The Macro Moment: We Are Seeing Cracks In The US Economy
(Edited)
As forecast some of the data is turning sour after the start of the new years. Of course, some of this dates back to December and, as always, one reading does not create a trend.
In this video I discuss some of the baraomters we are watching with regard to the state of the economy. The data that came out was a bit concerning although not unexpected.
▶️ 3Speak
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Definitely everything looks like a dream at first,but finally it is looking so real right now
Not a burst in the dam yet but there are some signs that things are not as rosy as all are making it out to be.
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The FED was hawk to increase the policy rate. They may turn to be pigeon when the time comes. A policy rate increase could have a negative impact on stock market.
That is true but the market isnt the economy. The market might hold up due to the flow of capital. A lot of money heading into US assets from China and Europe.
I dont think rates end up going up. The Fed can move the overnight rate but no effect on the 10Y and 30Y.
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Summary:
In this macroeconomic analysis, Task discusses various indicators that suggest potential cracks in the U.S. economy. He starts by mentioning a decrease in existing home sales, followed by crude oil and gasoline inventories. Task emphasizes the importance of gasoline reserves as an indicator of the U.S. economy's health. He also mentions a significant increase in initial jobless claims, which could have implications for the economy. Task highlights factors such as dwindling new orders and increasing PPI impacting the economy and mentions a possible trend of companies laying off employees due to squeezed margins. Overall, Task predicts tough economic conditions in the next six months due to the waning effects of previous stimulus measures.
Detailed Article:
Task's analysis delves into multiple economic indicators that may signal trouble for the U.S. economy. He starts by discussing the 4.8% month-over-month decrease in existing home sales for December, indicating a potential slowdown in the housing market. This decline is noted before the recent surge in mortgage rates, hinting at further impacts on housing in subsequent months.
Moving on to crude oil and gasoline inventories, Task points out that while crude oil inventories increased slightly, gasoline inventories have been consistently rising. He emphasizes the significance of gasoline reserves as they reflect consumer behavior and can serve as a barometer for the overall U.S. economy. The notable increase in initial jobless claims, surpassing expectations at 286k, further adds to the concerns about economic stability.
Task then elaborates on factors impacting demand and supply dynamics in the economy. He discusses how companies may misinterpret demand due to allocation systems and dwindling new orders, leading to potential layoffs as profit margins come under pressure. The rising Producer Price Index (PPI) compared to the Consumer Price Index (CPI) indicates squeezed margins, potentially forcing companies to make tough decisions like cutting jobs to maintain profitability.
Furthermore, Task predicts challenging economic conditions ahead, suggesting a reversal in the positive economic trends witnessed in recent times, largely fueled by previous stimulus packages. With stimulus measures winding down, he anticipates the real impact on the economy to materialize in the coming months, cautioning viewers about the tough economic headwinds expected in the near future.
In conclusion, Task's analysis serves as a warning about possible cracks emerging in the U.S. economy, driven by factors ranging from housing market trends to oil inventories, jobless claims, and profitability challenges faced by businesses. His insights provide viewers with a comprehensive overview of the economic landscape and offer a cautionary outlook for the months ahead.