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Economy

The ECB balance sheet vs the FEDThe head of the European Central Bank #ECB Madame Lagarde claims the #ECB is at a different point in time to the Federal Reserve #FED. She claims it is premature to talk about winding down the Quantitative Easing (#QE) as the Fed has indicated a schedule to roll back liquidity. The graph indicates otherwise interestingly the EUD USD liquidity indicates the Fed continues to fund the ECB balance sheet therefore QE inflation has no end during 2022.
ECONOMICS:EUCBBSShort
by edrodven
5
BLX and the Global EconomyUsing as a reference tool to compare the growth of Bitcoin (BLX chart) with the Global Economy as a metric and finding a solid bottom for the Global Economy metric at the 1.618 retracement in late September 2023 BLX (orange/white) candles Global Economy (blue/white candles) Global Economy Includes: ------------------------------- US total assets Central Bank Assets for Euro Area * Euro to US Dollar Rate less Reverse Repurchase Agreement (Reverse REPOs) less Liabilities and Capital: Liabilities: Deposits with F.R. Banks, Other Than Reserve Balances: U.S. Treasury, General Account China Central Bank Balance Sheet * Chinese Yuan to United States Dollar Total Assets for Japan * Japanese Yen to United States Dollar NOTE: I have never tried to run a compare in Tradingview so I hope that the BLX compare continues to run alongside with the Global Economy. If this does not run in tandem I will update with monthly snapshots as a feel that this is an important metric in measuring how closely BTC could outpace or under-perform the Global Economy as whole. ▀▀█═╡🤡╞═█▀▀
FRED:WALCL
by Miles-Maddox
INFLATION REBOUND ?Consumer Confidence vs INFLATION The Red Phase was the fall of the CC which lead the Inflation data fall. -> Of course, when consumers doesn't trust the market, spending fall. The Yellow Phase describes the effect of the CC falling: IF FALL. As leading indicator, the rebound of CC show the expansion which is represented by the Green Phase. -> As we can see, as soon as CC take points, the Inflation rebound too. Not like 2008, this time, CC took 30pts. ⚠️I envisaged a continuation of the fall of the Inflation data but a big chance of rebound in the Inflation. Moreover, the last seen consolidation of the inflation and the rebound of the CC at the pic of the Inflation is worrying. We see Strong Economic datas even showing signs of expansion. This delay between inflation and CC has not been that big during 2008. At the first rate cut there is a big chance of explosion of the Inflation as seen in 2006/2008 or pre-covid. ⚠️
ECONOMICS:USIRYYLong
by ThinkAboutIt75
Improved CPI, but Market Collapse – What is Happening?Just about 1.5 years ago, inflation reached the highest point in recent decades. The January inflation number for 2024 was released on February 13th. Its CPI has improved from 3.4% for December to 3.1%. However, the major US stock indices collapsed more than 1% on the same day. Why is there such nervousness surrounding improved inflation, and what are its implications? Mirco E-minin Dow Jones Futures & Options Outright: 1.0 index points = $0.50 Symbol code: MYM Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
ECONOMICS:USIRYYShort
by konhow
Macro Monday 20 ~ The Philly Fed IndexMacro Monday 20 Philadelphia Fed Manufacturing Index While the Philly Fed Manufacturing Index (PFMI) is a regional report generated from surveys in Philadelphia, New Jersey, and Delaware by the Federal Reserve Bank, it is particularly useful as it provides an advance indication of the Purchasing Managers’ Index (PMI) report which is released up to a week after the PFMI (the PMI surveys the entire US whilst the PFMI only surveys the regions mentioned above). The Philly Fed Index is released this Thursday 16th November 2023 and will provide an advance indication as to what to expect from the PMI released Friday 24th November 2023. Both are a review the prior months survey data, October 2023. The PFMI index dates back to 1968 and is similar to the PMI, the Federal Reserve completes surveys and asks businesses about new orders, shipments, employment, inventories and general business activity, prices paid, prices received, capital expenditures as well as future expectations for business. A reading= 0 is stagnation <0 = contraction >0 = expansion The current reading is -9 so we are contractionary territory. We did fall as low as -31.3 on the April 2023 release. The Chart The main indications from the chart are as follows: The Orange Zone ▫️ When the PFMI remains in the orange zone for >10 months it has always