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A Possible Recession Coming: What to Invest in During DifficultChart Analysis: The chart depicts the relationship between the M2 money supply, US Consumer Price Index (CPI), labor market trends, and historical recessions. Key observations include: Recessions: -Historical recessions are marked and correlated with significant economic downturns. -Each recession coincides with substantial drops in the labor market and fluctuations in the M2 money supply and CPI. M2 Money Supply and US CPI: -The M2 money supply (blue line) shows a steady increase over the years, reflecting ongoing monetary expansion. -The US CPI (orange line) follows a similar upward trend, indicating rising consumer prices and inflation. Current Economic Conditions: -The chart suggests a potential recession on the horizon, marked by the recent economic indicators and historical patterns. Bitcoin's Role in the Current Economic System: This is the reason the goverments wants to stop Bitcoin. People want out of their slave system where they create abundance for themselves with money printing while our labor value is always decreasing. Recession Expectations and Market Opportunities: Be open to a recession in the coming winter. The CME is having a meeting today where there is a 5% chance for a 0.25 rate cut and a 95% chance for a cut in September. Historically, there is a two-month window where the market booms and then rolls over into a recession after rate cuts. This supports the idea of a left-translated cycle and a longer multi-year cycle. For more information, see "The Fourth Turning." Investment Opportunities_ With this information, there can be good opportunities to get in early on investments in the precious metal markets like gold and silver, and also mining stocks. Production materials like copper, oil, and steel can be great shorting opportunities in the coming weeks and months. Conclusion: Understanding these economic indicators and historical patterns provides valuable insights for making informed investment decisions. While the future economic landscape looks challenging, strategic investments in precious metals and shorting opportunities in production materials could offer significant returns.
ECONOMICS:USM2Short
by martinxi5u4
2
US Labor Market Cools and Inflation Pulls BackTakeaways US labor market and inflation showed signs of cooling in June: The unemployment rate rose to 4.1% and CPI, a core inflation measure, increased just 3.3% year-over-year. US House can’t override Biden veto: US lawmakers fell short of the two-thirds majority needed to overturn Biden’s veto of a Congressional resolution to overturn an SEC bulletin that puts additional pressure on firms that custody crypto assets. The Labour Party won a decisive victory in the UK general election last week: The win ended 14 years of Conservative rule and left the direction of crypto regulation somewhat uncertain. Spot bitcoin ETFs experienced nearly $300 million in net inflows on Monday: It was the highest since early June, with buying led by BlackRock’s IBIT and Fidelity’s FBTC. VanEck and 21Shares have updated their S-1 registrations with the SEC to list spot Ethereum ETFs: The ETFs are expected to begin trading shortly after approval, which should come later this summer. Doja Cat's Twitter account was hacked to promote a Solana-based meme coin named $DOJA: The breach prompted the star to alert her Instagram followers that she was not responsible for the tweets. 🔄 Topic of the Week: The Render Network (RNDR) 🫱 Read more here
GEMINI:BTCUSD
by Gemini
Macro Monday 9~ Initial Jobless Claims MACRO MONDAY 9 Initial Jobless Claims Historical Analysis and Important upcoming levels Initial claims are new jobless claims filed by U.S. workers seeking unemployment compensation, included in the unemployment insurance weekly claims report. "Initial claims" refers to the government report on the number of workers applying for unemployment benefits for the first time following job loss First-time jobless claims can be a useful leading indicator because elevated numbers tend to lead to further economic weakness, and to decline ahead of a recovery Initial claims show the recent layoffs trend and does not a full picture of the labor market however it can provide more frequent data points indicating the trend in layoffs based on the recent decisions of U.S. employers. The layoffs trend can be particularly telling at economic turning points. With that in mind lets look at the chart and its historic patterns. The Chart The chart looks complicated but is incredibly simple and can be summarised as follows. - Recessions are in red - Increases to Initial Jobless Claims prior to recessions are in blue - It is clear that prior to recessions Jobless Claims typically increase but for how long and by what amount? - The min/max increase in claims prior to recession is between 35k - 127k - The min/max timeframe of increasing claims prior to recession is 7 - 23 months - The average of the above is a 71k claims increase over a 14 month period. - At present we are below that average at 49k increase over 11 months @ 230,000 claims. - I have set out levels on the chart for us to monitor going forward in line with the min and max claims amounts and timelines as above. We can monitor these levels on trading view going forward just by pressing play and seeing if we are nearing or hitting the indicative levels. - Once we reach the average increase amount at 252k or the average timeline of 14 months in Nov 2023, we are entering into higher risk recession territory. Currently, the max increase in claims prior to recession is projected to be at the level of 308,000 (based on historic claims) and the max timeframe is out to Aug 2024 (based on historic timeframes) thus indicating that between Nov 2023 and Aug 2024, subject to continued increasing initial claims (above the