US Economic News

Watershed CPI yesterday and 2 rate cuts now becoming consensus. PCE number is likely to be even softer. However I think if Fed pre empt with rate cut end this month the rally still has legs but if rate cut in Sept might be too late and become classical rate cut when economy slows significantly and will be short term weak market until more rate cuts unfold.

I'm hopeful but not optimistic that Powell will have enough political courage to cut end this month

Jun CPI 2.97%
Jun Core CPI 3.27%

As of 11 Jul Cleveland Fed expecting
Jul CPI 3.01%
Jul Core CPI 3.33%

Jun PCE 2.40%
Jun Core PCE 2.39%
Jul PCE 2.47%
Jun Core PCE 2.47%

(13-06-2024, 11:28 AM)specuvestor Wrote: 2024 Fed target cuts reduced to 1 due mainly to 4 hawkish members looking at no cuts this year while both the chair and vice chair are more moderate

Market however looking at 2 cuts this year versus a hike back in April. Mood swing continues but US equity markets amazingly buoyant even as core PCE inflation target inexplicably raised to 2.8% from 2.6%

May CPI 3.27%
May Core CPI 3.42%

As of 12 Jun Cleveland Fed expecting
Jun CPI 3.15%
Jun Core CPI 3.52%

May PCE 2.62%
May Core PCE 2.56%
Jun PCE 2.55%
Jun Core PCE 2.60%

Biden is gone case and Powell probably may not last till 2026 when his term officially ends because Trump would want him out....

So Powell now is his own master...

What will he do.....he will not want to be blamed for creating a bubble...and we are in a bubble...

'24.07.09【豐富│東南西北龍鳳配】美科技，一個人的武林!?
https://m.youtube.com/watch?v=XGxPE5ksD_4

Trump Reveals Key Pillars Of "Trumponomics": Low Taxes, Sky High Tariffs, Powell Not Fired, Treasury Secretary Dimon And Much More
https://www.zerohedge.com/markets/trump-...d-treasury

A good watch

市場憂美國經濟衰退？科技股大屠殺引領全球股市暴跌？【Yahoo TV ＃風向龍鳳配】
https://m.youtube.com/watch?v=X7AwReHbciU

Watch 28:55....lock the door and put up a fire...

(12-07-2024, 01:15 PM)Behappyalways Wrote: '24.07.09【豐富│東南西北龍鳳配】美科技，一個人的武林!?
https://m.youtube.com/watch?v=XGxPE5ksD_4

On hindside it was more watershed that I expected when Fed didn't cut end of July. But going forward we should be expecting a 25bp cut every FOMC till around 4%, sans possibly November election; especially with Aug headlines CPI and PCE looking to be softer though Core numbers stay sticky.

Jul CPI 2.90%
Jul Core CPI 3.17%

As of 14 Aug Cleveland Fed expecting
Aug CPI 2.60%
Aug Core CPI 3.21%

Jul PCE 2.56%
Jul Core PCE 2.64%
Aug PCE 2.41%
Aug Core PCE 2.77%

(12-07-2024, 12:01 PM)specuvestor Wrote: Watershed CPI yesterday and 2 rate cuts now becoming consensus. PCE number is likely to be even softer. However I think if Fed pre empt with rate cut end this month the rally still has legs but if rate cut in Sept might be too late and become classical rate cut when economy slows significantly and will be short term weak market until more rate cuts unfold.

I'm hopeful but not optimistic that Powell will have enough political courage to cut end this month

Jun CPI 2.97%
Jun Core CPI 3.27%

As of 11 Jul Cleveland Fed expecting
Jul CPI 3.01%
Jul Core CPI 3.33%

Jun PCE 2.40%
Jun Core PCE 2.39%
Jul PCE 2.47%
Jun Core PCE 2.47%

CPI came in almost as expected with hopes of 50bp cut in Sept evaporated but market is still looking at 50bp cut in Nov and Dec which I disagree. Best case is to head towards 4% fed funds with 25bp cuts as headlines inflation probably hit 2% by 4Q. Fixed Income market is still irrational after a 2 year negative yield curve trying to flip to more reasonable positive.

