earnings season likely to be very disappointing pic.twitter.com/fDzgWJEkTD
— Alastair Williamson (@StockBoardAsset) July 17, 2019
Earnings season is starting off with a bang!$NFLX down 13% in the after-market on US subscriber drop.
Market bulls will try to shrug this off, but this frothy bellwether stock may just be one of the first to crack at the top of the business cycle.t.co/qD9s2XkGXW pic.twitter.com/RWe5IqNT60
— Kevin C. Smith, CFA (@crescatkevin) July 17, 2019
there will be hell to pay pic.twitter.com/KH1mTAi0jD
— Alastair Williamson (@StockBoardAsset) July 18, 2019
All anyone needs to know about the Fed's Beige Book is that the term "flat" was used to describe the economy no fewer than 36 times. Once again, the bond market has the story right.
— David Rosenberg (@EconguyRosie) July 17, 2019
10yr at 2.06%. Let me tell you, it's only going to take a whiff of bad news from Powell or an economic metric, and we'll see 1.50% in short order. pic.twitter.com/i85tJaVrDh
— Randy Woodward (@TheBondFreak) July 17, 2019
Dear @federalreserve – this "data" is from your Beige Book. Which of these explains the reasons why you are about to cut rates? pic.twitter.com/4eAWp4szxP
— zerohedge (@zerohedge) July 17, 2019
— Alastair Williamson (@StockBoardAsset) July 17, 2019
Given that the consumer accounts for over 70% of US GDP, a peak in consumer confidence tends to coincide with GDP falling back below potential. Consumer confidence peaked 8 months ago at +2 standard deviations above trend. pic.twitter.com/o4W7jaelwk
— Julien Bittel, CFA (@BittelJulien) July 17, 2019
The downturn in US manufacturing has now caught up with that in world economy and is beginning to look like that of 2015-6. @MorganStanley via @SoberLook pic.twitter.com/qpmjMI2cao
— Adam Tooze (@adam_tooze) July 17, 2019
Singapore struggling…
Exports -17.30% Y/Y
Electronics exports -31.9% Y/Y pic.twitter.com/RbGRgm9U6h— Eric Basmajian (@EPBResearch) July 17, 2019
Bond market on verge of tripping a signal that could lead to sharp sell-off
All the U.S. stock market seemingly does is set records, so let’s take a look at the world of bonds, where the bulls have been blasting yields lower.
MarketWatch’s call of the day comes from the Leuthold Group, a Minneapolis investment research firm, which tracks the correlation between weekly percentage changes in the S&P 500 SPX, -0.65% and the 10-year Treasury yield TMUBMUSD10Y, -1.27% The correlation between the two flipped positive in the late 1990s, perhaps because of the global economy’s bias towards a decrease in the rate of inflation that stems from rapid technological change and globalization in trade.
Right now, the correlation between the two is at what Leuthold calls an “extreme” level, prone for reversal and, according to the analysis, near a top. Those peaks have identified eight of the last nine best times over the last 18 years to sell bonds. Yields have spiked by an average of 45 basis points in the 13 weeks following a correlation sell signal.
U.S. manufacturing ‘is in recession,’ Fed’s data show
The U.S. factory sector declined in the three months ended in June, the second straight quarterly decline, the Federal Reserve said Tuesday.
For the second quarter, production was down 1.2% after a 1.9% decline in the first three months of the year. Manufacturing fell at a 2.2% rate in the second quarter after a 1.9% drop in the first three months of the year.
For June, industrial production was flat, slightly below the 0.1% gain expected by Wall Street economists.
Compared to 12 months earlier, industrial production rose 1.3%.
Capacity in use slipped to 77.9% in June from 78.1 in the prior month.