QI TAKEAWAY — The price of the VIX and long-maturity Treasuries look surreally low given the rapidity with which the economy is succumbing to recession.
- At -3.3, the Philly Fed’s headline manufacturing index printed negative for the first time since May 2020 in June, down from May’s 2.6; meanwhile, New Orders contracted for the first time in two years, and backlogs, delivery times, and inventories were also in the red as all lights flash recession
- Future New Orders collapsed to -7.4 vs. May’s 16.1, and Future Backlogs slipped to -32.0 from last months’ -24.5; Future Delivery Times also hit a record low in data back to 1968, as 44% of surveyed firms see business activity declining over the next six months, up from May’s 22%
- Single family building permits reached their lowest levels since July 2020, while homebuyer traffic, per the NAHB, is now back to June 2020 levels; fast-rising rates, elevated backlogs, and economic uncertainty will all continue to put downward pressure on housing pricing power