coincided with a Recession - We are in presently in this zone 16 months with 2 brief monthly jumps out of it. I think its safe to say we are 10 months+ in the orange zone which historically has always coincided with a recession. The Red Zone ▫️All Recessions confirmed a reading below -22 on the PFMI (this is below the red line into the red zone on the chart) - In April 2023 we hit a low of -31.3 which is well into the red zone (sub -22). We have since risen above the neutral 0 level to high of +12 in Aug 2023 however we have since fallen back down into the -13.5 (Sept) and -9 (Oct). The Nov Release is due this Thursday 16th Nov (and is actually the reading for Oct - released in Nov) Are we already in a mild Recession? You can see that in March 1970 we reached a similar PFMI level of -31.3, the same level as in April 2023 (there is a dashed red line to illustrate this on the chart). March 1970 was the middle of the 1969-70 Recession which was a mild recession that ran for 11 months from Dec 1969 – Nov 1970. Whilst it was a mild recession as to its impact on the general economy, there was till a 34% decline in the S&P500. The 1969-70 Recession has many similarities to some of our current economic predicaments, with the main factors leading to the 1970 recession being tighter monetary policy, rising oil prices, rising inflation, and slowing growth in Europe and Asia. Sound familiar? From Jan – Apr 2023 the Unemployment Rate was at the lowest levels seen since back in 1969 (at 3.4%). For 8 months (Sept 1968 – May 1969) the unemployment rate was down at 3.4%. We reached this level in January 2023 and oscillated there until April 2023 (only 4 months). Since then the Unemployment rate has risen sharply from 3.5% to 3.9% (July – Oct 2023). Interestingly, this move in the unemployment rate from 3.5% to 3.9% also happened from Dec 1969 to Jan 1970 and marked the start of the recession. Could this be an indicator that we stepped into a recession In July 2023? The orange zone and red zone on the chart are triggering a confirmation nod of a recession. During the recession of 1969-70 the unemployment rate topped at 6.08% in Nov 1970, this is something we have not seen yet however we seem to be trending upwards in that direction. Queue the 8th Dec 2023, the next Bureau of Labor Statistics Unemployment date release. The 1968-70 period was also burdened with high inflation with YOY CPI increasing from 2% - 6% in the 26 month period from Oct 1967 – Dec 1969. Similarly over a 25 month period from May 2020 – June 2022 CPI increased from 0% to 9.08%. The timeline of the 1969-70 inflation is quite similar, not exactly the same rate increase or timeline but similar all the same. Since June 2022 the CPI has come down to 3.7% as of Sept 2023. There are some broader similarities between the late 1960’s and early 1970’s to present day, the Vietnam war was raging and was receiving significant funding from the US government with many bills passed in support of the war effort. There was also significant poverty issues in the states as the war dragged on, and the awareness of money being spent on it was creating social discourse on the topic. Whilst the current situation of funding towards the Ukraine and Palestine conflicts is obviously very different, a similar awareness and disapproval is present as many domestic states are suffering with poverty. US President Johnson summarised the late 60’s quiet well in a 1966 speech stating that the nation could afford to spend heavily on both national security and social welfare — “both guns and butter”, as the old saying goes. Only in today’s circumstances only one of these seem to still be taking priority and it isn’t butter. I believe todays chart and post demonstrates a few things, that there is a high probability that we are already in a recession as of July 2023, however on a positive note the period we find ourselves in has many similarities to 1969-70 period, where the recession was a very bearable and mild one. With some luck, unemployment might top at 6.08% within 9 or 10 months like in 1970 and we will see a correction no greater than -34% on the S&P500 eventually. We already survived a 25% S&P500 decline from Dec 21 – Sept 2022. Minus 34% from our recent $4,580 high would put the S&P500 at approx. $3,000. Obviously there are no guarantees of any of these scenarios playing out, but at present we are certainly playing to the same tune as the 1969-70 period. PUKA
ECONOMICS:USPFMI
by PukaCharts
