ppi vs cpiCRUDE OIL is a play on PRODUCER prices out performing CONSUMER prices. #crudeoil #ppi #cpi #gold #silver #stockmarkets notes. bull era for US Stocks bull era for gold silver oil PPI vs CPI 8 year rate of change correction above inclining 8 year moving averageLongby Badcharts2
Recession Timeframe Horizon Macro Monday (2) Potential Recession Time Horizon Below you will find a breakdown of how many months pass before a confirmed Economic Recession (shaded grey areas) after the yield curves first definitive turn back up towards the 0% level: 1) 13 Months (Dec 1978 – Jan 1980) 2) 9 Months (Nov 1980 – July 1981) 3) 16 Months (Mar 1989 – Jul 1990) 4) 12 Months (Mar 2000 – Mar 2001) 5) 22 Months (Feb 2006 – Dec 2007) 6) 6 Months (Aug 2019 – Mar 2020) 7) 4 Months so far (Mar 2023 - ????) Average Time frame: 13 months (reasonable time horizon would be 6 – 18 months). I consider the first definitive turn up towards the 0% level as no. 7 on the chart (March 2023). Since this date we have rolled over below the -1% level (see additional chart in comments). March 2023 appears similar to the bounce in Dec 1978 (No. 1 in the chart), it also rolled over to the lower sub -1% level. If we assumed a similar 13 month timeframe to recession commencement as in Dec 1978 of 13 months, which also aligns with our 13 month average above, we would be looking at April 2024 for a recession to commence. Interestingly 1978 - 1980 was a similar peak inflationary period known as the Great Inflation, a defining macroeconomic period of high inflation. You might be wondering, has a recession ever occurred in the month of April before? I personally thought this was a strange month but it has occurred in the past. In April 1960 a recession commenced and lasted 10 months to February 1961. The 1960 recession was mainly a result of an over-tight monetary policy whereby the Federal Reserve raised interest rates from 1.75% in mid-1958 to 4% by the end of 1959 and maintained them at that level until June 1960. The Federal Reserves motive for raising interest rates and maintaining them was fear of high inflation (as in early 1951 inflation soared to +9.5%). Is it just me or is this all starting to sound a little too familiar? If we wanted to cater for all time scenarios in the chart and noted above (no. 1 - 6) we could argue that the start of a recession is possible at the earliest within 6 months (Sept 2023) and at the latest 22 months (Jan 2025). Also, the month of April 2024 has some eerie similarities to two prior recessions, the 1978 and 1960 Recessions. Lucky 13 Since World War 2 bear markets have on average taken about 13 months to reach their bottom and a further 26 months to recover their losses. Our average time before a recession would start is 13 months. It’s worth remembering that it could take an additional 13 months before a bottom is established and then 2 years or 26 months (2 x 13) of price action below the pre-recession price highs. Over 3 years is a long time to wait to recover losses. It would be pertinent to start deleveraging or increasing your hedge from the 6 month mark (Sept 2023 in this case) as subsequently the likelihood of a 3 year period below the Sept 2023 price levels increase as each month passes. For reference the S&P 500 index has fallen an average of 33% during bear markets over the avg. timeframe of 13 months to the bottom. I actually find it very hard to accept that a recession is possible in the near term (within 6 - 12 months) and I would in fact argue against it, however I cannot explain away the data in the chart which speaks for itself and warrants at least some consideration & caution. Nothing is a guarantee and maybe this time it will be different, especially factoring in the amount of unprecedented liquidity added to the market in recent years, sticky inflation and financial supports provided to systemically important banks. All the chart really indicates is a probable window for a recession to start some time between Sept 2023 – Jan 2025 and no guarantees. The rule of 13 is worth remembering, simply from a timing perspective (before and during a recession) as it may help your timing. Based on two similar periods in history, the 1978 and 1960 recessions suggest the month of April 2024 may be a key date. Again, no guarantees. It is also worth noting that for the last six recessions, on average, the announcement of when a recession started was up to 8 months after the fact…meaning we will