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S&P 500 Gains on Positive Earnings OutlookThe S&P 500 index opened with a 0.8% gain on Monday, with investors focusing on upcoming third-quarter earnings reports from major companies, even as US Treasury yields have risen. Last week, the index recorded a 0.45% gain despite a significant sell-off on Thursday and Friday, partly caused by concerns about Israel-Gaza hostilities, leading to lower market closes. However, strong earnings from major banks like JPMorgan, Citigroup, and Wells Fargo supported the Dow Jones index. This week, the S&P 500 is expected to rebound as several major companies, including Johnson & Johnson, Bank of America, and Goldman Sachs, report earnings. Additionally, key events include US Retail Sales for September and a significant speech by Federal Reserve Chair Jerome Powell on Thursday. Dow Jones futures are leading the way, and all three major indices are in positive territory ahead of the opening bell. Based on technical analysis, the S&P500 slightly higher on Monday, pushing towards the middle band of the Bollinger Bands. Currently, the S&P500 is trading above the middle band, suggesting the potential for a higher move to the upper band of the Bollinger Bands. The Relative Strength Index (RSI) stands at 55, indicating that the S&P500 is back to neutral bias. Resistance: 4399, 4439 Support: 4353, 4317
FRED:SP500
by Think_More
US Govt Real Debt is Down Last 3 YearsThe "real value of the US Gov't Debt" is a different way of looking at our situation through rose-colored glasses, but it is a fair analysis. If we "adjust the debt level for inflation" as measured by the CPI Index (All Urban Consumers Index) from the beginning of the series back in 1966, you will have a line that is grinding SIDEWAYS since October 2020 at a reading of $105.9 Billion. The latest number was the July reading at $105.1 Billion which is a slight decline. All of this sounds like "hocus-pocus" but it is a fact that inflation makes it easier for the Gov't to pay off its debt in the new "cheaper valued" dollars. The dollar is the same, only there are far more of them floating around in the system so each of them is worth less. If we analyze how the US debt has increased relative to other countries' debt, we could also see how we are doing. The financial market's are open for analysts to find discrepancies between the value of various currencies and over time, the market adjusts for the amount of currency being created in an economy. We can look at the TVC:DXY or US Dollar Index to see how the US economy has fared versus its trading partners. The Dollar Index is weighted for the amount of trading between the various currencies. I can follow up on that analysis in the next chart. For now, we can at least see an optimistic chart about the actual "REAL" amount of debt that the US Gov't (which is US, the taxpayers) has over the last 3 years. Covid spending and lockdown payments to keep the economy afloat certainly launched us up into the stratosphere FIRST but since 2020 that debt has been in a sideways pattern.
FRED:GFDEBTN
by timwest
6
Reduce risk in portfolios without hampering returns Asset allocation is ultimately about balancing returns with risks. While it is relatively easy to reduce risk in a portfolio, it is harder to do so without diminishing its return potential. Diversification, that is, adding uncorrelated assets to the portfolio, is one of the main tools available to investors to lower such risk, but it often comes at the cost of returns. The 60/40 portfolio, a mix between 60% equities and 40% fixed income, is the bedrock of asset allocation for many investors. Adding fixed income to equities does lower volatility and improve the Sharpe ratio, in line with Markowitz’s findings in this Nobel Prize-winning work and due to the historically negative correlation between equities and investment-grade fixed income. However, it is also true that a 60/40 portfolio has tended to deliver lower returns than a 100% equity portfolio. Does it mean that investors have to choose between higher returns with increased volatility or lower returns with decreased volatility? Cliff Asness’ thought experiment: the levered 60/40 As with any problem, the solutions usually require out-of-the-box thinking. In our case, it requires to start thinking about leverage. Cliff Asness, co-founder of AQR Capital, provided such a solution in December 1996 when serving as Goldman Sachs Asset Management’s director of quantitative research with his paper ‘Why Not 100% Equities: A Diversified Portfolio Provides More Expected Return per Unit of Risk’. In his paper, Asness argues that investors can achieve competitive returns while managing risk more effectively by diversifying their portfolios with a combination of equities and bonds and using leverage. Asness designs the ‘Levered 60/40’ portfolio which leverages a 60/40 portfolio so that the volatility of the leveraged portfolio is equal to those of equities. The applied leverage is, therefore 155%. The borrowing rate used for leveraging his 60/40 portfolio is proxied by the one-month t-bill rate. In his original paper, Asness finds that, over the period 1926 to 1993, the Levered 60/40 portfolio returns 11.1% on average per year with 20% volatility. Equities, in