Week of Nov 20: Macro, Markets

Getting money, and being able to keep that money are two vastly different skills:

Getting money requires action, taking risks, being positive.

Keeping money requires just the opposite skills – playing safe, being fearful, and a lot of inaction.

Global Yield Curve Inverted

First time in at least two decades the global yield curve has inverted. Global recession?

Commodities

Looking at futures in GOLD and SILVER. Gold = MGC and Silver = SIL

Also Sugar, Lithium, Fertilizers and other metals

If we get a stagflationary environment which looks possible, then commodities will outshine the traditional 60/40 portfolio. Commodities will appreciate against equities and bonds.

Labor Market

US labor market remains very strong. Initial claims at 225k. Some modest uptick in continuing to 1.6M.

This level of continuing well in line with UE in the 3s%. Would have to see a move ~420k initial claims to be in line with ‘typical’ recession.

Home Sales

Home sales have been declining and now to worst decline since 2002! What about home prices?

M/M they are starting to come down as demand has waned significantly but at what rate & how long will it take to get to preCOVID prices or lower?

Y/Y Home Prices are still UP

PCE OCT Report

PCE UP .3% (same as prev)

CORE UP .2% (vs .5% prev)

Y/Y DOWN

Improvement but still highly elevated.

Manufacturing PMI NOV Report

Down to 49% (1.2% lower than Oct) – Contracting

New orders – Contracting

• Demand eased

• Output/Consumption declined M/M

• Inputs accommodated future growth

• Petro & coal products & transportation equip – weak-moderate growth in Nov