have no direct indication when a recession starts, however the un-inversion of the yield curve (back above the 0% level) and a rise in unemployment will be the early tells, so these are worth paying attention too. We will keep you posted on any sudden changes in these metrics. I hope the chart is helpful, provides one perspective of which there are many, and can help time and frame the situation we currently find ourselves in. NO GAURANTEES, just probable timeframes that may be worth paying attention too. PUKA List of Recessions: 1. COVID-19 Recession (February - April 2020) 2. The Great Recession of 2008 (December 2007 - June 2009) 3. The September 11 Recession (March - November 2001) 4. The Gulf War Recession (July 1990 - March 1991) 5. The Iran/Energy Crisis Recession (July 1981 - November 1982) 6. The Energy Crisis Recession (January - July 1980) 7. The Nixon Recession (December 1969 - November 1970) 8. The “Rolling Adjustment” Recession (April 1960 - February 1961) 9. The Eisenhower Recession (August 1957 - April 1958) 10. The Post-Korean War Recession (July 1953 - May 1954) by PukaCharts442
One Has To Decide, Housing or CashStrange economy management give everyone excellent example of stupidness. Right now landlord has to decide whether sell or lose money everyday... %40 is good interest rate but it won't be enough for TurkeyShortby kargaa112
UNRATE Update | December 2021 - PresentThe US unemployment rate can double from here and still be within the long-term range and still below the extremes that have occurred during more recent recessions. Also worth point out that the only time we have been below this level of unemployment (higher employment) was during the Korean war in the early 1950s. Sure, we could see the rate of employment increase - that can happen. But it's unlikely, based on 75 years of data that spans everything from Post-Keynesianism, to Real Business Cycle (RBC), to Monetarism, to MMT. As such, it is safe to conclude that a lower UE rate, from "here", is unlikely. So unemployment has probably bottomed, stocks are yet to recover their December 2021 highs (19 months) and the interest rate on the US10Y is up roughly 200% (having gone as high as + 215%) over the same 19-month period and currently offering a yield of 4.049%; the US10Y maintains it's lag of the US02Y, which is currently offering a yield of 4.95%. In other words, bank lending is more constrained... Wow, even the banks are telling us there is significant risk in the market. Meanwhile a lot of folks are running around telling you how great fake-money crypto supposedly is. Maybe the banks are right about risk.... Oh! one more thing: the VIX has also reached a bottom of sorts. Shortby ChiefMacro1
Build Back BetterBuild Back Better is a disaster for the economy. Banks are failing and Inflation is killing middle class America. The wealthy are above inflation rates in a top down economy where they receive their money before the full effect of inflation kicks in at the lower levels. "Trickle Down Economics". Non Farm Payrolls are down again marking a decisive trend. Fewer jobs being created in the workforce along with flooding Illegal migrants along the border and you have a catastrophe that is just waiting to happen. A third world country in the making.Educationby cldx1110
US Purchasing Power heading into the abyss.US Purchasing Power heading into the abyss. Protect with #gold and #silver. Silver Tracks Purchasing Power NEGATIVE 7 YEAR RATE OF CHANGE BELOW THIS LINE silver appreciates heading into the abyss break of upwards momentumShortby Badcharts112
T10Y3MIf this chart doesn't show a recession i dont know what else does! Don't like to spread dooms but we must pay attention to this chart in order to manage our trades properly. by lekafi1
CPI YoY : All vs CoreComparing CPI YoY all vs core. All: ECONOMICS:USIRYY Core: ECONOMICS:USCIR Core is not coming down as fast as all.by dharmatech5
Cutting interest rates will mean hard landing is unavoidable.Look how strong the correlation is between 2y/10y spread and interest rates in the last two decades. Once it starts peaking watch it roll over slowly, a pause, usually indicates the last stages.by EdwinPus5
US Mortgage Rate v Fed Funds RateSome slight research into the relation between US 30Y Mortgage and Fed Funds rateby Kairopoly3
Housing Index v US 30Y MortgageJust some research into housing price index and impact of 30Y Mortgage changesby Kairopoly1