average level of 252,000) it is probable that there will be a recession within this time window (Not guaranteed). If initial claims fall below their recent low of 200,000 I believe this might invalidate the possibility of a recession or at least have a significant lagging effect on time horizon. At present this outcome seems unlikely but anything is possible and we can monitor this on an ongoing basis. The current yield curve inversion on the 2/10 year Treasury Spread provided advance warning of recession/capitulation prior to all of the above recessions however it provided us a wide 6 - 22 month window of time from the time the yield curve made its first definitive turn back up to the 0% level (See Macro Monday 2). September will be the 6th month of that 6 – 22 month window and thus we are closing in on dangerous territory very fast. From reviewing initial jobless claims we can see how from Nov 2023 we are stepping into a higher risk zone on this chart also (subject to continued higher increases in claims). Should we have claims higher than the average of 252,000 we will be confirming another step towards a higher risk of a recession. Factoring in yield curve inversion and the initial jobless claims we could consider the months of Sept-Oct 2023 as Risk level 1 (yield curve inversion time window opens) and Nov-Dec 2023 as stepping into a higher Risk Level 2 (Jobless claims average timeframe hit). Should the yield curve continue to move up towards being un-inverted and should Jobless Claims increase then Jan 2024 forward could be considered a higher Risk level 3. Adding to the above concerns is that M2 Money supply is still reducing (Macro Monday 8) and Global Net Liquidity is continuing to reduce (Macro Monday 4) as the S&P 500 is hitting a major resistance zone when accounting for M2 money supply (Macro Monday 8). At present it is clear that liquidity is reducing both globally and in the US. Currently fiscal stimulus appears to be filling the gaps and may be causing additional lagging effects to the changes we have seen imposed by Federal Reserve (balance sheet reduction and increased interest rates). Keep in mind that the Fed is also targeting higher unemployment to help quell the effects of inflation thus adding to the relevance of the Initial Jobless Claims numbers. Continued jobless claims are another metric that is not covered here today. Continued Jobless Claims accounts for the continuation of claims over a time period, thus indicating that those workers who made the first “Initial claims” have remained unemployed thereafter and have not managed to get new work. We might cover this in a future Macro Monday. Let me know if you want it sooner than later? We need all the help we can find in managing risk going forward and I hope all these charts can help you with that. We can monitor all these charts on my trading view just by pressing play and seeing where things are going. Regardless ill be providing updates along the way. Be safe out there PUKA
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ECONOMICS:USIJC
by PukaCharts
37
Deciphering Divergent Signals The Complex Economic LandscapeThe global economy continues to face profound uncertainties in the wake of COVID-19's massive disruptions. For policymakers and business leaders, making sense of divergent signals on jobs, inflation, and growth remains imperative yet challenging. In the United States, inflation pressures appear to be moderately easing after surging to 40-year highs in 2022. The annual Consumer Price Index (CPI) declined to 3% in June from the prior peak of 9.1%. Plunging gasoline and used car prices provided some consumer relief, while housing and food costs remained worryingly elevated. Core CPI, excluding food and energy, dipped to 4.8% but persists well above the Fed’s 2% target. Supply chain improvements, waning pandemic demand spikes, and the strong dollar making imports cheaper all helped cool inflation. However, risks abound that high prices become entrenched with tight labor markets still buoying wages. Major central banks responded with substantial interest rate hikes to reduce demand, but the full economic drag likely remains unseen. Further supply shocks from geopolitics or weather could also reignite commodity inflation. While the direction seems promising, the Fed vows ongoing vigilance and further tightening until inflation durably falls to acceptable levels. The path back to price stability will be bumpy. Yet even amidst surging inflation, the US labor market showed resilience through 2022. Employers added over 4 million jobs, driving unemployment down to 3.5%, matching pre-pandemic lows. This simultaneous inflation and job growth confounds historical norms where Fed tightening swiftly slows hiring. Pandemic-era stimulus and savings initially cushioned households from rate hikes, sustaining consumer demand. Early retirements, long COVID disabilities, caregiving needs, and possibly a cultural rethinking of work also constricted labor supply. With fewer jobseekers available, businesses retained and attracted talent by lifting pay, leading to nominal wage growth even outpacing inflation for some months. However, the labor market's anomalous buoyancy shows growing fragility. Job openings plunged over 20% since March, tech and housing layoffs multiplied, and wage growth decelerated – all signals of softening demand as higher rates bite. Most economists expect outright job losses in coming months as the Fed induces a deliberate recession to conquer inflation. Outside the US, other economies show similar labor market resilience assisted by generous pandemic supports. But with emergency stimulus now depleted, Europe especially looks vulnerable. Energy and food inflation strain household budgets as rising rates threaten economies already flirting with recession. Surveys show consumer confidence nosediving across European markets. With less