM EDT
