QuickTakes

The most concise analysis of the key variables driving the global economy and financial markets.

Short-form takes on current market events.

Multi-Family Housing Glut?

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

Read Now »

Recession With Chinese Characteristics

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

Read Now »

The Economic Week Ahead:  June 17–21

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

Read Now »

Low Inflation Readings Stampede the Bulls

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

Read Now »

Game Over For Birth/Death Adjustment?

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

Read Now »

Bonds, Oil, Copper, Gold & The Dollar

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

Read Now »

Market Call: Blue Angels Flying High

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

Read Now »

The Economic Week Ahead:  June 10–14 

  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

Read Now »

Charging to New Highs

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

Read Now »

Is the Fed Put Back?

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

Read Now »

Goods Economy Still On The Ropes

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.

Read Now »

The Economic Week Ahead:June 3–7

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

Read Now »

Market Call: Another Rollercoaster Ride

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

Read Now »

Housing Still In Rolling Recession

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

Read Now »

Bonds Weighing On Stocks

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

Read Now »

Sunny Economy, Gloomy Dispositions

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

Read Now »

Market Call: The Magnificent One?

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,

Read Now »

The Economic Week Ahead:May 28–31

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

Read Now »

Will Nvidia Trump The Fed?

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.

Read Now »

Dow 60,000: Here We Come

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

Read Now »

Anatomy Of The Bond Yield

We expect that the 10-year US Treasury bond yield will remain rangebound between 4.00% and 5.00% for the foreseeable future. We expect to see it more often below 4.50% (the mid-point of the range) than above it. This is

Read Now »

The Week Ahead: May 20–24

The week ahead is a light one for economic reports. The focus is mostly on the housing sector, which is showing signs of bottoming if not recovering. Meanwhile, we will continue to focus on Dr. Copper, the metal with

Read Now »