contrast, return only 10.3% with the same volatility. For reference, the 60/40 portfolio (unleveraged) returns 8.9% with 12.9% volatility. We extended the Asness analysis to the most recent period. We observe that over this longer period, the results still hold true. The Levered 60/40 delivers higher returns than equities with similar volatility. The Sharpe ratio of the Levered 60/40 benefits from the diversification and is improved, compared to equities, with no cost to returns themselves. Leveraging the 60/40 around the world, a successful extension In Figure 2, we extend the analyses to other regions to test the robustness of such results. While the history is not as deep, Figure 2 shows similar results. Across all the tested regions, the returns and Sharpe ratio of the Levered 60/40 portfolio exceeds those of the equities alone. At the same time, the volatility is identical, and the max drawdown is reduced. Note that we do not use a 155% leverage in all those analyses; we use the relevant leverage to match the volatility of the equities in the region. Having said that, the leverage remains very similar across regions as it oscillates between 160% for global equities and 170% for Japanese equities. The theory behind the Levered 60/40 From a theoretical point of view, the idea of focusing on the most efficient portfolio possible and leveraging it to create the most suited investment for a given investor is well anchored in financial theory. When he introduced the Modern Portfolio Theory (MPT) in 1952, Harry Markowitz had already outlined the concept through the Capital Allocation Line (Markowitz, March 1952). The efficient frontier for a mix of 2 assets: US equities and US high investment-grade bonds. Note that each portfolio on the efficient frontier is the most efficient for a given level of volatility, assuming no leverage. All portfolios on the efficient frontier are not equal and have, in fact, different Sharpe ratios. Along this efficient frontier, there is a portfolio with the highest Sharpe ratio of all, called the ‘Tangential Portfolio’. This most efficient of all the efficient portfolios happens to be found where the Capital Allocation Line touches the efficient frontier. The Capital Allocation Line is the line that is tangential to the efficient frontier and crosses the Y axis (the 0% volatility axis) at a return level equal to the risk-free rate. When it comes to building the most efficient portfolio for a given level of volatility, investors have two choices. Without leverage, they can pick the portfolio with the highest return for that volatility level on the efficient frontier. If investors look for strategies with a volatility level equal to equities, equities are the most efficient portfolio. Considering potential leverage, the answer is quite different. With leverage, an investor can pick the portfolio with the relevant volatility level (in this case, the equity volatility) on the Capital Allocation Line. Portfolios on this line happen to have a Sharpe ratio equal to the Sharpe ratio of the Tangential portfolio (that is, the best Sharpe ratio of all the portfolio combinations without leverage) but with any level of volatility that may be required. We called the Leveraged Tangency Portfolio the portfolio on the Capital Allocation Line with the same volatility as the equity portfolio. This portfolio is a ‘more efficient portfolio’. The return is improved by almost 2% for the same volatility, leading the Sharpe ratio to jump from 0.27 to 0.45. Key Takeaways “Diversification is the only free lunch in Finance”, whether a real or fake H. Markowitz’s quote, epitomises the philosophy that underpins the 60/40 portfolio. It is also one of the main lessons from Markowitz's Nobel prize-winning work. Having said that, the second lesson has not been heeded as well: leveraging a good portfolio can make an even better portfolio. Overall, by leveraging a traditional 60/40 portfolio, an idea that, at WisdomTree, we call ‘Efficient Core’, investors could potentially receive a similar level of volatility present in a portfolio 100% allocated to equities but with the better Sharpe ratio of a 60/40 portfolio. Possible examples of where such Efficient Core portfolios may be used widely in multi-asset portfolios include: An equity replacement A core equity solution designed to replace existing core equity exposures. By offering return enhancement, improved risk management and diversification potential compared to a 100% equity portfolio, Efficient Core can also be used to complement existing equity exposures. A capital efficiency tool By delivering equity and bond exposure in a capital-efficient manner, Efficient Core can help free up space in the portfolio for alternatives and diversifiers. In line with the illustrations above, allocating 10% of a portfolio to this idea, investors would aim to get 9% exposure to US equities and 6% exposure to US Treasuries. This could allow investors to divest 6% from existing fixed income exposures and consider alternative assets (such as broad commodities, gold, carbon or other assets). In this scenario it could potentially be achieved without losing the diversifying benefits of their fixed income exposure. This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.
