Market Morsels: Mortgage Spread
The spread between the 10 year and the 30 year mortgage is starting to normalize. If this continues and mortgage rates keep coming down, housing could turn soon and start adding to GDP:
Market Morsels: Crude Oil
Crude oil futures have returned to backwardation after a couple of months of contango. Near-term demand improved relative to supply. https://www.cmegroup.com/markets/energy/crude-oil/light-sweet-crude.quotes.html#venue=globex The crude oil chart looks like it is setting up for a rally:
Weekly Market Pulse: Is The Recession Finally Here?
The financial commentariat first started to worry about recession in April of 2022 when the spread between the 10-year Treasury rate and the 2-year Treasury rate turned negative - the yield curve inverted. It subsequently righted itself to positive territory until July of 2022 and has stayed inverted ever since. Since an inverted yield curve has preceded almost every recession [...]
Perspective On A New Year
I'm back! I took most of the month of December off, as I do every year, to do some thinking. Per the title of this essay, the purpose of these year-end musings is to gain some perspective. In the day-to-day, week-to-week, movements of the markets it is easy to forget that we are investing with a timeline measured in years, [...]
Macro: ISM Services
The index is down from 52.7% in November to 50.6% in December. While current activity registered a jump to 56.6% from 55.1%, the composite is being held down by employment, inventories, trade and new orders. Employment -- 50.7 in Nov to 43.3 in Dec, down 7.4% Inventories -- 55.4 in Nov to 49.6 in Dec, down 5.8% Imports -- 53.7 [...]
Macro: Employment
The employment numbers came in progressively better throughout the week. Friday, the US Bureau of Labor Statistics reported that the US added 216,000 jobs in December. The following industries reported the largest gains: Leisure and Hospitality (Hotels, Restaurants, Gambling, Live Entertainment) -- 40,000 Health Care -- 38,000 Local Governments -- 37,000 Professional and Business Services (Accounting, Architecture, Computers, Consulting) -- [...]
Macro: S&P Global US Services PMI — strengthens
Personal consumption of services is 45% of US GDP. Employment is strong and the service sector continues to be strong. S&P Global PMI report came in at an expansionary 51.4. Output rose for the 3rd straight month and at the sharpest rate since July. New orders rose at the fastest rate since June. This translated into employment clocking in at [...]
Macro: Employment — ADP and Initial Claims — Strong Employment continues
The economic backdrop today: Employment is strong Employment drives personal consumption Initial Unemployment claims dropped by 18,000 to 202,000. This is the 4th lowest number of initial unemployment claims of the year. Continuing claims dropped as well and the slope of the 4-week moving average is now negative indicating an incrementally easier environment to find a new job. Today's ADP [...]
Macro: Job Openings and Labor Turnover
The labor market is softening, but still strong. Disclaimer: This information is presented for informational purposes only and does not constitute an offer to sell, or the solicitation of an offer to buy any investment products. None of the information herein constitutes an investment recommendation, investment advice or an investment outlook. The opinions and conclusions contained in this report [...]
Macro: ISM Mfg PMI — 47.4
Manufacturing regionally, nationally and globally continues to be in contraction. In line with that theme, ISM reported 47.4% this morning, the 14th straight month of contraction. Manufacturing is contracting at slower rates and export orders continue to show improvement. To date this has played out more like a slowly recovering covid hangover. The fear is weak demand signaling recession, but [...]
Stay In Touch