Waiting for Hard Data Threatens to Break the Real U.S. Economy
QUICK QUILL — Continuing claims and Indeed’s job postings both show a persistently weakening job market. A sharp drop in demand for Loading & Stocking positions points to a rapid fall-off in imports, while declines for…
The Fed’s Blinder Bull Flattened the Curve
QUICK QUILL — Uncertainty and dovishness are bedfollows. Unlike last September, when the negativity in the Fed’s Beige Book prompted an unusually large rate cut, inaction promises higher unemployment. The Treasury market yesterday reflected as much.…
WTI Poses Marginal Risk to Consumer Discretionary
QUICK QUILL — The recent drop in oil prices under $60 per barrel flags downside for inflation breakevens, freight volumes, Texas consumer sentiment and Exploration & Production earnings. Because Texas is about 10% of U.S. consumer…
June Rate Cut Odds Pricing is Too Low
QUICK QUILL — ISM Services elicited an unfounded sigh of relief on the macro front. An increasingly defensive business posture and growing excess capacity in both ISM surveys at the second quarter’s outset signal an underpricing…
Permanent Job Losers Flag Recessionary Scarring
QUICK QUILL — Only the nimblest traders will applaud the Fed’s stay of sentence this week. Policymakers are cowering behind data that they know fail to reflect the reality on the ground. Those monitoring the entirety…
Rising Unemployment Risks Will Embolden Treasury Bulls
QUICK QUILL — The front-running evident in ISM New Orders has provided a cheaper entry point along the Treasury curve validated by other ISM details, which were decidedly bearish for global trade, industrial output and manufacturing…
Go Long Shorter Duration
QUICK QUILL — The negative sign in front of first quarter U.S. GDP was an expected math construct. However, the unfavorable mix between first-quarter supply and demand coupled with a record spike in tech equipment investment…
An Income Shock Will Manifest as Deflation
QUICK QUILL — Conference Board consumer confidence has morphed from a labor shock to an income shock. As precipitously as forward-looking expectations fell, the present situation index also points to the risk of a “real” income…
Rent Any Risk Asset Rally
QUICK QUILL — Given that four in ten Texas manufacturers cannot passthrough higher input costs, the risk is rising that stagflation is but one stop on a path to a nasty margin squeeze, a caveat that…