iran inflation ratewe expect this index to calm down and touch the floor of the compression otherwise the index will surpass the previous tops & in that case we can see more than 10 times the current valueby loginmusa3
Corporate Profit UpdateFor the past two decades, corporate profits have grown at a faster rate due to excessive government deficits, Zero Interest Rate Policy (ZIRP), and Quantitative Easing ( QE ). However, this prolonged growth has not been without its hiccups. There were two major corrections, one in 2008 to 2009 which resulted in a 63% drop in corporate profits and a severe recession, and the other from 2014 to 2016 where the S&P 500 remained relatively stagnant with a market decline of almost 20%. We are on the brink of another correction, and markets have already started to plummet even before corporate profits start to show signs of weakness. This is a cause for significant concern. Despite the abundance of bottom fishing being carried out by supposed "experts" on social media. With all that being said, I must acknowledge that corporate profits have remained more resilient than I anticipated. I attribute this to effective overall management. However, relying solely on cost-cutting measures is not a sustainable approach to prosperity.Shortby RealMacroUpdated 18
Recession Indicator 29/6/23This is a recession indicator, looking at the ten year % minus the two year %by SonOfWorf554
Real Estate Index Coming to Key AreaWe have seen this movie before in REITS. We have yet another fully formed valid Bearish flag that bulls do not want to see a break from as we come into a key area.Shortby RealMacro4
Virulent inflation raises pressure on the Bank of EnglandThe inflation battle is far from over in the UK. In fact, the nature of inflation is taking a new form as the root cause moves away from external to more domestically driven shocks. While the headline rate remained unchanged at 8.7%yoy in May, core inflation accelerated to 7.1% in May from 6.8% in April, marking the highest rate since March of 19922. In response the Bank of England (BOE) raised interest rates by a bumper 50Bps to a 15-year high. While the Federal Reserve (Fed) and the European Central Bank (ECB) have made progress on bringing down inflation, the BOE still has some ways to go. Current market pricing assumes the terminal policy rate will go to 6% by year end3. UK inflation proving to be virulent The UK has the most severe entrenched inflation problem across developed markets. The domestically driven increase of services prices advanced from 6.9% to 7.4%yoy in May4. As services are labour intensive, they are being impacted by strong wage gains. Employment growth has been stronger than projected underscoring continued robust demand for labour. This high demand caused the rise in weekly average earnings (ex-bonus) to 7.5% in April5, well above the BOE’s forecast. Brexit has been partly responsible for the rise in wages. Brexit reduced the mobility of European workers. The resulting lack of non-qualified workers has not yet been reabsorbed. The situation was clearly exacerbated during the Covid pandemic that left a large part of the workforce sick. The shortage of workers in the UK continues to weigh on the supply side and has been the key reason inflation has remained stubbornly high. The resilient gains in employment (up 1.2% in April 20236) have allowed UK households to continue spending on services. Thereby contributing to higher services inflation, prices for recreational and cultural goods and services rose by 6.8%yoy in May 20237. At the same time, due to the shift away from floating rate mortgages towards fixed rate products over the last decade, the pass through of higher rates is taking longer to feed through the economy, thereby enabling the consumer to appear more resilient. However, headwinds are appearing from higher mortgage rates, with at least 800,000 fixed mortgages due to move on to significantly higher rates in H2 20238. Rents have also been rising, at an annualised pace of 5.6% in May compared to 3.2% in 20229. This is likely to place further pressure on real disposable incomes and simultaneously fuel core inflation higher. The Institute for Fiscal Studies estimates that higher interest rates will cause the average mortgage holder to suffer an 8.3% fall in disposable income compared to a scenario where rates remained at March 2022 levels. For 1.4 million of those borrowers, disposable income will fall by more than 20%10. BOE guided