Also estimating GB IR going down :)Esteemed colleagues and discerning investors, As we gather to deliberate on the trajectory of our financial endeavors, let us turn our attention to the chart that unfolds before us. This graph is not merely a collection of lines and oscillations—it is the pulse of the market, the heartbeat of commerce, the very rhythm of our economic aspirations. Observe the vibrant fluctuations, the ebb and flow of value that defies the flat line of stagnation. Here we see a recent descent, a modest humbling from previous heights, which speaks to the cautious prudence that underlies our most strategic decisions. The red and green arrows, much like the hands of a compass, point to a divergence in paths, a moment of decision. The red arrow, descending sharply, may initially stir a flutter of concern, a hint of the bearish sentiment that tempers exuberance with sobriety. Yet, juxtaposed with this is the green arrow, ascending with the promise of recovery, a bullish rejoinder that whispers of resilience and potential. In this oscillation, encapsulated by the serene waves of the indicator below, we find the true test of our mettle. It is a siren call to the savvy, to those who can read between the peaks and troughs and discern the opportune moment to act. This prediction, cast upon the waters of future markets, is a vessel laden with our collective wisdom. It charts a course that acknowledges the inevitable storms and celebrates the prevailing winds that propel us forward. Let us then approach this forecast with the gravity it deserves, yet also with the optimism that has long been the hallmark of our shared ventures. For it is not just a potential decline that we prepare for, but also the ascent, the rally, the triumphant climb from the valley to the mountaintop. In closing, may this chart serve as a beacon, guiding our investments with the twin lights of caution and opportunity. May our decisions be crafted with the precision of the master artist, turning the canvas of unpredictability into a masterpiece of profit and progress. Thank you.
ECONOMICS:GBINTRShort
by UhXeL
Hope the house prices go down like this :)Powered by IA :) Ladies and Gentlemen, Today, we stand at the precipice of potential and possibility. The image before us, a chart that speaks in the language of peaks and valleys, offers us a glimpse into the future, a prediction not taken lightly. What we see is a story of growth, a narrative of ambition traced along the upward trend of this price channel. The slopes of this graph are not just lines but the embodiment of human endeavor and market forces, intertwined in a dance of numbers and dreams. As the blue line ascends within the bounds of the channel, we're reminded of the resilience and adaptability that are hallmarks of our financial markets. The channel's support and resistance lines serve as a testament to the natural ebb and flow of prices, reflecting both exuberance and caution. Yet, here we are, at the zenith of the channel, where the price hovers with anticipation. The arrow, pointing downwards, may signify an impending change, a shift that whispers of cycles and seasons in the economic sphere. It suggests a time to pause and reflect, to consider the gravity of decisions and the weight of consequences. This prediction, while rooted in analysis and expertise, also holds within it the unknown. It is a reminder that while we can chart a course through the seas of market speculation, the waters are ever-changing. As we embark on the journey ahead, let us do so with vigilance and wisdom, drawing upon the rich tapestry of data that guides us. May our strategies be sound, our risks calculated, and our spirits undeterred by the tides of uncertainty. In closing, let this price prediction serve not as a crystal ball, but as a compass — guiding us through the markets with informed perspectives and a steady hand. Thank you.
ECONOMICS:GBHPIShort
by UhXeL
Exploit the inflation response?In the United State's history of inflation, we can observe a specific pattern anytime the inflation rate spikes. First in 1935, and again in 1969. Each time this happened we saw two additional spikes each about 4.5-5 years apart. Given the recent spike in inflation in 2022, we may again see another two additional spikes in inflation. One around 2027, and another around 2032. Thanks to the recent spike, we were able to observe first hand how the market reacts to the policy response on inflation which is to increase rates. Further - it is likely that when the market reacts unfavorably to the increase in rates, it will bottom out in approximately 10 months like it did in October of 2022 meaning we will be able to have an idea of when to go stop shorting and enter long positions. TLDR: market should pump til' like 2027 all things held constant xD.
