Chemicals and Housing Flag Recession

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.

  1. 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
  2. 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%
  3. 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
Posted in Quick Quill.