dovish The BOE’s guidance implied that no further rate hikes should be needed bar evidence of more persistent inflationary pressures however the market ignored this. Money markets priced a terminal rate of 6.25% by February 202411. The BoE did not rule out further rate increases should the inflation data continue to be unfavourable. However, they did downplay the unexpected surge in core inflation in May owing to special contributing factors such as the sharp rise in vehicle excise duty and the erratic contribution of airfares and holiday packages. The BOE also highlighted that forward looking indicators are pointing to material falls in future wage inflation which could then lower the pressure on services prices. We share that view, as producer price inflation which tends to serve as a leading indicator for consumer price inflation, eased more than expected in May. The June composite Purchasing Managers Indices (PMI) dropped for a second month in June, showing price pressures easing across the board, suggesting the economy could be turning. Sterling Positive rate surprises are not always positive for the currency. The Pounds muted response (-0.17%)12 to the BOE meeting despite the hawkish surprise and its negative reaction (-0.21%)13 to the hawkish May inflation data suggest that the BOE is prepared to endure a deeper slowdown in order to bring inflation under control. As a growth sensitive currency this is likely to remain an important headwind for the Pound. Sources 1 Bloomberg as of 23 June 2023 2 Bank of England as of 22 June 2023 3 Bloomberg, as of 23 June 2023 4 Bank of England as of 21 June 2023 5 Office for National Statistics as of 31 May 2023 6 Office for National Statistics as of 31 May 2023 7 Bank of England as of 22 June 2023 8 Source: Bank of England, Bloomberg as of 22 June 2023 9 Office for National Statistics, as of 22 June 2023 10 Institute for Fiscal Studies as of 30 April 2023 11 Bloomberg as of 23 June 2023 12 Bloomberg GBP/USD as on 22 June 2023 13 Bloomberg GBP/USD as on 20 June 2023by aneekaguptaWTE2
S&P 500 Index Continuous Trend Typically, when the Fed raises interest rates, it is a signal that the central bank wants to cool down the economy and prevent inflation from rising too rapidly. In such cases, the initial reaction of the stock market, including the S&P 500 index, might be negative. Higher interest rates can increase borrowing costs for businesses and consumers, potentially reducing corporate profits and dampening consumer spending.Longby RanggaMarshall-Fx8
Global Liquidity Injection via Central Banks - 23rd of JuneThis is a chart that represents the overall liquidity in the global markets via Liquidity Injections from Central Banks.by RugSurvivor4
US home priced in goldThe true housing bubble (in real terms) was back in early 2000s. Another massive top morphing into existence once again. #houseprice #goldby Badcharts4
UK Overnight RateUnited Kingdom overnight lending rate and 10 year yields continuing their march upwards. Paradigm shift events unfolding. #goldLongby Badcharts2
US Military Budget & Support for UkraineOften we hear big numbers (for you and me) in sensationalized headlines for political purposes or propaganda pushed by foreign entities. Rarely are these numbers ever put into context to reveal their true meaning. Today we had such a headline and I decided to reveal the truth. "Pentagon announces 'accounting error' provides extra $6.2 billion for #Ukraine Here is what it means. Less than 2% of the >ANNUAL< US military budget has been used to support Ukraine which BTW has destroyed the '2nd strongest professional military' (Russia) on the planet.by RealMacro8
Unemployment rate compared to yield curve compared to SPX.Great look at historical timing of business vs. market cycle. Based on history, there is a lag from the beginning of breaching the yield curve to when unemployment and thus the economy starts to decline. by steveonisto223
Chile Inflation rate compared with United StatesDisclaimer: This is only a probability based in personal analysis, never represent a decisión of investment. This image compare inflation rate between Chile and United States. Particularly Chile represent in the future a pick elevation of inflation to level 5. This situation increase value of foods aditioned with low disponibility of water. Chile is represented with blue line. United States is represented with light blue line. Difficult situation to Chile. Longby Baldecchi113