FRED:GDPC1
by aneekaguptaWTE
October is decisive for DJI!The index is trapped in an accumulation triangle. In the short term, I am bearish, believing that August and September will maintain the seasonality of poor returns. It seems quite clear to me that after being rejected at the top of the triangle, profits are being distributed. Bulls are waiting for a touch at the base of the structure to position themselves again. Seasonality and simple technical evidence appear to be combined here. Based on historical statistics of cycles and returns, there is also a good probability for the index to reach new highs in the next 12 months. For these and other reasons, I have maintained this strategy since June 2022.
FRED:DJIALong
by MrGekkoWallSt
2
🟩 Margin Debt with brokers points upWhen we look at the first chart the Margin Debt with brokers (aka how much the brokers are deploying margin) - we see a positive relationship with the times when brokers are on margin (aka buying a lot) and the market going up. When we analyse the Rate of Change of this stat for the last 15months we can see that currently we are getting to a state of bearishness close to the 2008 and 2002 periods. This of course is a contrarian indicator and could point to a move higher. This is a long term assessment, but it is a good point to include in your analysis. However remember we NEVER have confirmed of the NET NEW HIGHS - hence this market has still not confirmed Bull Status, at best we have Bull-transition. So be very cautious of the market.
FRED:BOGZ1FL663067003QLong
by TintinTrading
⚖️ 📊 Why Is The Fed Rate @ 5.33% ? - Here Is The Answer🛡️ Now in the last videos, i said i was not going to teach you -- Risk management but I have changed my mind -- in this video, i break down Risk management using US Economy as an example take notes -- Watch this video now before you trade -- Disclaimer: This is not financial advice do your own research before you trade -- Do not buy or sell anything i recommend to you -- 🚫📊 **Trading Disclaimer** 🚫📊 The information provided is for educational purposes -- only and should not be considered as financial advice. -- Trading involves risk, and past performance does not guarantee future results. -- Always conduct thorough research and consider consulting a qualified financial advisor -- before making any investment decisions. Remember to set appropriate stop-loss levels to manage risk. -- Rocket boost this content to learn more
FRED:FEDFUNDSEducation
by lubosi
Macro Monday 14~Unemployment Rate Rise Macro Monday 14 US Employment Rate Pre-Recession Indications The Unemployment Rate tells us how many people in the United States are currently without a job and actively looking for one. The U.S. Bureau of Labor Statistics calculates and reports the unemployment rate. In basic terms it consists of the following; Survey: The Bureau of Labor Statistics conducts a regular survey of a sample of households across the country. They ask people whether they are working or actively trying to find work. Calculation: Based on the survey results, the Bureau calculates the percentage of people who are unemployed (those without jobs but actively seeking employment) compared to the total number of people in the labor force (those who are either employed or actively looking for work). Reporting: This percentage is then reported as the unemployment rate. For example, if 5 out of every 100 people in the labor force are unemployed, the unemployment rate would be 5%. At present the Unemployment rate is 3.8%. In simple terms, the unemployment rate is a way to gauge how many people are struggling to find jobs in the United States. In this respect it is an important economic indicator that helps us and policy makers understand the health of the job market. The Chart In today’s chart I will be analysing the history of the Unemployment Rate and how it has behaved both before and during recessions. The aim of the analysis is to help us understand the distinct pre-recession patterns and levels that occur prior to recession so that we can prepare ourselves should these levels be breached or these patterns play out again. These historic levels will be placed on the chart for you to monitor from today forward. Chart Outline: 1. Recessions are the