Macro Update: Is the Reopening Bounce Fading?? — And — Careful Taking That Leap!

Our proprietary macro index gave up 4 points this week; net score -14.00.

Giving ground (to the point of score-change) were housing permits (testing their recently-recaptured upward trend line)

and the stock/bond ratio (bonds outperforming stocks of late):

Other inputs (without score-adjustments this week) worth charting for you are industrial production (losing a little ground vs last month, at a still-striking -7.07% year-on-year),

consumer confidence (still waning),

and, ironically, still-giddy (already garnering our highest score) home builder confidence:

Keeping this week’s update easy, I’ll just offer up a few additional macro-relevant points to consider.
A client asked me yesterday if other central banks are presently following the Fed’s path. I said “absolutely.” Here’s the chart showing balance sheet growth for the majors:

Sadly, Yelp’s data say that 60% of the businesses that have closed this year will not be reopening:

The number of U.S. companies whose profits do not equal their debt service payments (“zombies”) — a trend we began pointing to a year ago — has now reached tech-bubble levels:

Commercial flights beginning to wane in number, globally:

There’s more, but pretty much more of the same.
Bottom line; the latest data suggest that the “reopening” bounce may have begun to fade. Although there’s much to play out; additional stimulus (ultimately), vaccine (ultimately), and so on. Per our main message this week, however, it looks as though we’re approaching the end of a very long debt cycle, which poses challenges that all the stimulus in the world won’t exactly fix — but the stimulus (of which past episodes ironically explain how we find ourselves here) is of course coming nonetheless.

Now, as you know we do our own work, and — as markets demand (require even) conflicting opinions — not everyone agrees with our presently cautious bent. I mean, some folks actually believe now’s the time to take the leap and buy the recent dip with both fists.
Folks like this calculating fella here (if viewing this on your cell phone, scroll down and click “view web version” to play the video):

Have a great weekend!


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