policy space, job losses may mount faster overseas if slowdowns worsen. Meanwhile, Mexico’s economy and currency proved surprisingly robust. Peso strength reflects Mexico’s expanding manufacturing exports, especially autos, amid US attempts to nearshore production and diversify from China reliance. Remittances from Mexican immigrants also reached new highs, supporting domestic demand. However, complex immigration issues continue challenging US-Mexico ties. The pandemic undoubtedly accelerated pre-existing workforce transformations. Millions older employees permanently retired. Younger cohorts increasingly spurn traditional career ladders, cobbling together gig work and passion projects. Remote technology facilitated this cultural shift toward customized careers and lifestyle priorities. Many posit these preferences will now permanently reshape labor markets. Employers clinging to old norms of in-office inflexibility may struggle to hire and retain talent, especially younger workers. Tighter immigration restrictions also constrain domestic labor supply. At the same time, automation and artificial intelligence will transform productivity and skills demands. In this context, labor shortages could linger regardless of economic cycles. If realized, productivity enhancements from technology could support growth with fewer workers. But displacement risks require better policies around skills retraining, portable benefits, and income supports. Individuals must continually gain new capabilities to stay relevant. The days of lifelong stable employer relationships appear gone. For policymakers, balancing inflation control and labor health presents acute challenges. Achieving a soft landing that curtails price spikes without triggering mass unemployment hardly looks guaranteed. The Fed’s rapid tightening applies tremendous pressure to an economy still experiencing profound demographic, technological, and cultural realignments. With less room for stimulus, other central banks face even more daunting dilemmas. Premature efforts to rein in inflation could induce deep recessions and lasting scars. But failure to act also risks runaway prices that erode living standards and stability. There are no easy solutions with both scenarios carrying grave consequences. For business leaders, adjusting to emerging realities in workforce priorities and automation capabilities remains imperative. Companies that embrace flexible work options, prioritize pay equity, and intelligently integrate technologies will gain a competitive edge in accessing skills and talent. But transitions will inevitably be turbulent. On the whole, the global economy's trajectory looks cloudy. While the inflation fever appears to be modestly breaking, risks of resurgence remain as long as labor markets show tightness. But just as rising prices moderate, the delayed impacts from massive rate hikes threaten to extinguish job growth and demand. For workers, maintaining adaptability and skills development is mandatory to navigate gathering storms. Any Coming downturn may well play out differently than past recessions due to demographic shifts, cultural evolution, and automation. But with debt levels still stretched thin across sectors, the turbulence could yet prove intense. The path forward promises to be volatile and uneven amidst the lingering pandemic aftershocks. Navigating uncertainty remains imperative but challenging.
TVC:US10YEducation
by BitcoinMacro
5
Virulent inflation raises pressure on the Bank of EnglandThe inflation battle is far from over in the UK. In fact, the nature of inflation is taking a new form as the root cause moves away from external to more domestically driven shocks. While the headline rate remained unchanged at 8.7%yoy in May, core inflation accelerated to 7.1% in May from 6.8% in April, marking the highest rate since March of 19922. In response the Bank of England (BOE) raised interest rates by a bumper 50Bps to a 15-year high. While the Federal Reserve (Fed) and the European Central Bank (ECB) have made progress on bringing down inflation, the BOE still has some ways to go. Current market pricing assumes the terminal policy rate will go to 6% by year end3. UK inflation proving to be virulent The UK has the most severe entrenched inflation problem across developed markets. The domestically driven increase of services prices advanced from 6.9% to 7.4%yoy in May4. As services are labour intensive, they are being impacted by strong wage gains. Employment growth has been stronger than projected underscoring continued robust demand for labour. This high demand caused the rise in weekly average earnings (ex-bonus) to 7.5% in April5, well above the BOE’s forecast. Brexit has been partly responsible for the rise in wages. Brexit reduced the mobility of European workers. The resulting lack of non-qualified workers has not yet been reabsorbed. The situation was clearly exacerbated during the Covid pandemic that left a large part of the workforce sick. The shortage of workers in the UK continues to weigh on the supply side and has been the key reason inflation has remained stubbornly high. The resilient gains in employment (up 1.2% in April 20236) have allowed UK households to continue spending on services. Thereby contributing to higher services inflation, prices for recreational and cultural goods and services rose by 6.8%yoy in May 20237. At the same time, due to the shift away from floating rate mortgages towards fixed rate products over the last decade, the pass through of higher rates is taking longer to feed through the economy, thereby enabling the consumer to appear more resilient. However, headwinds are appearing from higher mortgage rates, with at least 800,000 fixed mortgages due to move on to significantly higher rates in H2 20238. Rents have also been rising, at an annualised pace of 5.6% in May compared to 3.2% in 20229. This is likely to