1 Macro Technical SIGNAL

Good News | Technicals

Average Trajectory following 5 Major Peaks of inflation

Flat Energy Prices

Mild Uncertainty

Over the past two decades, when stocks have seen a decline in the two weeks prior to Jackson Hole, they have risen 6 out of 7 times after the central bank's annual conference.

Remember, we are feeling Seasonal Weakness

Bad News | Economy

Jobs are not as Strong as Reported

Retail Earnings Report signaled that Consumers are Weakening..... $FL $NKE

Housing/Real Estate Market Weakness

High Rates Less Demand

Less Demand Less building Permits

Weak Housing Market Weak Manufactured Goods Demand

Ironically New Home Sales are Soaring, but these are homes that are bought before construction which are a much smaller part of the market (not most homebuyers).

Europe Continues to Weaken

United Kingdom + German Economic Activity

Good News | Economy

GDP forcasts Rise

Inflation Expectations Are Falling!

over 1 year ago

Why Crude Oil Moves Lower

In a recent report, I delved into the global oil landscape undergoing profound shifts, particularly with the resurgence of the so-called

Bad News | Hawkish Commentary

After decelerating sharply over the past 18 months, the housing sector is showing signs of picking back up, above-trend growth could warrant further tightening of monetary policy.

No Clearity on a Pause "where is Sufficiently Restrictive"

Real interest rates are now positive. We see the current stance of policy as restrictive, we cannot identify with certainty the neutral rate of interest, and thus there is always uncertainty about the precise level of monetary policy restraint.

Translation: We could break something

Non-Housing Services are the FOCUS

Non-housing services account for over half of the core P C E index, including a broad range of services such as healthcare, food services, transportation, and accommodations. 12-month Inflation in this sector has moved sidewaysTranslation: This is why we need higher for longer

Jobs Tightening

Evidence that the tightness in the labor market is no longer easing could also call for a monetary policy response.

Translation: If Payrolls, Wage Growth or Job Openings strengthen, we will keep hiking

QT - Quantitative Tightening

We have substantially reduced the size of our securities holdings, suggesting that there may be a significant further drag in the pipeline.

Translation: Something could break

The Good News | Dovish Commentary

Labor Market Normalization

Labor supply has improved, driven by stronger participation. Demand for labor has moderated as well. Job openings remain high but are trending lower. Payroll job growth has slowed significantly. Total hours worked has been flat over the past six months, and the average work week has declined to the lower end of its pre-pandemic range, reflecting a gradual normalization in labor market conditions. This rebalancing has eased wage pressures.

Translation: The Labor Market is coming into balance

Core Goods Inflation

"Core Goods Inflation has Fallen Sharply, Motor vehicle inflation has declined sharply. Translation: Progress on Goods not Services

Rent Prices

Because leases turn over slowly, it takes time for a decline in market rent growth to work its way into the overall inflation measure. The slowing growth in rents for new leases over roughly the past year can be thought of as in the pipeline.
Translation: Rent Inflaiton is rolling over

WHEN WILL THE FED END THE HIKING CYCLE?

Global Rates are Shifting