Outlook: 2023 Recession Likely Deeper and Longer
Last year, our year-end outlook blog was titled: Outlook: 2022 Growth Will Likely Disappoint. And disappoint, it did. Real GDP was negative in Q1 and Q2, and while Q3 showed a slight bounce, through Q3, the economy’s annualized real growth was less than +0.2% (that’s not a typo). Thus, last year’s outlook headline couldn’t have […]
Despite Black Friday/Cyber Monday – Holiday Sales Will Likely Disappoint
It’s Black Friday/Cyber Monday weekend. Consumers are looking for bargains. Despite what may be a better-than-expected start to the holiday season, for reasons discussed below, the indicators that measure the state of the U.S. consumer are mainly downbeat, and we think that overall, holiday sales will disappoint. So, while we might see an initial surge […]
Inflation is on the Wane
Why the Fed is Still So Hawkish The evidence on inflation is quite clear; it peaked in June and is now on the wane. The latest data came from the Producer Price Index (PPI) which rose only 0.2% in October (consensus was +0.4%). This is a monthly level the Fed could live with (2.4% annual […]
Employment Report – Not What Meets the Eye
Fed Near End of Rate Hikes The big news today was that payrolls increased by +261K. This caused markets to rally (shoot first, ask questions later). Interest rates moved up because the headline +261K may cause the Fed to be even more hawkish. Nevertheless, beneath the veneer, this was a very weak employment report. There […]
Tamer Inflation
But Trouble Lies Ahead as Fed Has Overtightened As we go to press, the Fed has called an Emergency Meeting for Monday, October 3. The official reason is a “Review and determination by the Board of Governors of the advance and discount rates to be charged by the Federal Reserve Banks.” Our view is that […]
The Recession: It’s Here
Inflation Prognosis: Lower Equity investors just endured the worst first six months of any year since 1970. This occurred despite a “Bear Market” rally in May. For the month, the S&P 500 was down -8.4% (see last column of table) as was the Russell 2000, with the Nasdaq down -8.7% and the DJIA -6.7%. All […]