place further pressure on real disposable incomes and simultaneously fuel core inflation higher. The Institute for Fiscal Studies estimates that higher interest rates will cause the average mortgage holder to suffer an 8.3% fall in disposable income compared to a scenario where rates remained at March 2022 levels. For 1.4 million of those borrowers, disposable income will fall by more than 20%10. BOE guided dovish The BOE’s guidance implied that no further rate hikes should be needed bar evidence of more persistent inflationary pressures however the market ignored this. Money markets priced a terminal rate of 6.25% by February 202411. The BoE did not rule out further rate increases should the inflation data continue to be unfavourable. However, they did downplay the unexpected surge in core inflation in May owing to special contributing factors such as the sharp rise in vehicle excise duty and the erratic contribution of airfares and holiday packages. The BOE also highlighted that forward looking indicators are pointing to material falls in future wage inflation which could then lower the pressure on services prices. We share that view, as producer price inflation which tends to serve as a leading indicator for consumer price inflation, eased more than expected in May. The June composite Purchasing Managers Indices (PMI) dropped for a second month in June, showing price pressures easing across the board, suggesting the economy could be turning. Sterling Positive rate surprises are not always positive for the currency. The Pounds muted response (-0.17%)12 to the BOE meeting despite the hawkish surprise and its negative reaction (-0.21%)13 to the hawkish May inflation data suggest that the BOE is prepared to endure a deeper slowdown in order to bring inflation under control. As a growth sensitive currency this is likely to remain an important headwind for the Pound. Sources 1 Bloomberg as of 23 June 2023 2 Bank of England as of 22 June 2023 3 Bloomberg, as of 23 June 2023 4 Bank of England as of 21 June 2023 5 Office for National Statistics as of 31 May 2023 6 Office for National Statistics as of 31 May 2023 7 Bank of England as of 22 June 2023 8 Source: Bank of England, Bloomberg as of 22 June 2023 9 Office for National Statistics, as of 22 June 2023 10 Institute for Fiscal Studies as of 30 April 2023 11 Bloomberg as of 23 June 2023 12 Bloomberg GBP/USD as on 22 June 2023 13 Bloomberg GBP/USD as on 20 June 2023
ECONOMICS:GBINTR
by aneekaguptaWTE
Analyzing Inflation: COVID-19, Energy, Conflict & LaborInflation, a critical financial and economic indicator, has been significantly impacted by various factors in recent years. This article delves into the influence of COVID-19, changes in work patterns, labor market shifts, energy sector decisions, and the Russia-Ukraine war on inflation, presenting a comprehensive analysis of our present financial landscape. COVID-19 and Supply Chains: A Recipe for Inflation The global pandemic, COVID-19, significantly disrupted supply chains worldwide. With a combination of limited supply and robust or surging demand, the result was inevitable - a price increase, a key driver of inflation. Rising costs of materials, labor, energy, and transportation, all amplified by the pandemic, made goods more expensive to manufacture and transport, further contributing to inflation. The aftermath of these disruptions led to a ripple effect: a rise in supply chain costs. Consumers facing higher prices found themselves with reduced disposable income, which could, in theory, lower demand. However, the essential nature of many goods affected by these disruptions likely negated this potential offset, fueling inflation further. In the long run, these disruptions could lead to persistent inflation. The pandemic has exposed the fragility of 'just-in-time' inventories and the impact of underinvestment in global commodity supply chains, adding to inflationary pressures. Consequently, inflation may become a more permanent fixture, disrupting business planning and forecasting and adding another layer of complexity to the economic environment. Labor Market Shifts: From Crisis to Recovery The pandemic has considerably affected the labor market, resulting in significant shifts and shortages across various sectors. The initial outbreak led to severe job losses, with the global unemployment rate peaking at 13%. However, as economies start to reopen, we're seeing an interesting trend: people voluntarily leave their roles, even as worker demand increases. This labor shortage, induced by changing demographics, border controls, immigration limits, and the call for better pay and flexible work arrangements, presents another challenge in our economic landscape. Furthermore, the acceleration of digitalization and the gig economy could have enduring effects on labor supply and productivity. The crisis has potentially long-term implications, like automation's role in slowing the employment recovery in service occupations. Remote Work: A Double-Edged Sword The rise of remote work, while offering significant societal and economic benefits, also carries potential inflationary effects. Increased demand for houses/apartments, home office equipment, utilities, and other home-centric products and services has led to price hikes, accelerating inflation. Moreover, while remote work has the potential to boost productivity and create new job opportunities, it also brings challenges. Difficulties in collaboration, communication hurdles, and blurred work-life boundaries could negatively impact productivity, painting a more complex picture of remote work's overall effect on productivity and inflation. Energy Decisions: A Balancing Act The decision to reduce investments in nuclear energy and fossil fuels can influence inflation and the overall energy market. A decline in energy production can lead to price increases due to supply-demand