May 3, 2023
Market Performance (YTD)
Source: YCharts
Disclaimer: Past performance is no guarantee of future performance
US economy is losing steam: The US GDP grew 1.1% in Q1 2023 ann, slower than the expected 1.9% & slower than previous quarter (2.6%). The main drag came from significantly lower inventory accumulation, while private consumption remained strong. pic.twitter.com/ezpuHeJuNC
— Holger Zschaepitz (@Schuldensuehner) April 27, 2023
US real GDP growth came in weak today, at only 1.1%, but inventory declines were a big factor in keeping that number down
Real Final Sales to Private Domestic Purchases—which aggregates fixed investment and consumption growth & is a good measure of core growth—bounced back pic.twitter.com/qokPYBUNiX
— Joey Politano 🏳️🌈 (@JosephPolitano) April 27, 2023
The core PCE index rose 0.3% in March, with monthly gains for January and February revised up.
+4.9% over the previous 3 months, annualized
+4.2% over the previous 6 months, annualized
+4.6% over the previous 12 months pic.twitter.com/fartjP4sbD— Nick Timiraos (@NickTimiraos) April 28, 2023
US consumers are spending an unprecedented proportion of their disposable income dining out.
I think we might have reached "peak services" consumption. But if so, what's going to buoy the consumer economy from here on out?https://t.co/xYGWW02QVW via @opinion pic.twitter.com/Suf3gAvsDK
— Jonathan Levin (@JonathanJLevin) April 27, 2023
The issue of housing being lagged has gotten a lot of attention. So this version swaps in new rents for all rents. This lowers the 3-month annual rate from 4.9% to 4.2%–not much of a difference anymore. So not much reason to hope housing slowdown will save us on PCE. pic.twitter.com/kptoie51Bn
— Jason Furman (@jasonfurman) April 28, 2023
The Employment Cost Index weighs in on the side of the argument that wage growth is not slowing–suggesting that the average hourly earnings slowdown was a spurious result of composition.
Over the last six months ECI up at a 4.7% annual rate, consistent with 4.0% PCE inflation. pic.twitter.com/aBINBA10gT
— Jason Furman (@jasonfurman) April 28, 2023
The Fed's favorite measure, seasonally-adjusted.
It's interesting – there was a *lot* of interest in the January print of ECI, less so today. Markets are also not moving on anything. But this could play a role in FOMC thinking here. /3 pic.twitter.com/wpU8tdZaKB
— Mike Konczal (@mtkonczal) April 28, 2023
This is one of the most important charts in the economy to watch right now: U.S. construction employment
Construction is usually among the first sectors to suffer job losses when rates rise–and so far, hiring is strong @RyanDezember @_willparker_ https://t.co/vs9luLosNU pic.twitter.com/B03totptWI
— Gunjan Banerji (@GunjanJS) May 1, 2023
ISM Manufacturing improved a touch in April to 47.1 (but still in contraction territory). Prices Paid (not in this chart) came in at 53.2, above the est of 49.0 & last month's 49.2. Treasury yields moved up…message is higher inflation + weak growth. pic.twitter.com/UhG1Sw0iCH
— Liz Young (@LizYoungStrat) May 1, 2023
The Federal Reserve's recession probability model has reached the highest point since 1982 pic.twitter.com/zU8F73F0sQ
— Markets & Mayhem (@Mayhem4Markets) May 1, 2023
Company mentions of "job cuts" now > "labor shortage"
Chart by @alexandraandnyc pic.twitter.com/enK79YuVEt— Emily Graffeo (@emily_graffeo) May 1, 2023
“There’s absolutely no evidence of a recession risk-premium” in the junk-bond market
Spreads have hovered around 4.4 percentage points, down from a peak of 5.2 in March. During recessions–it's typically 8 percentage points or more @WSJmarkets @mattgrossman pic.twitter.com/zqrQCX9XHV
— Gunjan Banerji (@GunjanJS) April 28, 2023
Valuations of 'expanded tech' vs rest of S&P 500.
Forward P/E of Tech about 4 points and 20% above last 20-year median, while excluding 'expanded tech' we are right at the 20-year median…. pic.twitter.com/mxWn67UoEM
— Jeremy Schwartz (@JeremyDSchwartz) May 1, 2023
Investors are bearish in what they say, but not in what they do. A key bullish thesis right now is the contrarian "everyone is already bearish" which does likely help buoy the market near-term, but positioning may not be that conservative. pic.twitter.com/jE1gUNxsYP
— Matthew Miskin, CFA (@matthew_miskin) May 1, 2023
On fixed income markets, "Government bonds remain our favorite place to hide for the upcoming recession. Defaults are starting to inch up in credit markets and will rise much further in a recession." pic.twitter.com/xGeEFlQSeS
— Matthew Miskin, CFA (@matthew_miskin) May 1, 2023
YELLEN: DEBT-LIMIT MEASURES MAY BE EXHAUSTED BY JUNE 1
“our best estimate is that we will be unable to continue to satisfy all of the government’s obligations by early June, and potentially as early as June 1, if Congress does not raise or suspend the debt limit before that time”— Kailey Leinz (@kaileyleinz) May 1, 2023
Disclosure
Clear Rock Advisors, LLC is registered with the SEC as a registered investment advisor with offices in Texas. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by Clear Rock Advisors, LLC) or any investment-related or financial planning consulting services will be profitable, equal any corresponding indicated historical performance level(s), or prove successful. It remains the client’s responsibility to advise Clear Rock Advisors, LLC, in writing, if there are any changes in the client’s personal/financial situation or investment objectives for the purpose of reviewing, evaluating or revising Clear Rock Advisors, LLC’s previous recommendations and/or services, or if the client would like to impose, add to, or modify any reasonable restrictions to Clear Rock Advisors, LLC’s services. A copy of Clear Rock Advisors, LLC’s current written disclosure statement discussing its advisory services and fees are available upon request.