Several highly reliable signals suggest a recession is imminent. The Institute of Supply Management (ISM) Purchasing Managers Index (PMI) fell to 46 in June. Over the last 70 years, similar levels have indicated the U.S. was already in a recession with very few false positives (from Charlie Bilello via Twitter on July 3)… Posted onJuly 27, 2023August 8, 2023AuthorPorter & Co.
And as Michael Kantro – Chief Investment Strategist at investment bank Piper Sandler – reminds us, every impending recession looks like a “soft landing,” until it doesn’t (from Kantro via Twitter on July 22)… Posted onJuly 27, 2023August 8, 2023AuthorPorter & Co.
The LEI has also now contracted for 15 consecutive months, a streak that has only occurred twice before: during the severe recession of 1973-1974 and the Great Financial Crisis of 2007-2009 (from Liz Ann Sonders via Twitter on July 21)… Posted onJuly 27, 2023August 8, 2023AuthorPorter & Co.
The Federal Reserve’s preferred measure of the U.S. Treasury yield curve has never been this inverted without a severe recession following (from Ian Harnett via Twitter on July 5)… Posted onJuly 27, 2023August 8, 2023AuthorPorter & Co.
The Conference Board’s Leading Economic Index (LEI) – which tracks a basket of indicators whose changes tend to precede changes in the real economy – also declined again in June, bringing its current “peak-to-trough” drawdown to -9.9%. Since 1960, contractions of this magnitude have only occurred when the economy was already in a recession (from Liz Ann Sonders via Twitter on July 21)… Posted onJuly 27, 2023August 8, 2023AuthorPorter & Co.
We’ve seen a rare confluence of extremes in June. Investors went “all-in” on megacap growth (MGC) and tech stocks, shown by pandemic-level net call buying and all-time record inflows into tech funds (from Deutsche Bank/TheStalwart via Twitter on June 3)… Posted onJune 26, 2023June 29, 2023AuthorPorter & Co.
This was followed by a record amount of call buying in small-cap stocks via the iShares Russell 2000 ETF (IWM) (from Goldman Sachs/Mayhem4Markets via Twitter on June 7)… Posted onJune 26, 2023June 29, 2023AuthorPorter & Co.
Short sellers capitulated at one of the fastest weekly paces in years (from Goldman Sachs/Marlin_Capital via Twitter on June 9)… Posted onJune 26, 2023June 29, 2023AuthorPorter & Co.
The American Association of Individual Investors (AAII) Sentiment Survey showed “net bullishness” (% bulls minus % bears) surged above 20% – its highest level since November 2021, just weeks before the bear market began (from AAII/biancoresearch via Twitter on June 12)… Posted onJune 26, 2023June 29, 2023AuthorPorter & Co.
Meanwhile, the S&P 500 became even more overbought than it was at the bull market peak in late 2021/early 2022 (from bespokeinvest via Twitter on June 13)… Posted onJune 26, 2023June 29, 2023AuthorPorter & Co.