High-level macro-market insights, actionable economic forecasts, and plenty of friendly candor to give you a fighting chance in the day's financial fray.
I have to wonder at this point if the most likely outcome isn't a recession really soon, starting late Q3 or early Q4, if for no other reason than the two main camps are recession next year or no recession at all but soft landing. given the history of markets doing the unexpected, I suspect a recession before autumn is the least expected outcome around.
thanks for an excellent description of the current situation,
I don't envy the market prognosticator's job right now. So much conflicting data. I just saw that last week marked a 52 week high in the number of US stocks hitting a 52 week high, including the Dow Transports Average. The Dow Industrials average is also breaking upward to a three year high. These sectors accelerating generally correspond to continuing bullish equity performance.
And yet....the credit markets are a disaster in the making.
Add to that global liquidity "has contracted by $1.6 trillion USD over the last three months when aggregating the balance sheets of the Fed, European Central Bank, Bank of Japan and the Bank of China, while accounting for balances in the Treasury General Account and Reverse Repo Facility as counteracting forces for the liquidity tide."
US equity indices hitting 52 week highs amidst global liquidity drying up makes for a tricky forecast indeed.
A chart dating back to 1960 of the 10yr - 3mo T-bill rate shows a market sell off and a recession when ths indicator goes below zero. as it is now. The only time we had a Mkt selloff without this indicator bolow zero was 1987. Stocks bottom and start to rise when this indicator becomes positve and continues to rise. Stay in bills untill this happens.
Tick tock...heard louis gave and have read his guest posts here, no recession in his view. Credit event, bear market in Treasuries and long duration stonx seems pretty likely to me.Other than oil supply shortfalls, (how close is the peak in the Permian), hard for me to guage how global oil demand would hold up in the above scenario. India doesn't take up China's slack overnight, for example. Just an item highlighted in past Haymakers I wonder about
Excellent job (again) David!
The "buy what goes up, sell what goes down" model works well.....until it doesn't.
I think you and a handful of good intuitive, experienced market participants will have much more respect when (not if) you are proven correct.
Keep up the good work,
Kevin
I have to wonder at this point if the most likely outcome isn't a recession really soon, starting late Q3 or early Q4, if for no other reason than the two main camps are recession next year or no recession at all but soft landing. given the history of markets doing the unexpected, I suspect a recession before autumn is the least expected outcome around.
thanks for an excellent description of the current situation,
I don't envy the market prognosticator's job right now. So much conflicting data. I just saw that last week marked a 52 week high in the number of US stocks hitting a 52 week high, including the Dow Transports Average. The Dow Industrials average is also breaking upward to a three year high. These sectors accelerating generally correspond to continuing bullish equity performance.
And yet....the credit markets are a disaster in the making.
Add to that global liquidity "has contracted by $1.6 trillion USD over the last three months when aggregating the balance sheets of the Fed, European Central Bank, Bank of Japan and the Bank of China, while accounting for balances in the Treasury General Account and Reverse Repo Facility as counteracting forces for the liquidity tide."
US equity indices hitting 52 week highs amidst global liquidity drying up makes for a tricky forecast indeed.
A chart dating back to 1960 of the 10yr - 3mo T-bill rate shows a market sell off and a recession when ths indicator goes below zero. as it is now. The only time we had a Mkt selloff without this indicator bolow zero was 1987. Stocks bottom and start to rise when this indicator becomes positve and continues to rise. Stay in bills untill this happens.
I listened to that Podcast. Scary indeed! Nice writing, David.
Terrific read, and appreciate the referral to the Mike Green interview as well - many thanks.
I keep seeing Mike Green's name pop up on Bill Fleckenstein's site, and I'm behind on Wealthion interviews... will definitely check it out ASAP.
Tick tock...heard louis gave and have read his guest posts here, no recession in his view. Credit event, bear market in Treasuries and long duration stonx seems pretty likely to me.Other than oil supply shortfalls, (how close is the peak in the Permian), hard for me to guage how global oil demand would hold up in the above scenario. India doesn't take up China's slack overnight, for example. Just an item highlighted in past Haymakers I wonder about