imbalances, contributing to inflation. Moreover, reduced domestic energy production may increase dependence on imported energy, which, if more expensive or if international energy prices rise, could also lead to inflation. Transitioning to green energy without adequate investment and planning could lead to shortages and disruptions, driving up energy prices and contributing to inflation. While renewable energy technologies are advancing rapidly, they cannot fully replace the capacity provided by nuclear and fossil fuels in many countries. This could lead to energy shortages and price increases, particularly if the transition to green energy outpaces the technology's readiness. The variability of renewable energy sources, such as wind and solar, presents another challenge. Without adequate energy storage and grid infrastructure investment to manage this variability, energy supply disruptions and price spikes could become more common. Moreover, a rapid transition to green energy could displace existing energy jobs before adequate green energy jobs are created. This could lead to economic instability and potentially contribute to inflation. While the long-term costs of renewable energy can be lower than fossil fuels, the initial investment required to build renewable energy infrastructure can be high. Higher energy prices can pass these costs to consumers, contributing to inflation. In conclusion, while the transition to green energy is crucial for addressing climate change, this transition must be well-planned and well-managed. Policymakers must strike a careful balance between the urgency of climate action and the need to maintain energy security and economic stability. The Russia-Ukraine War: Geopolitical Inflation The ongoing conflict between Russia and Ukraine has also played a role in driving inflation. The war has disrupted the supply of essential commodities such as oil, gas, metals, wheat, and corn, pushing their prices upwards. These nations are major suppliers of these commodities, and their reduced supplies have led to sharp price increases worldwide. Furthermore, the conflict has exacerbated global supply chain disruptions, already strained by the COVID-19 pandemic. This has led to heightened inflationary expectations among businesses and consumers. Additionally, the war has significantly increased oil and gas prices, particularly in Europe, directly impacting inflation and household spending. The war has also weakened global economic confidence, further fueling inflationary pressures. Countries already grappling with financial challenges, such as Lebanon and Zimbabwe, have been severely impacted by the inflationary effects of the Russia-Ukraine war. Overall, the conflict is estimated to add about 2% to global inflation in 2022 and 1% in 2023, compared to pre-war forecasts. Conclusion In conclusion, the dynamic interplay of the COVID-19 pandemic, remote work, labor market shifts, energy sector decisions, and the Russia-Ukraine war has significantly influenced inflation. Policymakers, economists, and businesses must navigate this complex landscape to develop effective strategies that mitigate inflationary pressures while promoting sustainable economic growth. As we move forward, we must continue to monitor these factors to understand their ongoing effects on inflation and the broader economy.
TVC:US10Y
by BitcoinMacro
US Weekly Fundamental Recap (RE ALIGNMENT)Let try this again, hard to get this lined up nicely... This week we saw some interesting indicators start to decline. In industry: More volatile PMI manufacturing saw further pull below 50 while PMI services have now just crossed the threshold. PMI services has only crossed below 50 during a few periods in the last 25 years. Labor markets Labor statistics continue to remain fairly static. They are expected to weaken as the federal funds rate continues to inch higher, at least slightly, while easing is still moderately applied. Thoughts Zooming out to a broader look ahead I believe we will be back to visit 2019 lows, at a minimum. Best case we see a retest of a long supporting moving average at a point CPI Y/Y and banking rates are both heading in the right direction. If this were to play out there would be an addition 30-35% pullback in the NAS/US500 while these metrics return from their hopeful extremes. Worse-er case, we lose the monthly 100 EMA and slip back to erase 9-12 years of "industry" gains (or to present a wonderful buying opportunity @ ~85% discount!). The timing is everything with this one, when do we approach that price area. Sooner is not better for its strength IMO. If we see confluence between the NAS Monthly 100EMA, CPI / rates sub 4%, bond bounce back, US dollar off its bully run yadda yadda - all in. If we get there too soon; before rates have stabilized or begun their decline, CPI is continuing to gap target significantly, the DXY is on the rise / holding ect - that EMA will become a good resistance for my short entry. Happy trading - stay agile
FX:NAS100Short
by Scott_The_Chartist
2
US Weekly Fundamental Recap & macro thoughtsThis week we saw some interesting indicators start to decline. In industry: More volatile PMI manufacturing saw further pull below 50 while PMI services have now just crossed the threshold. PMI services has only crossed below 50 during a few periods in the last 25 years. Labor markets Labor statistics continue to remain fairly static. They are expected to weaken as the federal funds rate continues to inch higher, at least slightly, while easing is still moderately applied. Thoughts Zooming out to a broader look ahead I believe we will be back to visit 2019 lows, at a minimum. Best case we see a retest of a long supporting moving average at a point CPI Y/Y and banking rates are both heading in the right direction. If this were to play out there would be an addition 30-35% pullback in the NAS/US500 while these metrics return from their hopeful extremes. Worse-er case, we lose the monthly 100 EMA and slip back to erase 9-12 years of "industry" gains (or to present a wonderful buying opportunity @ ~85% discount!). The timing is everything with this one , when do we approach that price area. Sooner is not better for its strength IMO. If we see confluence between the NAS Monthly 100EMA, CPI / rates sub 4%, bond bounce back, US dollar off its bully run yadda yadda - all in. If we get there too soon ; before rates have stabilized or begun their decline, CPI is continuing to gap target significantly, the DXY is on the rise / holding ect - that EMA will become a good resistance for my short entry. Happy trading - stay agile
