Market Performance (YTD)
The core CPI inflation rate remains relatively high mostly due to its rent components. But when you exclude shelter costs, the core rate dropped to 2.7% y/y in June, while the headline rate plunged to just 1.7%! pic.twitter.com/Yi6D7Tf6oc
— Yardeni Research (@yardeni) July 12, 2023
Rent disinflation is now finally starting to show up in official CPI data—and based on leading indicators from private sector data on new leases, more rent disinflation is coming down the pipeline.
ApartmentList's data actually shows rents decreasing slightly since last year pic.twitter.com/DjFBgU08fA
— Joey Politano 🏳️🌈 (@JosephPolitano) July 12, 2023
The collapsing of "supercore," which excludes food, energy, shelter and used cars (the narrowest category BLS publishes) is even more dramatic. Annual rates:
1 month: 0.3%
3 months: 1.1%
6 months: 2.7%
12 months: 3.6% pic.twitter.com/JAgxhYR8MZ
— Jason Furman (@jasonfurman) July 12, 2023
That said, a big part of the year-over-year improvement is base effects: prices were much higher in June 2022. That goes away now, making the second half of the year more challenging. pic.twitter.com/lyvxdwrTMi
— Michael McKee (@mckonomy) July 12, 2023
This is the most important economic chart for the next few months.
Wages are back to growing faster than inflation.
People may start to see their budgets stretch further, and that could be a huge psychological boost for Americans (especially if companies keep hiring) pic.twitter.com/PbRgn3WdYT
— Callie Cox (@callieabost) July 12, 2023
PPI came in below est today, +0.1% y/y & m/m. Yep, that's right–0.1% y/y. Additionally, last month's PPI was revised down. Disinflationary trend here *should* show up in core PCE later this month. pic.twitter.com/XDn0oSnB5f
— Liz Young (@LizYoungStrat) July 13, 2023
This is key to widening profit margins. Companies are able to boost the prices they charge consumers more and more relative to their input costs. https://t.co/G9fYhkaYh7
— Lisa Abramowicz (@lisaabramowicz1) July 13, 2023
It's probably nothing pic.twitter.com/X92d7rFntU
— Markets & Mayhem (@Mayhem4Markets) July 11, 2023
The S&P 500 is trading rich to its 5-year average forward PE multiple (18.9x vs. 18.6x). All of this is due to Tech, where PE multiples stand at 27.2x versus a 5-year mean of 22.4x.$SPY $XLK pic.twitter.com/zcujn8Uu6N
— Nick Colas & Jessica Rabe (DataTrek) (@DataTrekMB) July 10, 2023
— Michael Batnick (@michaelbatnick) July 14, 2023
2) In all seriousness, thought this was a great chart from DB highlighted by @UrbanKaoboy
The average time between the first hike and the start of recession is 19 months and we are in month 16.
Economy less rate sensitive given decline of ARMs so maybe takes much longer. pic.twitter.com/qwVvMhA9CJ
— Gavin Baker (@GavinSBaker) July 17, 2023
Real retail sales have remained in persistent contraction.
Over the last 70 years, sustained contractions in real retail sales overlapped with recessionary periods.
One false signal occurred in 1967. pic.twitter.com/VXtP2do6lT
— Eric Basmajian (@EPBResearch) July 18, 2023
Goldman Sachs chief economist Jan Hatzius:
"We are cutting our probability that a US recession will start in the next 12 months" to 20% from 25%.
"The recent data have reinforced our confidence that bringing inflation down to an acceptable level will not require a recession." pic.twitter.com/DYInbxCf1H
— Nick Timiraos (@NickTimiraos) July 17, 2023
"Soft landing" is now the base case for most investors. Some 68% of fund managers surveyed by Bank of America now see an economic slowdown without recession. Corporate profit expectations are now the least pessimistic since February 2022. https://t.co/q0MkziPooy pic.twitter.com/UKdPhoyx6v
— Lisa Abramowicz (@lisaabramowicz1) July 18, 2023
One of my favorite charts of all-time: the lost returns from listening to esteemed, perennial doomsayers.
— Steven Kelly (@StevenKelly49) July 17, 2023
🇺🇸 Johnson Redbook same store sales turned negative on a YoY basis last week for the first time since April 2020 ⚠
— Christophe Barraud🛢🐳 (@C_Barraud) July 12, 2023
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