ECONOMICS:USIRYY
by The_Gains
Wilshire 5000 - approaching a decision point.The Wilshire 5000 is basically the broad market literally every publicly company in the America and also some foreign corporations are incorporated in this index We are coming to a decision area, not right now. But over the course of the next few months and years. We could see a breakout up and a continuation of the ever uptrend or a breakdown, and change in longterm trend Since these numbers are denominated in ever worthless dollars betting up with periods of panic has forever been the right call. Place your bets accordingly.
FRED:WILL5000PR
by BallaJi
Assessing The Inflation Outlook: Not Yet Out Of The WoodsInflation, naturally, remains the topic at the forefront of the minds of both market participants and policymakers alike. As price pressures continue to fade, and the majority of developed economies enter the ‘last mile’ of prices returning to target, whether the immaculate disinflation seen to date can continue, or whether the inflationary beast may yet still have a sting in its tail. First things first, it’s important to recognise the progress that has been made across DM in restoring a level of price stability. Having peaked around, or north of, 10% in the second half of 2022, the most rapid policy tightening cycle in four decades, coupled with the fading of supply-driven price pressures due to pandemic-related distortions, has seen headline price measures more than half in the subsequent 18 months. However, as is clear in the above chart, progress has somewhat stalled over the last quarter or so – longer Stateside – with headline inflation having begun to stabilise at still-elevated levels. While a substantial chunk of this is due to a recent resurgence in energy prices, allowing core (ex-food and energy) price measures to continue to decline, this lack of further disinflationary progress at the headline level is likely to be of increasing concern as time goes on. Before examining where risks to the inflation outlook lie, it’s key to acknowledge that the progress made thus far in restoring price stability has been ‘immaculate’, i.e. not coming – as many, including I, had expected – at the cost of a sharp deterioration in economic growth, or a significant loosening in global labour markets. In fact, it was notable how, at the January FOMC press conference, Chair Powell noted that stronger growth is no longer seen as a problem, and that the Fed are ‘not looking for a weaker labour market’. These comments were both in rather sharp contrast to Powell, and the FOMC’s, previous stance that a period of ‘below-trend growth’ would be needed in order to bring inflation towards target. As with the prior, pre-covid cycle, evidence would suggest that the Phillips curve remains essentially flat. Despite all that, DM economies remain far from ‘out of the woods’ on the inflation front. While, as discussed, headline price gauges have made substantial progress towards target, it is important to recognise that much of this progress has come as a result of goods disinflation, as services prices have remained relatively ‘sticky’ at elevated levels. This is true of the US. While also being true of inflation here in the UK. This points to an interesting dynamic over coming months. With economic momentum showing little sign of waning, particularly in the US, and labour markets set to remain tight, all signs point towards consumer spending remaining resilient. Such resilience should maintain upward pressure on services prices, particularly when considering that the lagged impacts of prior tightening appear less detrimental than had been feared, with effective mortgage rates in the US remaining below 4%, having risen just 50bp during the hiking cycle. At the same time, the risks of a resurgence in goods inflation remain elevated, most notably as a result of continued, and escalating, geopolitical tensions in the Middle East, causing numerous shipping firms to avoid the Red Sea, resulting in a substantially longer – and more expensive – journey around the Cape of Good Hope. Benchmark container rates from China to Europe have already quadrupled since the turn of the year, a price rise that is likely to feed along the value chain, with question marks persisting over the ability of firms to absorb these costs. January’s ISM PMI surveys provided an important reminder that price pressures remain within the economy. For the manufacturing sector, the prices paid gauge printed north of the 50 mark – implying an MoM increase – for the first time in nine months, while the comparable services gauge rose to 64.0, its highest in almost a year. The potential dynamic here is such that services inflation remains sticky, at the same time as goods inflation makes a resurgence due to a rise in shipping costs, thus exerting significant upward pressure on overall headline inflation. Of course, such a dynamic is unlikely to impact all DM economies equally, with the eurozone substantially more exposed than others; incidentally, posing a conundrum for the ECB, who are also grappling with an increasingly sick German economy, and anaemic economic growth. More broadly, for policymakers, these upside inflation risks point to the easing cycle beginning later than markets currently foresee, even after the hawkish repricing that has been seen since the start of the year. This is due to a likely desire to err on the side of caution, and maintaining restrictive policy for too long, as opposed to easing prematurely. Such a mentality seemingly stems from two sources. Firstly, continued scarring from the experience of dismissing price pressures as ‘transitory’ during 2021, and the subsequent erosion of credibility caused once forced into a rapid tightening cycle. And, secondly, a desire to avoid a ‘stop-start’ easing cycle, whereby it becomes necessary to hit pause on rate cuts for a period or, worse, re-tighten policy due to a resurgence in inflation. For markets, this all points to the hawkish repricing of rate expectations continuing, posing a downside risk to fixed income in the process, particularly in locales – such as the US – where growth is also holding up substantially better than consensus expected. That dynamic should also see upside USD risks persist, particularly against G10s where earlier cuts are likely, namely the EUR, the CHF, and the NZD.
