Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
You Should Be Buying Gold Stocks Now - 6th Dec 19
The End of Apple Has Begun - 6th Dec 19
How Much Crude Oil Do You Unknowingly Eat? - 6th Dec 19
Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast - 6th Dec 19
Gold Price Forecast – Has the Recovery Finished? - 6th Dec 19
Precious Metals Ratio Charts - 6th Dec 19
Climate Emergency vs Labour Tree Felling Councils Reality - Sheffield General Election 2019 - 6th Dec 19
What Fake UK Unemployment Statistics Predict for General Election Result 2019 - 6th Dec 19
What UK CPI, RPI and REAL INFLATION Predict for General Election Result 2019 - 5th Dec 19
Supply Crunch Coming as Silver Miners Scale Back - 5th Dec 19
Gold Will Not Surpass Its 1980 Peak - 5th Dec 19
UK House Prices Most Accurate Predictor of UK General Elections - 2019 - 5th Dec 19
7 Year Cycles Can Be Powerful And Gold Just Started One - 5th Dec 19
Lib Dems Winning Election Leaflets War Against Labour - Sheffield Hallam 2019 - 5th Dec 19
Do you like to venture out? Test yourself and see what we propose for you - 5th Dec 19
Great Ways To Make Money Over Time - 5th Dec 19
Calculating Your Personal Cost If Stock, Bond and House Prices Return To Average - 4th Dec 19
Will Labour Government Plant More Tree's than Council's Like Sheffield Fell? - 4th Dec 19
What the UK Economy GDP Growth Rate Predicts for General Election 2019 - 4th Dec 19
Gold, Silver and Stock Market Big Picture: Seat Belts Tightened - 4th Dec 19
Online Presence: What You Need to Know About What Others Know About You - 4th Dec 19
New Company Tip: How To Turn Prospects into Customers with CRM Tech - 4th Dec 19
About To Relive The 2007 US Housing Market Real Estate Crash Again? - 3rd Dec 19
How Far Will Gold Reach Before the Upcoming Reversal? - 3rd Dec 19
Is The Current Stock Market Rally A True Valuation Rally or Euphoria? - 3rd Dec 19
Why Shale Oil Not Viable at $45WTI Anymore, OPEC Can Dictate Price Again - 3rd Dec 19
Lib Dem Election Dodgy Leaflets - Sheffield Hallam Battle General Election 2019 - 3rd Dec 19
Land Rover Discovery Sport Brake Pads Uneven Wear Dash Warning Message at 2mm Mark - 3rd Dec 19
The Rise and Evolution of Bitcoin - 3rd Dec 19
Virtual games and sport, which has one related to the other - 3rd Dec 19
The Narrative About Gold is Changing Again - 2nd Dec 19
Stock Market Liquidity & Volume Diminish – What Next? - 2nd Dec 19
A Complete Guide To Finding The Best CFD Broker - 2nd Dec 19
See You On The Dark Side Of The Moon - 2nd Dec 19
Will Lib Dems Win Sheffield Hallam From Labour? General Election 2019 - 2nd Dec 19
Stock Market Where Are We?  - 1st Dec 19
Will Labour's Insane Manifesto Spending Plans Bankrupt Britain? - 1st Dec 19
Labour vs Tory Manifesto Debt Fuelled Voter Bribes Impact on UK General Election - 30th Nov 19
Growing Inequality Unrest Threatens Mining Industry - 30th Nov 19
Conspiracy Theories Are Killing This Nation - 30th Nov 19
How to Clip a Budgies / Parakeets Wings, Cut / Trim Bird's Flight Feathers - 30th Nov 19
Hidden Failure of SIFI Banks - 29th Nov 19
Use the “Ferrari Pattern” to Predictably Make 431% with IPOs - 29th Nov 19
Tax-Loss Selling Drives Down Gold and Silver Junior Stock Prices - 29th Nov 19
We Are on the Brink of the Second Great Depression - 29th Nov 19
How to Spot REAL Amazon Black Friday Bargains and Avoid FAKE Sales - 29th Nov 19

Market Oracle FREE Newsletter

UK House prices predicting general election result

The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months

Economics / Recession Aug 18, 2019 - 06:14 PM GMT

By: QUANTO

Economics

Consumers continue to power economic growth, as retail sales rose 0.7% in July, after a 0.3% increase in June, the Commerce Department reported Thursday. Excluding autos, sales soared 1.0%, after a 0.7% climb in June. Economists polled by IFR Markets expected a 0.3% rise in the headline number and 0.4% excluding autos. Auto sales were down 0.6% in July, after 0.3% growth the prior month.