FX:NAS100Short
by Scott_The_Chartist
1
Is the US Economy Actually adding more jobs than expected?If you have been living under a rock for the past few days, unless you are not an economic savvy, the Bureau of Labor Statistics has released its newest Non-Farm Payrolls much above the expectation. The NFP rose by 263,000 last month, compared with an expected 200,000. At first, my reaction was that the FED will have to keep raising interest rates, especially as the US dollar reacted to this news by jumping 0.8%. However, I was skeptical as to how NFP jobs increased but the unemployment rate remained steady at 3.7% in an economy that is starting to experience drawdowns from inflation. So I made a research to analyze exactly what is going on. 1. What is happening in the US labor market? Today the NFP is at ~270,000 jobs, similar to mid-2018 when the labor market was defined as strong. It is much lower than the peak job creation in 2021 but 70,000 extra jobs compared to the expectation is a major difference. 2. What is happening with wage growth in the US labor market? Wage growth has increased by 0.6% month-over-month. This is way too strong for the FED's target of 2% in inflation. But why is it so high? Well, one of the reasons is that the supply of labor is not coming back. The participation rate remains way below pre-pandemic levels, even when accounting for an aging population. So if labor participation is low, job creation must be low to slow inflation, yet, the labor market appears to be healthy. Nonetheless, I wrote an analysis in October challenging the FED's data collection on job creation. "Once consumers have reached their credit limit, they will most likely look for another job. “About 38% of American workers have looked for a second job, while an additional 14% plan to” (LA Time, 2022). This justifies the reasons for more job creation in the U.S. economy as emphasized by the Biden Administration and the Fed, however, it is mostly people looking for a second or third job." Credit debt is increasing at an all-time high due to inflation. "U.S. households are spending $445 more every month due to inflation" (Lacurci G, 2022). So those who cannot keep up with their bills have to work more jobs or extra time. This makes total sense, especially when the Household Job Survey shows no jobs added in the past 8 months, while the Establishment Survey shows 2.7 million jobs added, which is the one used by the FED. Why such a large difference between the Household Job Survey and Establishment Survey? The answer lies in how the different surveys are run. For instance, the household survey counts people holding multiple jobs as one employed person. While the establishment survey counts all the jobs created, even if it is a second or third job. Based on the analysis I previously published, at least 700,000 Americans have had a second or third job in the last 12 months to make ends meet. 3. Where are jobs being created and lost? Being created: leisure, government, education, and healthcare. Being lost: goods, transportation, retail, construction, and utilities. Conclusion: The NFP survey is informing the market about Powell's next decision in December. The strong nominal wage growth and "strong" job creation argue there could be further rate hikes and hawkish talk from grandfather Powell. It is imminent before we will start to see weaknesses in the labor market. It is imperative to understand when will the turnover point of the labor market be and how bad to best position yourself, hence, we can start to see a FED pivot in early 2023 as the labor market weakens. This is for personal recording but feel free to comment and argue.
ECONOMICS:USNFP
by ssavi
US nonfarm payrolls exceed estimates againEUR/USD 🔼 GBP/USD 🔼 AUD/USD 🔼 USD/CAD 🔽 USD/JPY 🔽 XAU 🔼 WTI 🔼 The latest US nonfarm payrolls data has reflected a tight labor market, increasing 261,000 jobs in October, against projections between 200,000 and 240,000. Meanwhile, the unemployment rate has increased slightly to 3.7%, though the market expected only 3.6%. However, brief hopes for China to lift pandemic-related restrictions have strengthened major currencies toward the greenback. EUR/USD climbed and stabilized at 0.996, edging toward parity. GBP/USD added almost 220 pips to 1.1375, the Aussie/dollar pair has gained the most by rising more than 3.0% to 0.6478. USD/CAD dropped over 270 pips to 1.3478, and USD/JPY retreated to 146.59. Both stocks and commodities have recovered, and all three major stock indices have increased over 1.2% on Friday. Spot gold jumped more than $50 to $1,681.38 an ounce, as WTI oil futures returned above the $90.00 level to $92.61 a barrel.
by Mitrade_official
Inflation / Unemployment / Stocks2022 is most comparable to 1978 in terms of the current jobs & inflation situation. Seven decades of history concerning the 3, shows that the current drop in stocks is more likely a correction and not the start of a true bear market. 1972-73 scenario is 1 against 6 odds (and that's after demoting 1978 to equal the others). It also usually takes a long time for unemployment to carve a bottom. Even if we assume that right now it's doing so, we're still too early.