red zones (also numbered & labelled 1 – 12 and on the chart itself) 2. Increases in the Unemployment Rate prior to recession are in blue. - These blue zones start at the lowest level the Unemployment Rate established prior to the recession periods in red. - Basis points (bps) have been used to show the change in the value within the blue zones (pre-recession zones) e.g. recession No. 2 The Great Financial Crisis had a pre-recession Unemployment Rate increase from 4.39% - 5.00% which is a 0.61% increase in the unemployment rate or a 61 bps increase. - Peaks: I have also included peak bps increases within these pre-recession periods (within the blue zones). These are times that the Unemployment Rate peaked higher but reduced thereafter but a recession still followed. Chart Findings: 1. In 10 out of 12 of the recessions outlined the Unemployment Rate increased in advance of the on-coming recession (in the blue zones) demonstrating that initial early increases to the Unemployment Rate can act as an early recession warning signal: - An average increase of 33.5 bps over an average timeframe of 7.3 months is observed pre-recession. - The maximum increase in the pre-recession blue zones was 71bps over 8 months. This max increase was observed prior to 1980 Volcker/Energy Recession no. 6 on the chart (this increase was from 5.59% to 6.30% in the Unemployment Rate itself – a 71bps increase). This recession was induced by Fed Chair Paul Volcker’s sudden increase to interest rates much like those that have been imposed by Jerome Powell over recent months (Volcker was appointed in Aug 1979 and got to work quick). - The max timeframe for a rising Unemployment Rate prior to recession was 16 months. This was prior to the The Gulf War Recession, no. 4 on the chart (which was considered a short 8 month softer recession). This max 16 month pre-recession timeframe has been marked on the chart to May 2024 in correspondence with today’s pre-recession blue zone timeline – so we know where a max timeline would put us (not a prediction). - 2 out of 12 times the Unemployment Rate did not increase prior to recession however it did not decrease either, it based at 0 bps or no change (No.1 COVID-19 Crash and No. 5 The Iran/Energy Crisis Recession). Whilst the Unemployment Rate did not increase, they did temporarily peak higher within the blue zones by 10 bps (No. 1) and 31 bps (No.5) demonstrating the importance of peaks and bases formed prior to an Unemployment rate ramp up and recession. I found the peak increases interesting to include because they illustrate that the Unemployment Rate can oscillate peaking higher temporarily only to form a higher low or return to its starting point, but a peak, if significant enough could be a telling indicator. The most notable peaks are the following; 62 bps (no. 12), 61 bps (no. 9), 60 bps (no. 10), 30 bps (No. 8), 31bps (No. 5) and only 10 bps (No. 2) for the COVID Crash. All of these peaks reduced thereafter within their pre-recession blue zones but a recession still ensued. A sudden increase in the unemployment rate should be taken seriously. I will include a subsequent data table chart that outlines these peaks and all other data utilized for Chart 1’s illustration and findings. We are currently in dangerous territory as we have passed the average timeframe of 7.3 months of increases to the Unemployment Rate and the Unemployment Rate increased by 40 bps over that period which is higher than the historical average of 33.5bps. We have surpassed both averages. The max historical pre-recession increase is 71 bps (No. 6) so this is a level to watch going forward. This translates to a level of 4.11% in the Unemployment Rate (marked on the chart). Similar to today’s Unemployment Rate level, there are two very similar instances in the past where the Unemployment Rate increased from c.3.4% to c.3.8% prior to recession (See RED ARROWS on chart). These both took 7 – 10 months to play out with a 10 – 42 bps increase to be established before recession hit. This is very similar to today’s levels which are at 7 months and 40bps of an increase with the 8th month being released this Friday 6th October 2023 which should be very revealing. We are now well armed with an historical chart as a reference point for any upcoming Unemployment Rate figures released in coming months. We know we have surpassed the averages in terms of timeframe (7 months) and the 40 bps increase is above the avg. 33.5 bps. We can refer back to this chart using Trading View, press play and see if we are breaching the max pre-recession level of 4.11% (the 71bps move) or other extreme pre-recession levels such as the dot.com and GFC Unemployment Rates (both marked on the chart). And if you don’t frequent the chart on trading view I will update you here regardless. Lets see what Friday brings…. PUKA