Aug CPI 2.531%
Aug Core CPI 3.197%

As of 11 Sep Cleveland Fed expecting
Sep CPI 2.29%
Sep Core CPI 3.11%

Aug PCE 2.33%
Aug Core PCE 2.77%
Sep PCE 2.09%
Sep Core PCE 2.66%

(15-08-2024, 02:20 PM)specuvestor Wrote: On hindside it was more watershed that I expected when Fed didn't cut end of July. But going forward we should be expecting a 25bp cut every FOMC till around 4%, sans possibly November election; especially with Aug headlines CPI and PCE looking to be softer though Core numbers stay sticky.

Jul CPI 2.90%
Jul Core CPI 3.17%

As of 14 Aug Cleveland Fed expecting
Aug CPI 2.60%
Aug Core CPI 3.21%

Jul PCE 2.56%
Jul Core PCE 2.64%
Aug PCE 2.41%
Aug Core PCE 2.77%

https://www.valuebuddies.com/thread-2417...#pid172000
Well, I still hold the view that relatively and generally speaking, for the average Joe, the older times are easier and it will only get harder and harder to "huat".

The article seems to provide some past quantitative data.

---------------

https://www.moneycontrol.com/news/opinio...34510.html
"Unfortunately, the quality of small public companies — those similar in market value to the businesses that predominate private markets — has deteriorated significantly.

Look at the Russell 2000 Index, probably the best-known tracker of small public companies. In 1995, the index’s profitability, as measured by return on equity, was 7.8 percent. It has trended lower ever since, and this year, Wall Street analysts expect an ROE closer to 2.4 percent. The same trend is apparent when looking at other measures of profitability, including return on capital or assets.

Other data tell a similar story. In 1963, the ratio of small public companies with the lowest ROE to those with the highest was 1.6, according to numbers compiled by Tuck School of Business Professor Ken French. That ratio remained relatively stable for more than two decades, fluctuating between 1 and 2 through the 1980s. But it began to spike in the 1990s and is now closer to 6.

In other words, for every small public company that is highly profitable, many others are struggling. That’s evident in the Russell 2000. Nearly a third of its companies are expected to lose money this year, and an additional 20 percent are expected to eke out a profit of less than $1 a share."

After a surprising 50bp cut in Sept to play catch up for not cutting end July, US inflation will likely be flattish on a YoY basis in 4Q especially with brazil drought and rising oil price, so market expecting rates to go 3% next year probably unfounded.

Sep CPI 2.441%
Sep Core CPI 3.311%

As of 10 Oct Cleveland Fed expecting
Oct CPI 2.55%
Oct Core CPI 3.34%

Sep PCE 2.06%
Sep Core PCE 2.62%
Oct PCE 2.19%
Oct Core PCE 2.71%

(12-09-2024, 07:05 PM)specuvestor Wrote: CPI came in almost as expected with hopes of 50bp cut in Sept evaporated but market is still looking at 50bp cut in Nov and Dec which I disagree. Best case is to head towards 4% fed funds with 25bp cuts as headlines inflation probably hit 2% by 4Q. Fixed Income market is still irrational after a 2 year negative yield curve trying to flip to more reasonable positive.

Aug CPI 2.531%
Aug Core CPI 3.197%

As of 11 Sep Cleveland Fed expecting
Sep CPI 2.29%
Sep Core CPI 3.11%

Aug PCE 2.33%
Aug Core PCE 2.77%
Sep PCE 2.09%
Sep Core PCE 2.66%

Interesting that market so sanguine about ticking up CPI and Dec cut becomes given.

Trump win will be inflationary. Period. That will be medium term positive for stocks (excluding the political rhetorics) on inflationary pressure and 10 years bond yield probably will hit 5% or higher in the next 6-9 months. So I don't think Fed funds will go below 4% next year.

Oct CPI 2.598%
Oct Core CPI 3.333%

As of 13 Nov Cleveland Fed expecting
Nov CPI 2.71%
Nov Core CPI 3.30%

Oct PCE 2.29%
Oct Core PCE 2.76%
Nov PCE 2.53%
Sep Core PCE 2.90%

(11-10-2024, 03:52 PM)specuvestor Wrote: After a surprising 50bp cut in Sept to play catch up for not cutting end July, US inflation will likely be flattish on a YoY basis in 4Q especially with brazil drought and rising oil price, so market expecting rates to go 3% next year probably unfounded.

Sep CPI 2.441%
Sep Core CPI 3.311%

As of 10 Oct Cleveland Fed expecting
Oct CPI 2.55%
Oct Core CPI 3.34%

Sep PCE 2.06%
Sep Core PCE 2.62%
Oct PCE 2.19%
Oct Core PCE 2.71%