Overvældende signaler: Recessionen nærmer sig med hastige skridt

by Mike Shedlock via MishTalk,

Treasury yields have plunged at the mid to long end of the yield curve producing biggest recession warning yet.

Annonce

On Friday, US Treasury yields plunged at the mid to long end of the curve providing the most inversions since the start of the Great Recession. This is the biggest recession warning since 2007.

Yield Curve

Major portions of the yield curve are inverted for nearly 15 years.

Let’s take a look at what others are saying.

Core Capital Goods

Danielle DiMartino@DiMartinoBooth

Durable goods orders April 2019 “Shipments of core capital goods were unchanged last month after a downwardly revised 0.6% decline in the prior month. They were previously reported to have slipped 0.1% in March.” Look out below on Q2 GDP estimates. https://www.cnbc.com/2019/05/24/durable-goods-orders-april-2019.html 

US durable goods orders fell 2.1% in April, vs 2% drop expected

cnbc.com

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That is something I pointed out as well in Dismal Durable Goods Report: Inventories Up, Shipments and New Orders Down.

Core capital goods are a measure of future business expansion. The March revision to the downside was massive, from +1.3% to +0.3%. April was -0.9%. Economists expected +0.1%. Oops.

Strong Economy Not

Danielle DiMartino@DiMartinoBooth

“There are still several economic data points that suggest the economy is strong…But we’ve seen enough in the way of negative layoff headlines and slowing manufacturing to indicate claims are the outlier…” @QuillIintel @YahooFinancehttps://yhoo.it/2Wpn9kA 

What the plunging 10-year Treasury yield says about the economy and stock market

The 10-year Treasury yield has major implications for the stock and housing markets.

finance.yahoo.com

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David Rosenberg@EconguyRosie

Very dismal durable goods orders today. Capex about to join housing in recession. High-tech in the eye of the trade storm — order books down 0.4% in April and contracting in 4 of the past 5 months.

117 people are talking about this

GDP Assessment From Markit

Mike Mish Shedlock@MishGEA

PMI “Consistent with GDP Growing at an Annualized rate of Just 1.2%”https://moneymaven.io/mishtalk/economics/0eh2VUgFcE6TnaiEV7–Lg/ 

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1.2% and falling

What’s the ECB Gonna Do?

Holger Zschaepitz@Schuldensuehner

What’s left in the toolbox: how can combat econ downturn? In order to buy more bonds, ECB would need to raise the limit on how much sovereign debt it can hold from a single issuer, given it was already approaching the current 33% limit when QE ended. https://reut.rs/2Wo7JNB 

47 people are talking about this

Spotlight Trade War

Danielle DiMartino@DiMartinoBooth

“We saw a U.S. Chamber of Commerce report today that American companies that are based in China are being slowing down. They are creating red tape. Every step we take they take another step. This is a trade war.”@DiMartinoBooth @Quillintelhttps://youtu.be/eu2cwWbm5Q0 

18 people are talking about this

What About Systemic Risks?

Michael Lebowitz, CFA@michaellebowitz

Dear Mr. Powell- Can you please tell us why a series of downgrades of BBB companies does not pose the potential for systematic risks.

Read our latest on the corporate bond market- The Corporate Maginot Linehttps://realinvestmentadvice.com/the-corporate-maginot-line/ 

Japanese Exports

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Daniel Lacalle

@dlacalle_IA

Japan exports fall 2.4% while imports rise 6.4%.

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South Korea Exports

Lance Roberts@LanceRoberts

South Korean exports continue to weaken suggesting further slowdown in US GDP.

32 people are talking about this

Major Appliance Shipments

David Rosenberg@EconguyRosie

Look at this chart of major appliance shipments – collapsing 17% YoY in April – and tell me we aren’t heading into a recession.

381 people are talking about this

Recession Already Started?!

Holger Zschaepitz@Schuldensuehner

US recession probably started in current quarter, Gary Shilling says, as Q1 real GDP growth, 3.2% at ann rates, was temporarily inflated by jump in inventories, which contributed 0.65ppts to growth. This was no doubt unintended & undesired as jumps in inventory-sales ratios show.

78 people are talking about this