FRED:UNRATE
by PukaCharts
1
🏘 Housing Bubble v 2.0: What Does It Mean for US Stock MarketMuch to the chagrin of would-be homebuyers, property prices just keep rising. It seems nothing - not even the highest mortgage rates in nearly 23 years — can stop the continued climb of home prices. Prices increased once again in July, according to the latest S&P CoreLogic Case-Shiller home price index , with 19 out of 20 markets measured showing month-over-month gains. In another reflection of ongoing increases, the National Association of Realtors (NAR) says more than half of U.S. metro areas registered home price gains in the second quarter of 2023. So much for the idea that a "housing recession" would reverse some of the outsized price gains in homes. The U.S. housing market had finally started slowing in late 2022, and home prices seemed poised for a correction. But a strange thing happened on the way to the housing crash: Home values started rising again. NAR reports that median sale prices of existing homes are near record highs. Home prices in August 2023 rose 3.9 percent year-0ver-year to reach $407,100 — near the all-time-high of $413,800, and only the fifth time any monthly median has eclipsed the $400,000 mark since NAR began keeping records. The housing recession is essentially over, or has just began!? Home values have held steady even as mortgage rates have soared past 7 percent, reaching their highest level in more than 20 years in August. The culprit is a lack of housing supply. Inventories remain frustratingly tight, with NAR’s August data showing only a 3.3-month supply. 30-Year Fixed Mortgage Interest Rates Turn Higher, as 200-Month SMA Key Resistance was broken earlier in 2022. Average Annual Mortgage Interest. 30 000 U.S. Dollars Rubicon is at the hands. After the Federal Reserve’s meeting in June, Fed Chairman Jerome Powell told reporters he was keeping a close eye on the housing market. "Housing is very interest-sensitive, and it’s one of the first places that’s either helped by low rates or held back by higher rates," - Powell said in the press conference. "We’re watching that situation carefully." Housing economists and analysts agree, regardless, that any market correction is likely to be a modest one. No one expects price drops on the scale of the declines experienced during the Great Recession. Is the housing and stock markets are going to crash? The last time the U.S. housing market looked so frothy was back in 2000s. Back then, home values crashed with disastrous consequences. When the real estate bubble burst, the global economy plunged into the deepest downturn since the Great Depression. Now that the housing boom is threatened by skyrocketing mortgage rates and a potential recession so buyers and homeowners are asking a familiar question: Is the housing market about to crash? 5 reasons ("cast in bronze") there will be no housing market crash 1. Inventories are still very low. 2. Builders didn’t build quickly enough to meet demand. 3. Demographic trends are creating new buyers. 4. Lending standards remain strict and impose tough standards on borrowers. 5. Foreclosure activity is muted: In the years after the housing crash, millions of foreclosures flooded the housing market, depressing prices, and it’s nothing like it was two decades ago. Funny, but all of that adds up to the one only consensus: Yes, home prices are still pushing the bounds of affordability. But "Ooh not", this boom shouldn’t end in bust. 😏 History does not repeat itself. But often rhymes. Technical graph for ECONOMICS:USSFHP - U.S. Single Family Home Prices illustrates there has been a while, without new all time highs in Top Four U.S. Stock market indices while Housing Bubble was exist in 2000s. So lets see, will be the same in 2020s or not, while 2023 is a second straight year without new all time peaks in S&P500 SP:SPX , in Nasdaq-100 NASDAQ:NDX , in Dow Jones Index AMEX:DJIA as well as in Russell 2000 Index TVC:RUT
