Treasury Curve Now Calls for 39% Chance Of A Recession
Windshield Wiper Thursday The stock market was like a windshield wiper on Thursday because it moved back and forth. Even though the action wasn’t as sharp as we’ve seen in previous days, it was significant, because if the market would have closed at the low of the day, it would have made a new correction…
Consumers Won’t Let the Economy Fall Into A Recession
Another Manufacturing Slowdown Without An Economic Recession July monthly reading for sales growth was fantastic. However, the industrial production report was weak. It appears in the 2nd half of 2019 heading into early 2020, there will be another manufacturing recession, but consumption growth will be solid. That would make this situation like 2015-2016. There are 2…
Yield Curve Inversion Sends Stocks Careening Lower
Major Market Carnage As Yield Curve Inverts As expected, stocks fell sharply after the 10-2 year yield spread inverted briefly. This was its first inversion since August 2007 which was 12 years ago. The Wednesday trading session became historic because the U.S. 30 year treasury yield fell to a record low and the German 10…
Household Debt Hits $13.87 Trillion In Q2
Redbook Sales Growth Falls Again In the all-important back to school shopping season, Redbook yearly same store sales growth declined from the prior week. In the week of August 10th, yearly growth fell from 5.1% to 4.4%. In the past few weeks, it has been mostly below 5%. In rate of change terms, that’s weak,…
Trade Negotiations - Who Has Control? Trump Or China?
Big Rally On Tuesday On Partial Tariff Removal Stocks rallied sharply on Tuesday as the market seems to be trendless; stocks take 2 steps forward and 2 steps back. A down day may have brought the market to new corrections lows. That was avoided because Trump delayed some of the tariffs. As I will describe…
Core Inflation Increases In July, Putting Future Rate Cuts In Doubt
CPI Beats Estimates Investors were caught leaning in the wrong direction as the July CPI report differed from the PPI report. It beat estimates, putting the Fed in more of a bind than most thought it would be in. There is still a 100% chance of a rate cut in September, but this makes rate…
Treasuries Rally Nearly Historic
Big Stock Market Decline On Geopolitical News The stock market sold off significantly on Monday as investors feared the 10-2 year yield curve inversion and the bad geopolitical news. Specifically, in Argentina’s primary election President Mauricio Macri did much worse than expected which caused the S&P Merval Index (Argentinian stock market) to fall 48% in…
Treasury Yields Drop Catalyzes Rare Scenario
2019: The Year Of Higher Stocks & Lower Yields Treasury bonds are in an extremely strong rally as inflation and growth expectations come down. I like to compare this situation to 2016 which is the last slowdown. In the summer of 2016, the 10 year yield hit its lowest level in history. It’s interesting that…
Stocks End Wild Week On A Sour Note
Stocks Decline, Ending A Wild Week Friday was emblematic of the week’s action as there were a couple big swings. The market opened lower and continued falling until about noon. The S&P 500 was down about 1.25% at the low of the day. From that low to 3:40 PM, the S&P 500 increased about 1%.…
Low Inflation Allows The Fed To Cut Rates In September
Core Inflation Falls The only major economic report that was released on Friday was the July PPI-FD (producer price index final demand) reading. It showed there was a big decline in core inflation which missed estimates significantly. Firstly, headline PPI was 0.2% on a monthly basis which met estimates and was above the 0.1% price…
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