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April 3, 2020 | Vehicle Sales Plunge by 5.5 Million Units, Most Since 1987

Motor vehicle sales plunged over 5.5 million units. On a unit basis this is more than any time since 1987. The 1987 stat is somewhat misleading because it was preceded by unprecedented surges.Total Vehicle Sales vs Lightweight Vehicle Sales​ Vehicle Sales Month Over Month On a month-over-month basis, sales fell 32.15%. On a percentage basis, […]

April 1, 2020 | Fed “Temporarily” Blesses More Leverage: What’s Really Going On?

With reserve requirements down to zero, the Fed has now reduced capital requirements on banks. Another Bazooka to NowhereIn yet another act of Fed desperation, Big Banks Get Blessing to Extend Leverage. To ease strains in the Treasury market resulting from the coronavirus and increase banking organizations’ ability to provide credit to households and businesses, the […]

March 25, 2020 | Retail Grinds to a Halt as 47,000 Stores Close

As stores shutter and business grinds to a halt, what are the store owners supposed to do? Bloomberg reports 47,000 U.S. Stores Closed in About a Week Over Coronavirus. In a little over a week, American retail ground to a near-total halt. More than 47,000 chain stores across the U.S. temporarily shut their doors in 10 […]

March 23, 2020 | Fed Fires Bazooka of New Unlimited Market Interventions, Gold Soars

The Fed fired an array of new market measures this morning. The Market rallied then had second thoughts. The Fed hopes to unclog corporate and municipal debt markets with its New Bazooka of Unlimited Interventions. The U.S. Federal Reserve on Monday rolled out an extraordinary new array of programs aimed at blunting the “severe disruptions” to […]

March 17, 2020 | $1,000 in Free Money Won’t Go Far

The hotel, airline, and travel-related industries are reeling. Marriott alone will lay off tens of thousands of workers. The Wall Street Journal reports Marriott Begins Furloughing Tens of Thousands of Employees. Marriott International Inc., the world’s largest hotel company with nearly 1.4 million rooms world-wide, said it is starting to furlough what it expects will be […]

March 13, 2020 | How Much Recession Warning Did You Expect?

How often have you heard the stock market looks a year ahead of a recession? Stock Market is Not Forward LookingA widespread myth persists that the stock market is a leading indicator of recessions, providing a year or more warning on average before one starts. Actually, the stock market is a coincident indicator of sentiment […]

March 6, 2020 | Crude Collapses Since Start of Year: A Credit Implosion Up Next

Crude extended it plunge today. For the year, it’s down 32.5%. Crude Last Six Months Credit Implosion Coming Up A lot of leveraged drillers and crude suppliers dependent on prices above $50 will see a credit implosion. That’s just a start. A Supply Shock and a Demand Shock are Coming Up. Deflationary Outcome As noted previously, […]

March 3, 2020 | Inversions Despite Surprise Cut: More Cuts Coming

This morning the Fed made an emergency 50 Basis point rate cut. More are coming. Note: The Effective Fed Funds Rate of 1.090 is my guess. The New York Fed will post it tomorrow.This morning I commented Fed Makes Surprise Inter-Meeting 50 Basis Point Rate Cut. Strong inversions and Fed Fund Futures were the key to […]

March 2, 2020 | Global Recession Now Baked in the Cake

The JP Morgan, Markit Global Manufacturing PMI signals a global recession. Global manufacturing suffers steepest contraction in over a decade as COVID-19 outbreak hits supply chains and demand according to Markit.Six Key Points Global Manufacturing PMI slumps to 47.2 Survey-record contraction in China; rest of the world stagnates on average Global trade falls at fastest pace […]

February 29, 2020 | China PMI Contracts to the Weakest on Record

China’s manufacturing and service PMIs plunged to their worst readings in history. In the midst of a coronavirus pandemic, China Posts Weakest Factory Activity on Record The manufacturing purchasing managers’ index plunged to 35.7 in February from 50 the previous month, according to data released by the National Bureau of Statistics on Saturday, much lower than […]

February 28, 2020 | New Record Low Yields on 10- and 30-Year Bonds: Double Cut?

Treasury yields continued a massive plunge today with new record lows. I sense a double rate cut by the Fed on March 18. CME Fedwatch Odds If these yields hold the Fed will practically be forced to cut interest rates by 50 basis points on March 18. As it stands a quarter point cut would […]

February 27, 2020 | The Fed Will Cut Rates on March 18

It’s now baked in the cake. The Fed will cut rates on March 18 and most likely at least twice more. According to CME Fedwatch the odds of a rate cut in March jumped to 96.3% today from 8.9% a week ago.Looking ahead to December, it’s highly likely at least two additional cuts are on the way. […]

February 25, 2020 | Mythical Rotations: With Equities Plunging, Where’s the Money Going?