ECONOMICS:USMPR
by Pepperstone
The Business Cycle is turning up ISM Services PMI Rep: 53.4% ✅ HIGHER THAN EXPECTED ✅ Exp: 51.7% Prev: 50.5% (revised down marginally from 50.6%) The reading for ISM Services PMI came in much higher than expected with services remaining in expansionary territory for Jan 2024 (>50 Level) Whilst ISM Manufacturing PMI came in at 49.1 on the 1st Feb (<50 level) and in contractionary territory, it has made a higher low much like Services PMI. Manufacturing has increased from 46 in July 2023 to 49.1 currently. Services continues to outperform Manufacturing. Both Services and manufacturing appear to be making a series of high lows on the chart which may suggest that this business cycle is starting to turn and curl to the upside. PUKA
ECONOMICS:USNMPMI
by PukaCharts
Quantitative Support in the US1. Liquidity and Investments: An increase in M2 typically means there is more liquidity in the economy, as consumers and businesses have more cash or cash-equivalents at their disposal. This excess liquidity can lead to increased investment in stocks, including those in the S&P 500, driving up stock prices. 2. Economic Expectations: A growing money supply can signal that central banks (like the Federal Reserve in the United States) are implementing looser monetary policies, often in response to concerns about economic growth. Lower interest rates and other forms of monetary stimulus can encourage borrowing and investing, leading investors to buy stocks in anticipation of economic recovery or growth, which can push up stock market indices like the SPX. 3. Inflation Expectations: Over the long term, increases in the money supply can lead to inflationary expectations. If investors believe that inflation will rise, they might choose to invest in assets like stocks, which are seen as a hedge against inflation, because companies can raise prices to maintain their revenues and profits in nominal terms. This shift can drive up stock prices, including those in the S&P 500. 4. Risk Appetite: An expanding money supply can also affect investor sentiment and risk appetite. With more money available and potentially lower returns from traditional safe investments (like savings accounts or bonds, which might offer lower interest rates when the money supply is growing), investors may turn to the stock market in search of higher returns, driving up equity prices. S&P can go higher, this depends on the FED Golilocks continues. The economy is not going to crash, why? It's already happened. We had a GFC. Go to university and do any relevant classes to macroeconomics. You will at some point discuss, or study the GFC. This is so we does not happen again. Of-course nothing is going to go terrible during a US election year. Now this does not stop black swan events...
