Market Performance (YTD)
-FOMC believes policy is restrictive
-Doesn’t see Fed cutting this year
-Sees 2% inflation w/out big job losses
-Staff no longer forecast recession
Market hears you’re done, soft landing hopes and dreams.
— Jonathan Ferro (@FerroTV) July 26, 2023
The upper bound of the fed funds rate target range at 5.5% is now the highest since 2001. pic.twitter.com/nnF8x0cxut
— Kathy Jones (@KathyJones) July 26, 2023
Rapid rate hike cycle continues. pic.twitter.com/RJQ47OU3Qh
— Kathy Jones (@KathyJones) July 26, 2023
🧱THE Q2 GDP REPORT 🧱
🌍The US economy grew at a 2.4% annualized pace last quarter
💪Consumer spending led growth once again
🏦Business spending grew the most in 6 quarters
😎Hard to have a recession with GDP prints like this
🔥But re-ignited inflation could be a new risk pic.twitter.com/aJ7uyYqs07
— Callie Cox (@callieabost) July 27, 2023
Talk about PE expansion.
The Tech sector's trailing 12-month P/E ratio has risen from the low 20s at the bear market lows last October up to the mid-30s today. pic.twitter.com/VzLMPXnJqZ
— Bespoke (@bespokeinvest) July 26, 2023
Global earnings revisions really ticked up in July. Next 12 month EPS estimates for non-U.S. equities up the most for the month. When reviewing the quarterly estimates, the EPS growth is being back end loaded into Q2 of 2024.
— Matthew Miskin, CFA (@matthew_miskin) August 1, 2023
Excluding incentive-paid occupations, which helps reduce volatility, wages grew by 4.8% over the last year pic.twitter.com/n1LwlUcIta
— Joey Politano 🏳️🌈 (@JosephPolitano) July 28, 2023
The Fed's quarterly Senior Loan Officer Opinion Survey (SLOOS) showed that banks continue to tighten lending standards for both firms and households, which is likely to weigh on GDP growth…eventually(!) pic.twitter.com/O9U7a7hCpm
— MacroMarketsDaily (@macro_daily) July 31, 2023
Construction Spending 0.5%: weaker than expected
ISM Manufacturing 46.4: weaker than expected
ISM Prices Paid 42.6: weaker than expected
JOLTS 9.582 million: weaker than expected
— Bespoke (@bespokeinvest) August 1, 2023
Is there a recession playbook? This chart highlights the drawdown in S&P 500 earnings vs price for five past cycles—1970, 1973, 1990, 2001, and 2008. We know that the market generally (but not always) discounts earnings (the 2000-02 cycle was an exception because the earnings… pic.twitter.com/Hsi0k55hpH
— Jurrien Timmer (@TimmerFidelity) July 26, 2023
'The gap between the earnings yield of the S&P 500 and the yield on the 10-year Treasury inflation-protected security has fallen to its lowest level since 2003.' https://t.co/eGfaIrPVhX pic.twitter.com/ScfeZmmsd5
— Jesse Felder (@jessefelder) July 31, 2023
"There are a total of 45 million people with student loans, and the average monthly student loan payment is around $200, so resuming student loan payments in October will subtract roughly $9 billion from consumer spending every month, or roughly $100 billion a year" Apollo's Slok
— Lisa Abramowicz (@lisaabramowicz1) July 31, 2023
Monetary policy putting downward pressure on inflation with a lag? Used cars is the poster child–rising rates, rising rejection rates on car loans, less credit growth, new leg down in wholesale prices to pressure retail prices in coming months & SLOOS to show ongoing tightening pic.twitter.com/sA9XPDiEBN
— Julia Coronado (@jc_econ) July 26, 2023
One of the big reasons the economy continues to surprise is b/c the consumer is quite healthy.
Love this chart from @sonusvarghese to help explain it.
Bottom line, both disposable income and employee compensation are running well above inflation over the past year.
— Ryan Detrick, CMT (@RyanDetrick) July 31, 2023
As the Fed prepares to give us more cowbell this afternoon….
this your reminder that interest expense as a % of corporate profits is at the lowest levels in over 55 years.
Even US businesses are feeling little effect from rising rates. pic.twitter.com/V04BaYV9qb
— Bill (@wabuffo) July 26, 2023
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