The economy has experienced neither a hard landing nor a soft landing since the Fed started tightening monetary policy in March 2022. It has experienced a few rolling recessions in industries like housing and retailing, which spurred soft patches

We still expect that the Fed’s preferred core PCED inflation measure will fall to the Fed’s 2.0% target by the end of this year (chart). It was already down to 2.8% y/y in April. May’s number will be released

The first available monthly indicator of the labor market is the “jobs plentiful” series in the Consumer Confidence Index (CCI) survey. Today, June’s reading showed that 38.1% of respondents said so (chart). That’s a relatively high reading and a slight

  The key indicator everyone’s watching this week is May’s PCED (Fri). We expect the Fed’s preferred inflation gauge will continue to show progress toward its 2.0% target. The labor market may also take center stage this week. If

The stock market has a bad breadth problem again. For a while, it seemed to be attributable to the outperformance of the Magnificent-7. Many other stocks performed well, but not as well as the Mag-7. More recently, the outperformance

Today’s batch of economic indicators was on the weak side. Indeed, the Citigroup Economic Surprise Index fell deeper into negative territory today (chart). Does this suggest that the odds of a recession are increasing? Nope: The Atlanta Fed’s GDPNow tracking model

The stock market is experiencing a meltup led by technology stock prices in general and semiconductor stock prices in particular, especially Nvidia (chart). We turned bullish on the stock market in early November 2022. On November 30, 2022, OpenAI

May’s retail sales, including food services, rose just 0.1% m/m, weaker than expected (chart). That’s in current dollars. Adjusted for inflation, they were not as weak. CPI goods fell 0.1% m/m during May. So real retail sales, less food

China’s May economic indicators were broadly negative, as evidenced by the recent weakness in Chinese stock prices as well as the price of copper, which is very sensitive to economic developments in China (chart). The bursting of China’s property

Consumer price disinflation is raising expectations for a Fed rate cut, which is fueling a meltup in stock prices. Sunday morning on CBS’s “Face the Nation,” Minneapolis Fed President Neel Kashkari said that a rate cut by year-end is

The economic week ahead will include lots of economic indicators, which on balance should show that the pace of economic activity improved during May. June’s regional business surveys for the New York and Philly Fed districts will also be

On Wednesday, the Federal Open Market Committee (FOMC) warned markets to expect no more than one interest rate cut over the rest of this year. But the bulls are charging ahead anyway on May’s lower-than-expected CPI and PPI inflation

Some economists claim that recent nonfarm payroll gains are misleadingly strong and are masking the underlying weakness in the labor market. These die-hard hard-landers point to a wonky calculation by the Bureau of Labor Statistics (BLS), i.e., the Birth/Death

On a regular basis, we like to check on the correlations between the fixed income, commodity, and foreign currency markets. Here are a few of our observations: (1) Bonds. The 10-year US Treasury bond yield has normalized, fluctuating in a

Our Blue Angels framework shows that the S&P 500 was back in record high territory last week as S&P 500 forward earnings rose to yet another record high (chart). Meanwhile, the S&P 500’s forward P/E has been relatively steady

  The economic week ahead will be dominated by the FOMC’s next meeting (Wed) and May’s CPI report. The FOMC is widely expected to keep the federal funds rate (FFR) target range between 5.25% and 5.50% on Wednesday. The

US stocks rose to record highs on Wednesday. European stocks did the same today after the European Central Bank lowered its official interest rate to 3.75%, down from a record-high 4.00%, where it has been since September 2023; today’s

The S&P 500 rose to yet another record high today, once again led by semiconductor stocks—Nvidia in particular (chart). The chipmaker just joined the $3 trillion dollar market-cap club along with Microsoft and Apple. The long line to buy the

The financial markets seem to believe that the Fed Put is back. The recent batch of weaker-than-expected economic indicators raised the number of expected 25bps cuts in the federal funds rate (FFR) from 2 to 3 over the next

A growth recession is still rolling through the goods sector. Real consumer spending on goods has been flat at a record high since early 2022. We expect that spending on services, technology, and onshoring will keep the economy growing.

May’s employment report (Fri) is likely to be the most important economic release of this week. We expect the labor market cooled a bit last month, tempering wage growth but not signaling a looming employment-led recession. Less profit margin pressure from

Friday was another wild ride on the S&P 500 rollercoaster. At first, stock prices rose after April’s PCED inflation rate, released at 8:30 a.m., matched expectations. Included in the PCED report came news that April’s real disposable personal income

Pending existing home sales dropped 7.7% in April compared to March, the slowest pace since April 2020—i.e., during the pandemic lockdown—according to the National Association of Realtors (chart). This is based on signed contracts. Would-be homebuyers are facing two problems: High

Yesterday, Minneapolis Fed President Neel Kashkari told CNBC that he wants to see “many more months of positive inflation data” before he’s ready to cut rates. He also didn’t rule out a hike. Fixed-income investors are starting to realize that this

Inflation is the number one economic concern among consumers today. It’s also moderated significantly since the summer of 2022; the prices of durable goods are even deflating a bit. The labor market remains strong, boosting consumer spending. Stocks are

Stock market pundits have been bemoaning the narrowness of the current bull market that started on October 12, 2022. It has been led by the Magnificent-7. Now the pundits are fretting that it is being led by just Nvidia,

The economic indicators released during the shortened week ahead should confirm that economic growth remains solid and that inflation is continuing to moderate. Here’s what we’re watching this week: (1) PCED. We’ll get a look at April’s PCED on

Yesterday’s FOMC minutes confirmed that Fed officials are in no rush to lower the federal funds rate (FFR) and some are considering the possibility that they might have to raise it if inflation stalls above the Fed’s 2.0% target.

The Dow Jones Industrial Average closed above 40,000 for the first time on Friday, May 17 (chart). Today, it is back down slightly below this level. We hope the title of this QT doesn’t turn out to be a

Why has the S&P 500 LargeCaps stock price index been more expensive than the indexes for the S&P 400 MidCaps and S&P 600 SmallCaps since the pandemic (chart)? From around 2005 until about 2019, the forward P/E of the