ECONOMICS:USM2Long
by BackQuant
SLOOS Banking Lending Conditions- Released Monday 5th Feb 2024 Please review my prior post for a more detailed breakdown Released quarterly, the Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) is a survey of up to 80 large domestic banks and 24 branches of international banks to gain insight into credit, lending and bank practices. The Federal Reserve issues and collates the voluntary surveys. The surveys generally include 25 questions and a number of special questions about development in banking practices. They cover practices for the previous three months, but also deal with expectations for the coming quarter and year. While some queries are quantitative, most are qualitative. The surveys have come to cover increasingly timely topics, for example, providing the Fed with insight into bank forbearance policies and trends in response to the 2020 economic crisis. Let’s have a look at the culmination of the some of the more important data in chart form The Chart The blue line on the chart plots the results of the SLOOS survey – specifically, the net percentage of polled banks reporting that they’ve tightened their lending standards to commercial and industrial customers. The other lines are specified on the chart and are self explanatory . PUKA
FRED:DRTSCILM
by PukaCharts
MACRO MONDAY 32~The SLOOS~ Is Lending Increasing or decreasing?MACRO MONDAY 32 – The SLOOS Released Monday 5th Feb 2024 (for Q4 2023) Released quarterly, the Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) is a survey of up to 80 large domestic banks and 24 branches of international banks to gain insight into credit, lending standards and bank practices. The Federal Reserve issues and collates these voluntary surveys. The surveys generally include 25 questions and a number of special questions about development in banking practices. They cover practices for the previous three months, but also deal with expectations for the coming quarter and year. While some queries are quantitative, most are qualitative. The surveys have come to cover increasingly timely topics, for example, providing the Fed with insight into bank forbearance policies and trends in response to the 2020 economic crisis. Let’s have a look at the culmination of the some of the more important data from the SLOOS in chart form The Chart The blue line on the chart plots the results of the SLOOS survey – specifically, the net percentage of polled banks reporting that they’ve tightened their lending standards to commercial and industrial customers. I have combined the SLOOS Tightening Lending Standards on the chart with the Unemployment Rate. You can clearly see a pattern of the SLOOS leading the Unemployment Rate and also the broad correlation of their trends. Recessions are in grey. The SLOOS Tightening Lending Standards (blue line) ▫️ Lending standards tightened significantly prior to the onset of each of the last three recessions (See green lines and text on chart). ▫️ When lending conditions tightened by 54% or greater it coincided with the last four recessions. (Represented by the horizontal red dashed line on the chart and the red area at the top) ▫️ On two occasions the 54% level being breached would have been a pre-recession warning; prior to the 1990 recession and 2000 recession providing approx. 3 months advance warning. ▫️ When we breached the c.34% level in Jan 2008 it marked the beginning of that recession. We are currently at 33.9% (for Q3 2023) and were as high as 50% in the reading released in July (for Q2 2023). Above the 34% on the chart is the orange area, an area of increased recession risk but not guaranteed recession. ▫️ Interestingly, every recession ended close to when we exited back out below the 34% level. This makes the 34% level an incredibly useful level to watch for tomorrows release. If we break below the 34% level it would be a very good sign. We could speculate that it could be a sign of a soft landing being more probable and could suggest a soft recessionary period has already come and gone (based solely on this chart continuing on a downward trajectory under 34%). I emphasize “speculate”. U.S. Unemployment Rate (Red Line) ▫️ I have included the U.S. Unemployment Rate in red as in the last three recessions you can see that the unemployment rate took a sudden turn up, just before recession. This is a real trigger warning for recession on the chart. Whilst we have had an uptick in recent months, it has not been to the same degree as these prior warning signals. These prior stark increases were an increases of approx. 0.8% over two to three quarters. Our current increase is not even half of this (3.4% to 3.7% from Jan 2023 to present, a 0.3% increase over 1 year). If we rise up to 4.2% or higher we can start getting a little concerned. ▫️ The Unemployment Rate either based or rose above 4.3% prior to the last three recessions onset. This is another important level to watch in conjunction with the 34% and 54% levels on the SLOOS. All these levels increase or decrease the probability of recession and should infer a more or less risk reductive strategy for markets. In the above we covered the Net percentage of Banks Tightening Standards for Commercial and Industrial Loans to Large and mid-sized firms. The SLOOS provides a similar chart dataset for Tightening Standards for Small Firms, and another similar dataset for Consumer Loans and Credit Cards. I will share a chart in the comments that illustrates all three so that tomorrow we can update you with the new data released for all of them. You are now also better equipped to make your own judgement call based on the history and levels represented in the above chart, all of which is only a guide. Remember all these charts are available on TradingView and you can press play and update yourself as to where we are in terms of zones or levels breached on the charts. Thanks for coming along again PUKA
FRED:DRTSCILM
by PukaCharts