Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
Brexit Party and Lib-Dems Pull Further Away from Labour and Tories in Latest Opinion Polls - 22nd May 19
The Deep State vs Donald Trump - US vs Them Part 2 - 21st May 19
Deep State & Financial Powers Worry about Alternative Currencies - 21st May 19
Gold’s Exciting Boredom - 21st May 19
Trade War Fears Again, Will Stocks Resume the Downtrend? - 21st May 19
Buffett Mistake Costs Him $4.3 Billion This Year—Here’s What Every Investor Can Learn from It - 21st May 19
Dow Stock Market Trend Forecast 2019 May Update - Video - 20th May 19
A Brief History of Financial Entropy - 20th May 19
Gold, MMT, Fiat Money Inflation In France - 20th May 19
WAR - Us versus Them Narrative - 20th May 19
US - Iran War Safe-haven Reasons to Own Gold - 20th May 19
How long does Google have to reference a website? - 20th May 19
Tory Leadership Contest - Will Michael Gove Stab Boris Johnson in the Back Again? - 19th May 19
Stock Market Counter-trend Rally - 19th May 19
Will Stock Market “Sell in May, Go Away” Lead to a Correction… or a Crash? - 19th May 19
US vs. Global Stocks Sector Rotation – What Next? Part 1 - 19th May 19
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19
It’s Not Technology but the Fed That Is Taking Away Jobs - 16th May 19
Learn to Protect your Forex Trading Capital - 16th May 19
Gold Ratio Charts Offer The Keys to the Bull Market - 16th May 19
Is Someone Secretly Smashing the Stock Market at Night? - 16th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

Yes, We're Still in a Recession

Economics / Recession 2008 - 2010 Jul 06, 2009 - 07:10 PM GMT

By: Paul_J_Nolte

Economics

In the words of Maxwell Smart…missed it by that much! The jobs report came in much worse than expected and forced investors to review their “green shoots” thesis and pushing down stocks by 200 points in the process. One of the more interesting points about the jobs data is in the past seven recession since WWII, this one has shown the greatest percentage loss of jobs and unless it bottoms right now, will be the longest decline in jobs, beating the ’73-’74 recession.


Little better news came from the manufacturing sector, where their index improved, however remained below the “sector improving” level. Finally, the weekly reports on jobless and housing remain near extreme levels. The weekly jobless data is still over 600k, an indication that jobs continue to be lost at a rapid rate. The housing data, as e have mentioned in the past, remains very low, even with near historic lows in interest rates, home purchase activity also remains near historic lows. Would you believe, were still in a recession!

The third weekly decline in a row has not broken the market from its wide trading range between 880 and 950 on the SP500. Certainly, many of the indicators we follow are deteriorating and are signaling that we should break down, however they have signaled that break more than once in the past two months.

The new and updated data from the Standard & Poors shows a still declining earnings picture, with earnings down nearly 90% from year ago levels. Earnings season begins anew this week with a few companies reporting, but in earnest, earnings season starts next week. Our various momentum indicators have rolled over and begun to drop, confirming the decline in stocks. However, more importantly are the volume figures, which still show a buying tendency among investors. Friday large decline came on the second lowest volume traded for the year (the first of the year was lower). Until we get volume confirming price, we will lean on the trading range thesis for the markets.
 
The bond model continues to point to lower yields in the weeks ahead. Given the decline in the commodity complex, a Fed not wanting to increase interest rates until they see the “whites of the eyes” of recovery and a recover that now looks to be a thing of the future, bond yields are beginning to once again price in a no-growth scenario. An interesting component of the unemployment report was wage growth – or lack thereof. Wage growth over the past year has come in just over 2%, well below the 4% seen just a year ago. It should be little wonder that with unemployment rising and wages shrinking, the consumer is struggling to find reasons to shop. Until the wage picture brightens, the spending picture remains bleak – and by extension, inflation should also remain tame.

By Paul J. Nolte CFA
http://www.hinsdaleassociates.com
mailto:pnolte@hinsdaleassociates.com

Copyright © 2009 Paul J. Nolte - All Rights Reserved.
Paul J Nolte is Director of Investments at Hinsdale Associates of Hinsdale. His qualifications include : Chartered Financial Analyst (CFA) , and a Member Investment Analyst Society of Chicago.

Disclaimer - The opinions expressed in the Investment Newsletter are those of the author and are based upon information that is believed to be accurate and reliable, but are opinions and do not constitute a guarantee of present or future financial market conditions.

Paul J. Nolte Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules