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RECESSION Watch & Yield Curve Warnings

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RECESSION WATCH & WARNINGS

Yield Curve ... update : 30yr : 10yr-TNX : 2yr :

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ISM Manufacturing PMI Hits 49.1%, Officially Contracting...

U.S. Consumer Sentiment Falls Most Since 2012 on Trade Fears

Link to the report: www.instituteforsupplymanagement.org/ismreport/mfgrob.cfm?SSO=1

If anyone was wondering why the market dipped again after 10AM here’s why. Trade policy concerns and supply chain impacts are being cited as some of the largest reasons for slowing orders and leaner inventories. This is one of the indicators the FOMC is going to be looking at when they make their next rate decision and this is the first time this particular indicator has been in contraction territory in years.

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Sharpest decline in new work since March 2009

New orders fall at fastest pace for over ten years in August…

Mass Layoffs Are Back. Are You At Risk?

today’s US companies are as or more dangerously leveraged than ever before. More than $9 Trillion of debt now burdens the balance sheets of America’s corporations:

Corporate indebtedness charts

As growth continues to slow and corporate profits decline, debt service takes up an ever-greater percentage of cash flows. At some point, headcount cuts become unavoidable.

The Robot Took My Job

On top of that, as we’ve been long warning about here at PeakProsperity.com, employers currently have a tremendous perverse incentive to automate and replace human labor with technology.

LINKS

ART thread :

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WHY the Sudden Halt (in Luxury spending) ?

Luxury Property, & other Luxury Goods are not selling well

Uh, OH! The Top 10% Account For 50% Of Consumption, But The Wealthy Have Stopped Spending

  • A sudden pullback in spending among the wealthy could cascade down to the rest of the economy and create a further drag on growth.
  • High-end real estate is having its worst year since the financial crisis.
  • Luxury retailers are struggling while discounters like Walmart and Target thrive.
  • At this month’s massive Pebble Beach car auctions, the most expensive cars faltered on the block.
  • In the first half of 2019, art auction sales were down for the first time in years.

The rich have cut their spending on everything from homes to jewelry, sparking fears of a trickle-down recession that starts at the top.

From real estate and retail stores to classic cars and art, the weakest segment of the American economy right now is the very top. While the middle class and broader consumer sections continue to spend, economists say the sudden pullback among the wealthy could cascade down to the rest of the economy and create a further drag on growth.

Luxury real estate is having its worst year since the financial crisis, with pricey markets like Manhattan seeing six straight quarters of sales declines. According to Redfin, sales of homes priced at $1.5 million or more fell 5% in the U.S. in the second quarter. Unsold mansions and penthouses are piling up across the country, especially in ritzy resort towns, with a nearly three-year supply of luxury listings in Aspen, Colorado, and the Hamptons in New York.

Retailers to the 1% are faring the worst, with famed Barney’s filing for bankruptcy and Nordstrom posting three consecutive quarterly declines in revenue. Meanwhile, Wal-Mart and Target, which cater to the everyday consumer, are reporting stronger-than-expected traffic and growth.

At this month’s massive Pebble Beach car auctions, known for smashing price records, the most expensive cars faltered on the auction block. Less than half of the cars offered for $1 million or more were able to sell. But cars priced at under $75,000 sold quickly — many for far more than their estimates.

In the first half of 2019, art auction sales were down for the first time in years. Sales at Sotheby’s dropped 10% and Christie’s auction sales were down 22% from a year ago.

(Note: the ART market, as reflected in Sothebys stock was a bellwether signalling a downturn in stocks & a possible recession...

UNTIL the company received a surprise takeover Bid* in June 2019)

BID / Sotheby's ... since 2007 : 2012 / Last: $50.00

EhkeRBK.gif

There are many reasons for spending declines — tax changes, for instance, are to blame for some of the real estate slump.

===

* Patrick Drahi, a French-Israeli tycoon bids $2.7 Bn for Sotheby's:

"When this consummate outsider announced on June 17 that he would shell out $2.7 billion to purchase Sotheby’s, the iconic 275-year-old auction house, a raft of questions followed. Is he seeking a trophy asset to sit on his shelf, or will he shake up a firm that had seen its share price tumble by 40% in a year? Is it wise to pile more debt onto Sotheby’s? "

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Here's a List of Recession Signals That Are Flashing Red

Whether or not the U.S. is going into a recession is on the minds of Americans everywhere.

Google searches show recession fears have spiked dramatically since the end of July, when the Federal Reserve cut interest rates for the first time since the financial crisis.

 

Recessipon.1567095014382.JPG

Data is coming at investors from every angle with so-called recession indicators flashing signs of an economic slowdown brought on by slower growth abroad and the U.S.-China trade war. A slowing global economy is pressuring central banks abroad to lower borrowing rates at unprecedented levels and a tit-for-tat tariff war between Washington and Beijing is weighing on business sentiment.

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LIST

+ Bond market: Yield curve has inverted
+ GDP: 2% is lowest growth since Q4.2018, down from 3%
+ Corporate Profits: earnings estimates are falling fast
+ PMI/ Manufacturing - in US, growth is slowest in 10 years
+ Cass Freight index - fell in June & July
+ Copper - down 13% in the last six months
+ Gold - soared 20% since May
+ Uncertainty index - hit highest level, with trade war
+ Business spending - Q2 tumbled 5.5%, weakest since 2015

Dr Copper sliding versus Gold

j7SWB2F.png

Credit Deterioration? Shift from Corporate Bonds to US Treasuries

v3xZmKe.png

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BIG RATE MOVE into Likely Recession. As the FED reverted to aggressive easing

This ETF DOUBLED!

TMF is a 3X Bull etf of Long Term rates ... update / last: $xxx vs Yr.Low :

N21qLWC.gif

TLT / All-data : 10yr : 5yr : 2yr : 6mo / 10d - Last:

dQzkGbm.gif

 

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FED may be "Pushing on a String" - with lower rates not reviving the Economy

(Oil & Copper etc might not "get off the floor")

A Historical Look at Recession Watch (w/ Kiril Sokoloff & Raoul Pal)

The real Achilles heal is Corporate Debt > Junk Bond prices are too high

Gold prices have been surpressed

Where to GO? 

Europe & Japan maybe?  Plus Emerging markets

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Very interesting INTERVIEW !

Victor is clear speaking & clear-thinking

Defensive Investing & the History of Recession (w/ Victor Sperandeo) | Real Vision Classics

https://www.youtube.com/watch?v=apmAE0cfEPY

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IF SAVED (from Recession), these prices may be Peaking...

BONDS n'Gold rose together ... Will they now slide together?

Perhaps an obvious Right Shoulder will get formed first (if this is a Head)

TLT vs-GLD .. fr.Oct.2018 : ? / Last: $144.76 -1.8% / $143.14 -2.2% = Ratio: 101.3%

8K1sqVX.gif

Maybe long term rates have dropped far enough... Perhaps the big move down in rates will cancel the recession.

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"Talk Is Cheap": Here Are The 3 Signals That A Real US-China Trade Deal Is Coming

trump%20xi%20handshake%202_0.jpg?itok=MW

"So far, it doesn’t seem to us that any of these signals have appeared. Hence we expect more ‘cheap talk’ than ‘real deal’. " - Morgan Stanley

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