Model Of ISM Manufacturing PMI Based on the rate of change of the recent manufacturing data, it’s clear manufacturing is falling into a contractionary phase. This won’t be one or 2 weak readings. It will be a manufacturing recession like 2015-2016. However, that call won’t generate alpha because it
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 corre
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
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 recor
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, th
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 de
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
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
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