FRED:UNEMPLOY
by Indotermes
Back to normal! Hurray!130 years ago the USA became the world largest economy, and roughly 60 years ago they were the most far ahead. Today their lead is the smallest it has been in generations. Also, the share of the world GDP that the west makes keeps getting smaller. On top of that the US is pulling out of Afghanistan and reducing their world presence if I got that correctly, and France is pulling out of Mali and losing influence in Africa. Centrafrique recently made a movie praising Russia and apparently mocking France called "tourists" and fired their prime minister that was friends with France which as a result of Russia presence is pulling away. The relevance of the "big 4" has faded so much that each time I talk about France someone asks me "why?". No one ever asked me why I speak of China. Here's your proof. France is even expected to not be in the top 10 economies by 2050. China share of world GDP peaked in the early 1800s with 33%, and India centuries earlier. France+UK+Germany share of world GDP peaked in 1900 with close to 25% (probably 30-35% nominal). And the USA share of world GDP peaked in 1950 with a little above 25% (nearly 40% in nominal). The peak of the middle east share of world GDP probably peaked 3000 years ago, and the persian empire is still to this day the largest ever in % of world population, nearly half of the entire planet lived in it. I just thought that was interesting, and shows nothing lasts forever. The "big 4" populations are getting older, with boomers getting close to retirement and a third of the cohort 5 to 15 years away from the life expectancy number. They also reached their working age population peaks: - USA: in 2019, sucking in millions of migrants to make up for bad demographics, - Germany: in 2019, same thing as the USA, "migrants welcome", they try so hard to attract them at any cost, - France: in 2018, it's more than a covid slump here - The UK: No peak, people still breed there, weird place If the US and Germany have not yet peaked, and the drop (500 thousand in Germany and 2 million in the USA) was not from the very top, the top is not far. It is not possible to entirely replace a population, and if they did that it would be entirely different countries. At some point there are just too many boomers to replace. For reference, Greece had a double top between 2004 and 2010, and Russia it's hard to say but it dropped violently in 1990. And let me tell you, the 90s were not happy days in the east 🙃 Not happy days at all. The entire world labor force peaked in 2019. Between 2019 and 2020 the labor force of Mexico collapsed from 58 million to only 54, much of it was probably sucked by the USA. Trust me, this is a gigantic drop, enough for a big fat depression. Not sure if their GDP has jumped out of the window yet. The US have a labor force of 165 million. And Mexico if you translate 5 years forward really have 50 million at best. Even if the US sucked in half of all Mexico they'd fail to replace their boomers. Birth control and abortions worked really well. As you can see the economy of Spain which is already bad will collapse. If everything goes well it will contract 50%! Of course, everything will not go well and bad things will compound! Similarly, using the Euromomo bulletin and population numbers (there are twice as many 70-75 year old boomers today than 70-75 year olds 5 years ago!), it is trivial to figure out the 10% covid spike in max weekly death will be a TENTH of what is too come... IF NOTHING GOES WRONG. BEST CASE SCENARIO. And as Russia has shown, things go wrong. So I think they spike won't reach only 180k but way more. Negatives will compound as ALWAYS. EVERY SINGLE TIME. I'm not saying a miracle is impossible, but you know it. Twice as less doctors, twice as many seniors to take care of. Taxes are already enormous. The west spends about 50% of the GDP. You literally can not keep the same standard of living even if you taxed all workers 100% and they magically were able to live with $0. Ah, and let's not forget "IQ points have declined by 7 points a generation since 1970". And let's not forget old people vote. Ye, lockdowns, mass panic, and more. It will not end. You can vaccinate against a coronavirus variant, you can not vaccinate against death. You stop 1 virus, 10 other infectious disease will come, and heart disease, and cancer, and more. Ah, and it is well known that economic contraction leads to a decline in life expectancy. And don't get me started with depressions and alcoholism. Russia men over 50 are all MIA. Women have more endurance, they are more resistant (not just to disease). Even with physical strength, men's is more explosive, short term. Men are not good at sucking it up and being humble. LOL I'd rather be dead than not be a winner. Better luck next time. If I wasn't overconfident (I see myself as an all powerful Poseidon) I don't think I'd see life as worth living. I'd just go next. But wait there is more. I will avoid politics, so I'll skip the best part. But let me just mention that Vladimir Putin explained that empires all had the same problem. They ignored problems. They think they are so powerful they can crush problems. Soviet Union did it, Romans did it, Persians did it. And so on. Putin only mentions the USSR, but it always works the same way. Empire make little mistakes, and find quick fixes, "bully these opponents", "give necklaces to these", "print some money for those", and so on. But problems accumulate, and there comes a time when they cannot be dealt with. "The US, with great determination, is following straight in the Soviet Union footsteps". The USD rallied after a FED announcement, probably a really short term rally, funny to think of the suckers that got scammed here. I wonder if Japanese investors are not pulling out from the US stock market. Might be the case. I think now is the time Gold will shine. This is it. The poor suckers selling are the same poor suckers that sold in 2008: They will buy only if it gets to 3000. What was the elected demagogue mastermind that sold gold reserves very recently? Last bull market had the brown bottom, this one has the whatever his name was bottom. Let the cowards wait for 3000, and the braindead incompetent elected demagogues with a stupid smiley look on their faces sell to me. I'll take all that risk, and I'll charge a huge premium for it. If the price keeps going up like 2008 I will buy on every single pullback.