With stocks down 3% a reader wanted to know where the money is going? Q: If the money is fleeing the stock market, bond yields down, where is the money flowing?A: Nowhere More precisely, the premise is invalid. Money does not and cannot flow out of equities into bonds or anything else. Nor can there […]

February 24, 2020 | Bond Yields Crash and Gold Soars on Pandemic Threat

The 30-year long bond yield crashed to a record low, gold jumped, and equities hammered as fears of a pandemic mount. The stock market has finally come to grips with the notion the coronavirus is not contained. Cases are rising exponentially in South Korea, Italy, Japan, and Iran.Equities Smashed, Gold Jumps S&P 500: -3.2% Nasdaq: […]

February 21, 2020 | With Half of China Locked Up, Car Sales Plunge 92%

Car sales in China for the first two weeks in February are down 92% from a year ago. When you are locked in your home for weeks, with no income, and people are dying in the streets, guess what happens to retail sales.Bloomberg reports China Car Sales Tumble 92% in First Half of February on Virus […]

February 19, 2020 | Gold at Record High in Euros, Watch the Yen!

Gold is in a major breakout in the Euro and on the cusp in the Yen. Can the US dollar price be far behind? Gold hit a new record high today for those buying in euros. Let’s investigate gold in US dollar terms and in the Yen.Gold Gold Priced in Yen One Hell of a […]

February 18, 2020 | Largest Shipping Decline Since 2009 and That’s Before Coronavirus

The January Cass Freight Shipping Index is more bad news for the global economy. The Cass Freight Shipping Index is down 9.4% year-over-year, the largest decline since 2009. And this is for January, before the Coronavirus disruption. The turn of the calendar didn’t leave the bad news in 2019, as the Cass Freight Index showed continued weakness […]

February 15, 2020 | It’s Not a Good Time to Start a Business

The Bloomberg Startup Barometer, a measure of business environment health, is in a steep plunge. The Bloomberg Startups Barometer is a weekly indicator that tracks the overall health of the business environment for private technology companies based in the U.S.The index peaked at 1545.32 on June 24, 2019. On February 10, 2020 it fell to 833.74. The […]

February 10, 2020 | Just 5 Stocks Account for 20% of the S&P 500

If you believe you are diversifying by buying an index ETF, you are mistaken. Dave Rosenberg had an interesting set of observations in today’s Breakfast with Dave. The five largest stocks (Apple, Alphabet, Facebook, Microsoft and Amazon) now comprise nearly one-fifth of the entire S&P 500 market cap. This is the highest concentration since the dotcom […]

February 6, 2020 | It’s Likely You Can Refinance Your Mortgage At a Lower Rate

Mortgage rates are approaching record lows. Investigate refinancing. If you have a mortgage, do yourself a favor and check out if it makes sense to refinance.My contact at Black Knight pinged me this morning with these observations: The Freddie Mac 30-year average is now 3.45%, the lowest level in almost 3.5 years and just 14 […]

February 4, 2020 | “Made in China” Economic Hit Coming Right Up

Economic contagion due to the coronavirus is underway. Hyundai halted production. Sony, Apple, and Ford issued warnings. If you can’t get parts, you can’t build cars.And due to a coronavirus-related manufacturing halt in China, Hyundai to Shut Down Some Production. Hyundai, the world’s fifth-largest carmaker, announced Tuesday that it was suspending production lines at its car […]

February 1, 2020 | Effective Fed Funds Rates Jumps to Highest All Year

The effective Fed Fund Rate jumped today, but what does it mean? Highest All YearI do not know the cause but the Effective Rate jump seems unusual.​ My Conversation With the 30-Year Long Bond In My Conversation With the 30-Year Long Bond I noted a “solid wall of inversions” from the three-year note through the Fed Funds Rate. The […]

January 31, 2020 | Equities Hammered in Coronavirus Bull Trap Sea of Red

Stocks are hammered across the board today in a coronavirus-related sea of red. Yesterday’s rally into the close on Amazon earnings is now a huge confirmed bull trap.As I type, we are heading into the close. And it looks ugly.Equity Numbers S&P 500 Futures: -67 Down 2.04% Nasdaq Futures: -219 Down 2.37% Dow: -592 Down […]

January 29, 2020 | Fed Holds Rates Steady, Says Almost Nothing

The Fed held its baseline rate at 150 to 175 basis points. It also made two tiny changes in its statement. Statement Tracker The above from the Wall Street Journal Statement Tracker. Two Changes Spending is now moderate, not strong Inflation is “returning to” rather then “nearing” the objective. Mike “Mish” Shedlock

January 28, 2020 | UK Defies Trump on Huawei 5G Technology Ban, EU Will Follow

UK Prime Minister Boris Johnson gave the go ahead today for the UK to use some Huawei 5G technology. Despite intense pressure form the Trump administration, the WSJ reports U.K. Allows Huawei to Build Parts of 5G Network. The U.K. government has given the green light for Huawei Technologies Co. to build part of its next-generation […]

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