Recession Risk Increasing
Widespread economic data reflecting unhealthy market indicating significant risk of total market correction (stagflation/recession)
1. Inflation (CPI, PPI) sharly rising at levels not seen in 4 decades
2. Leading indicator: New Home Sales declining, with increasing housing supply
3. Lagging Indicator: Durable Goods month over month and year over year declined
4. Commodity prices rising sharply including oil closing in on all time high
5. Money supply at volumes far above sustainable levels
6.Overnight Reverse Repo currently at $1.7 Trillion
7. Gold monthly chart reflects bullish cup and handle pattern formed from 2011 to present with price target of 2.5k
Labor market is realizing extreme shortage, with decreasing labor availability in a trend that the BLS has identified for years. Competition for scarce labor increasing as there are more jobs than total workforce available to fill them even at 100% employment. This trend is predicted to continue for the remainder of this decade.
Federal Reserve lacks credibility with current regime losing ability to sway markets. FOMC communicated tightening policies with incremental 25 bps rate hike and the markets responded with the healthiest week of growth in over 2 years.
1. Inflation (CPI, PPI) sharly rising at levels not seen in 4 decades
2. Leading indicator: New Home Sales declining, with increasing housing supply
3. Lagging Indicator: Durable Goods month over month and year over year declined
4. Commodity prices rising sharply including oil closing in on all time high
5. Money supply at volumes far above sustainable levels
6.Overnight Reverse Repo currently at $1.7 Trillion
7. Gold monthly chart reflects bullish cup and handle pattern formed from 2011 to present with price target of 2.5k
Labor market is realizing extreme shortage, with decreasing labor availability in a trend that the BLS has identified for years. Competition for scarce labor increasing as there are more jobs than total workforce available to fill them even at 100% employment. This trend is predicted to continue for the remainder of this decade.
Federal Reserve lacks credibility with current regime losing ability to sway markets. FOMC communicated tightening policies with incremental 25 bps rate hike and the markets responded with the healthiest week of growth in over 2 years.
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