Mixing it up a little, we’ll do last week’s economic update in writing, and make it this morning’s main message.
In a nutshell, our present assessment remains that go-forward odds favor recession over expansion… Question being, timing?
When our indicators turned red last August we pegged the first half of this year to mark the recession’s official start… Now, as the data roll in, while, for now, we’ll stick to our H1 assessment, we’re sensing that it could be a second-half affair (if indeed we’re right on the recession call)… And recall that at the get-go we expected it to be a mild one by historical comparison — still do (for now).
Our overall score — via our PWA Index — dipped back further into the red by 4.4 points, to -22.22:
A few highlights:
Core Retail Sales bested expectations with a month-on-month increase of 1.7% (panel 2 below)… However, we also track Redbook’s weekly reading (panel 3), which continues to show a notably declining rate of growth… I.e., mixed signals:
CASS freight data, while (considering the details) not all bad, continue to unimpress:
The Consumer Price Index for January (top panel features headline [6.41%], bottom features core [5.6%]), came in a titch hotter than economists expected:
As did Producer Prices (particularly month-on-month [top panel]):
Asian stocks leaned green overnight, with 10 of the 16 markets we track closed lower.
Europe’s mostly red so far this morning, with 14 of the 19 bourses we follow trading down as I type.
US equity averages are down to start the session: Dow by 287 points (0.85%), SP500 down 0.89%, SP500 Equal Weight down 0.87%, Nasdaq 100 down 1.16%, Nasdaq Comp down 1.17%, Russell 2000 down 1.07%.
The VIX sits at 22.15, up 10.64%.
Oil futures are up 0.73%, gold’s up 0.10%, silver’s up 0.59%, copper futures are up 2.92% and the ag complex (DBA) is up 1.20%.
The 10-year treasury is down (yield up) and the dollar is up 0.15%.
Among our 36 core positions (excluding options hedges, cash and short-term bond ETF), 9 — led by base metals futures, Vietnam equities, ag futures, silver and MP Materials — are in the green so far this morning. The losers being led lower by Albemarle, uranium miners, Amazon, Disney and long-term treasuries.
“Acceptance or denial does not alter a fact nor will reason bring about a necessary impact. What does is “seeing” the fact. There’s no “seeing” if there is condemnation or justification or identification with the fact.”
Have a great day!–J. Krishnamurti
Marty