TVC:GOLDLong
by MrRenev
6
UK labor market gives the BoE's room for maneuverThe main event of yesterday in terms of macroeconomic statistics was the publication of statistics on the UK labor market. The data pleasantly surprised. Recall that we expected rather weak statistics - the British economy has been painfully unconvincing in recent times. Nevertheless, the UK economy for three months until November created 208K new jobs, which is almost 2 times higher than analysts' expectations. The average weekly wage also came out better than expected (+ 3.2%). Against the background of such data, supporters of the fact that the Bank of England will lower the rate at the next meeting sharply fell silent. Indeed, data on the labor market show that the Central Bank has no reason to rush. This sharply increased the chances that the bet will be left unchanged. The pound, of course, reacted positively to statistics and a shift in market expectations. Recall in this regard to our recommendation to buy a pound on the slopes. In general, for Europe yesterday was a good day. Indices from the ZEW Institute came out very good (relative to past data) both in the Eurozone as a whole (the expectations index came out almost 2 times higher than in December) and in Germany (the expectations index was +26.7 with a +15 forecast). So the growth of the euro looked quite natural. But for its continuation, this impulse will be clearly not enough. In this regard, Thursday looks more promising: on this day, the ECB will announce its decision on the monetary policy parameters in the Eurozone. But we'll talk about this in tomorrow's review. And today, the main event will be the announcement of the Bank of Canada’s decision on monetary policy parameters. Experts do not expect any changes. We are also inclined to believe that the bid will be left unchanged. But given the general trends in the development of the global economy in general and in Canada, in particular, there are risks of a rate reduction. Moreover, the reduction potential is far from exhausted, unlike the ECB or the Bank of Japan. Considering that the USDCAD pair has been treading water for two weeks now, fluctuating in the range of 50 points, there is a possibility of a strong movement in pairs with the Canadian dollar today. Moreover, the direction of movement is not obvious. Our recommendation in this regard is to work along the way. That is, if the pair goes above 1.3090 - we buy, if below 1.3020 - we sell.
Long
by Trade24Fx
Time "X" is getting closer, Boris may be celebrating his victoryIn yesterday’s review, we already noted that this week may be decisive for several financial assets, and the global economy as a whole. On December 15, the United States may introduce tariffs on goods from China and thus bring trade wars to a new level. It's entirely up to an agreement between the parties. Even though we have heard positive statements for more than a month, the situation looks more and more menacing day by day. Although the probability of the successful completion of the first phase of trade negotiations between the United States and China is quite high, we will continue to look for points to buy safe-haven assets today. This recommendation will remain relevant until the actual conclusion of the contract. Meanwhile, in the foreign exchange market, is getting ready for Johnson's victory in parliamentary elections in the UK. According to recent polls, the Conservative Party will be ahead of the Labor Party by at least 10%. Recall, for Brexit, this means the end of the story - Johnson will be able to present his version of the deal Britain will finally leave the EU with the deal. For the pound, this is a powerful fundamental positive background. In this regard, we continue to recommend the purchase of the pound. It may well grow in the foreseeable future by several hundred pips. Since we are talking about the pound, we note that today will be published statistics on the UK. So you need to act with an eye on the data on GDP, trade balance and industrial production. Speaking of our other trading ideas for today, they are unchanged. Oil purchases still seem like a great idea to us in light of the latest OPEC + decision. Dollar sales are also promising.
by Trade24Fx
1