Preliminary second quarter productivity figures also were positive news for the economy, as non-farm productivity grew a healthy 2.3% on an annualized basis in the second quarter, albeit down from the first quarter’s 3.5% growth, the Labor Department reported. Unit labor costs grew 2.4% in the period, after a revised 5.5% jump in the first quarter, previously reported as a 1.6% decline.

Economists projected a 1.5% gain in productivity and a 1.8% rise in labor costs.


Initial jobless claims rose to 220,000 in the week ended Aug. 10 from 211,000 the prior week, while continuing claims rose to 1.726 million from 1.687 million.

Economists expected 212,000 claims in the week.

The Empire State Manufacturing Survey suggested modest growth, as the general business conditions index crept to 4.8 in August from 4.3 in July. The new orders and shipments indexes also gained. The six-months ahead general business conditions index dropped to 25.7 from 30.8, the Federal Reserve Bank of New York reported. Business inventories were unchanged in June after a 0.3% rise in May, while sales grew 0.1% after a 0.1% decrease in May, the Commerce Department reported. Builders’ confidence in the market for new single-family homes grew as the National Association of Home Builders' housing market index rose to 66 in August from 65 in July. Economists expected a 65 reading.

The yield on two-year U.S. Treasury notes was higher than the yield on the 10-year for a while Wednesday, marking the first time since June 2007 this curve has inverted. Many market participants see this as a sign of a coming recession in the next year or two. Other parts of the curve — the 3-month to 10-year and the 2- to 5-year — inverted earlier this year and remain inverted.

Yield curve inversion is a “long-leading indicator,” said Payden & Rygel Chief Economist Jeffrey Cleveland. “Long because a long period can elapse between inversion and a recession. For example, 2s10s inverted in December 2005 and the recession did not begin until December 2007 — a full 24 months.” The current inversion was, in part, due to two-years rising “(on the hot CPI data) more than 10-year yields (driven more by global concerns, e.g., the low/negative yields in Europe).”

Let us look at some trading charts and some more details regarding the economy.

USDJPY 4HR

USDJPY 4hr timeframe shows a strong downtrend which paused on friday but since then the situation has worsened with HK protests expanding and China gathering troops

The US10Y to the Japanese 10 Year Yield is now at a 2 year lows. On the Japanese debt situation:

Japan's net debt as a share of GDP.

  • 1990: 19%
  • 2020: 153%

USDCAD monthly shows the rebound and August is the best month for USDCAD. The monthly trend is higher and pointing higher.

The index of those hearing bad news regarding the economy is now rising and is at 2 year highs at 12%. This often translates into underperformance on consumer metrics in future retail reading.

The good spot in that is that the wages are still growing very healthy and hence there is a hope that consumer spending may not be affected despite the swirl of bad news about the world economy.

The University of Michigan index of expectation show a drop in level to 82.3 which is a new 2019 lows. The index of current conditions is the lowest since 2016. The consumer which has been a strong point of US economy is starting to wither away.

The above is a good depiction of what different countries charge as Tariff. Brazil has the highest Tariff but US is now second highest among all the countries above.  This has acted as a major source of disruption world supply chain, the full effects of which we will continue to reap in the coming years.

China industrial production is precarious as the yoy growth has dipped to 2009 lows. Tariff have halted production at may factories.

World Bank stock prices relative to general equities have now fallen to all time lows. This is suggestive of a major banking crisis world wide and we could see further and further job cuts across the world. The banking industry will see a major asset repricing.

This the spread of XLU to treasuries.It is dipping signifying the significant crunch in liquidity.

Here is a chart of SPX vs rest of world equities. The US equities are still outperforming other countries equity markets since last one year. The trade war is continuing to benefit US equities

We will be releasing a lot of trading charts for all members so please register. Open a account here: Free Register.

QUANTO Trade copier

We run a successful trading system which is doing well into August.

Current august returns stand at +22% while overall returns +109%

If you would like this performance on your trading account Contact Us

Source: https://quanto.live/dailysetups/the-nuts-and-bolts-its-the-details-that-matter/

By Quanto

http://quanto.live

Quanto.live is a Investment Management firm with active Trading for clients including Forex, Crypto. We send our trades via trade copiers which are copied to clients trading terminals. Top notch fundamental analysis and trading analysis help our clients to generate superior returns. Reach out to us: http://quanto.live/reach-us/

© 2019 Copyright Quanto - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 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