ECONOMICS:USSFHP
by Pandorra
Qualitative Fundamental Analysis of US Economy Oct.2023The most important factor for the economy is the behaviour of GDP. Several economic indicators are tracked to determine the overall economic situation and GDP growth. A technical recession is defined as 2 consecutive quarters of negative real GDP. If GDP grows less than 3% on average for the year, the economy is not growing fast enough and this will lead to unemployment. At its core, the Federal Reserve has dual mandate policy: price stability(2% inflation for a year) and maximum employment (max Unemployment rate 4%) . CPI Inflation projection: inflation is forecast at 4.7% in 2023 and is expected to further slow down to 3.0% in 2024. Actual CPI : 3.7 % PCE Inflation projection: inflation to be 3.3 percent in 2023, 2.6 percent in 2024, and 2.2 percent in 2025, and the Federal Reserve expects a similar outlook of 3.3 percent, 2.5 Actual PCE : 3.5% Unemployment rate projection: The unemployment rate reaches 4.1 percent by the end of 2023 and 4.7 percent by the end of 2024 before falling slightly, to 4.5 percent, in 2025. Actual: 3,8% GDP Growth projection: Real GDP increases by 1.5 percent in 2024 and by 2.4 percent in 2025. Actual: 2,4% Interest rates projection:The Fed now expects its benchmark federal funds rate to close out 2024 at an effective rate of 5.1%, which is higher than its June forecast of 4.6% Interest rates: 5.5% MONEY MARKET Yields From the chart above we can see when the recession is coming. The 10Y-2Y has already fallen below 0 and we should prepare for a recession when it comes above 0. The yield curve (all yields) is slightly inverted, but only because of the 20-year yields. The overall curve is normal, which means that investors are not worried about the future, at least for now and they invest more in long-term bonds. According to the FED, we should expect a mild recession at the end of this year. The SP500 seems to be consolidating for the next few months. Corporate Bonds and Credit Spread Spreads are relatively stable. They do not point to a recession. Money Supply M2 The money supply is also stable, which means that the printer is not running. This is a good sign considering the banking crisis. interest rates The last time IR was so high was during the last recession in 2008. History could repeat itself. At the last FOMC meeting, the FED paused rates but said they would remain high. This could be exactly what happened in 2007. FED paused after aggressive hike and recession came. SERVEYS ISM PMI, NMI The historical correlation between real GDP growth and the ISM PMI/NMI is 85%. PMI/NMI are leading indicators and they will predict how GDP will move. It is a short to long term prediction (within 12 months). The reading continued to point to another albeit smaller deterioration in the manufacturing performance, as contractions in output and new orders softened. Meanwhile, sufficient stocks of inputs and finished items, alongside still subdued demand, led firms to reduce their purchasing activity sharply again and firms continued to work through inventories in lieu of expanding their input buying, which contributed to a further improvement in supplier performance. Consumer Sentiment Index(UMCSI) The level of consumer confidence in stability and future prospects can be used to understand the overall trend in the economy. Still, consumers are unsure about the trajectory of the economy given multiple sources of uncertainty, for example over the possible shutdown of the federal government and labor disputes in the auto industry. From a technical perspective the chart looks very suspicious. Like bullback before the new swing. Will see. Building Permits The jump in permits suggested that new construction continues to thrive, driven by a shortage of homes available in the market, despite the dampening effect of rising mortgage rates on housing demand. NFIB Business optimism index Twenty-three percent of small business owners reported that inflation was their single most important business problem, up two points from last month. Also, the number of small business owners expecting better business conditions over the next six months declined (seven points from July to a net negative 37%). “With small business owners’ views about future sales growth and business conditions discouraging, owners want to hire and make money now from strong consumer spending,” said NFIB Chief Economist Bill Dunkelberg. “Inflation and the worker shortage continue to be the biggest obstacles for Main Street. Overall the business is not optimistic for the near future. Leading Economic Index The Leading Economic Index provides an early indication of significant turning points in the business cycle and where the economy is heading in the near term. The US LEI continues to signal a recession. Combined with the yield curves, it looks like a recession could be coming very soon. INFLATION Total Inflation = 30% CPI (demand) + 40% PCE(supply) + 30% other factors) CPI The FED's target may be 2%, but the reality is that inflation is between 2-4%. Inflation has risen again in recent months and current oil prices suggest that it will remain high. Investors are worried about future prices. The same thing happened in the 80s. The FED does not want the same to happen today, which is why they have been so hawkish recently. Core CPI This projection is very scary, but if the economy goes crazy, it can happen, just like in the 80s. I am not predicting that core CPI will rise that much, just pointing out the similarity. PCE Inflation The US personal consumption expenditure price index rose 3.5% year-on-year in August 2023, the most in four months, after an upwardly revised 3.4% rise in July and in line with market expectations. PPI / Core PPI The producer price inflation in the United States accelerated to 1.6% year-on-year in August 2023. This is the second consecutive month. GOVERNMENT Balance sheet The balance sheet is falling, which is deflationary. On the one hand, this is good and gives us an indication that inflation should be contained, but on the other hand, it is a sign of recession. [b ]Cyclical Commodities Trade weighted US Dollar Index Rising trade indices are actually deflationary for the economy. Commodities They stable prices do not give us a clear picture of the near future. Stocks The benchmark indices are falling. The failed to make new HH, suggesting that the will consolidate or fall. Sometimes they are seen as a leading indicator of future GDP and recession. Summery The current pause in interest rates, with the hawkish narrative that rates will stay high for a long time, could be the second phase of the business cycle. The next one is recession. Yield curves have also suggested that the recession is not as far away as we think. The surveys are relatively stable, but the overall picture is not so optimistic. Inflation is on the rise again, which may lead the FED to be more aggressive. They have said many times that they would rather have a recession than a price explosion. They have even warned about a mild recession, how mild we will see. The unemployment rate is still below 4%, but in recent months it has risen from 3.5% to 3.8%. Rising unemployment is a sign of recession. Stock indices have risen in recent months, but future expectations of a new recession, combined with high interest rates and business optimism, are bearish factors for the stock market.
FRED:T10Y2Y
by SerpentForexClub
2
Higher US Interest & Lower Dollar, Why?higher US rates, the US dollar should be trading higher. But inversely, the US dollar became weaker since September last year. In today’s tutorial, we will discuss what is the cause of a weaker US dollar and the future of the US dollar; despite US interest rates could go higher than expected. Bond trading: • US Treasury Bond futures Minimum fluctuation: 1/32 of one point (0.03125) = $31.25 Code: ZB • 10-Year T-Note Minimum fluctuation: 1/2 of 1/32 of one point (0.015625) = $15.625 Code: ZN • 5-Year T-Note Minimum fluctuation: 1/4 of 1/32 of one point (0.0078125) = $7.8125 Code ZF • 2-Year T-Note Minimum fluctuation: 1/8 of 1/32 of one point (0.00390625) = $7.8125 Code ZT 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:USINTRShort
by konhow
2