Three Weeks in review
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Started by TimNew - Aug. 5, 2022, 10:50 a.m.

Housing Market Index_M/MJul-2267.0055.00D+
Housing Starts_M/MJun-221.549M1.559MC+
Housing Permits_M/MJun-221.695M1.685MC-
Existing Home Sales_M/MJun-225.41M5.12MC-
Pending Home Sales_M/MJun-220.70-8.60D+
Construction Spending_M/MJun-22-0.10-1.10C-
Jobless Claims 1_W/W7/16/2022244K251KC-
Jobless Claims 2_W/W7/23/2022251K256KC-
Jobless Claims 3_W/W7/30/2022256K260KC-
Leading Indicators_M/MJun-22-0.40-0.80C-
Philly Fed Mfg_M/MJul-22-3.30-12.30D+
Chicago Fed Natl Activity_M/MJun-220.01-0.19C-
Dallas Fed Mfg_M/MJul-22-17.70-22.60C-
Kansas City Fed Mfg_M/MJul-2212.0013.00C+
Durable Goods_M/MJun-220.701.90B-
Factory Orders_M/MJun-221.602.00C+
Chicago PMI_M/MJul-2256.0052.10C
PMI Mfg_M/MJul-2252.3052.20C
PMI Svc_M/MJul-2247.0047.30C-
ISM Mfg_M/MJul-2253.0052.80C
ISM Svc_M/MJul-2255.3056.70C+
Consumer Sentiment_M/MJul-2251.1051.50C
State Street Investor's Confidence_M/MJul-2294.60102.20C+
GDP Q2:22_Q/QQ2-1.60-0.90C-
Personal Income_M/MJun-220.500.60C+
Personal Spending_M/MJun-220.201.10C+
JOLTS (Job Openings)_M/MJun-2211.303M10.698MC
Employment Situation_M/M7/1/2022372K528KB-

In the first week of most months, there is not enough data to justify a report, so I often combine the 1st 2 weeks.   Last Friday, I fried the computer where I keep all the data, and did not recover till late Monday, do we'll get a "data dump" this week for 3 weeks of the month.

A lot of mixed signals.

Housing is having a real contraction.   I don't recall the Housing Market index at this level, even in the peak months of the pandemic.  Pending took a dive, Construction Spending, everything with the exception of a slight uptic in Starts. But the market has been overheated for a few years, add in a spike in interest rates, and this is not a big surprise.

Leading Indicators remain negative.

GDP showed another Qtr of contraction, but we saw that coming from a mile away.

Consumers remain in the low range, but in one of the surprises in this report, State Street Investors cheered up quite a bit.   Equities Markets have certainly been looking a little better in the last month or so.

Mfg seems mixed but Durable Goods and Factory Orders had a strong showing. Another surprise IMO.

The ISM and PMI Mfg reports have shown a lot of moderation. But talk about mixed signals, PMI Svc shows contraction while ISM shows a strong 56+.   As I've always placed far more emphasis on ISM,  I'll leave it at that.

Consumer Earning and Spending continue to show steady growth.

Weekly Jobless Claims continue a slow upward journey, but a total increase of 16K over 3 weeks is not earth shattering.  Still in the low normal range.  I'm still watching.

Job Openings dropped about 700K.  Still in record breaking territory and quits remain above 4 million. We have a very confident labor market.

The obvious headline is the consensus busting 528K jobs added in the Employment Situation.  A pretty good report overall, but the participation rate did drop 1 tic. Obviously, from the initial reaction of equities, the fed is in the drivers seat and any news that indicates more aggressive policy will have an effect.

Overall,  I have a better feeling for the numbers than I've had for the last several months,  but the signals remain very mixed.   I can't help but feel we are watching a change in direction. I'm just not sure what that direction will be.  I'll go with a cautiously optimistic C+ based largely on the outsized Employment Report.   I also think dropping fuel prices will act as a natural stimulus.  I remain hoping for the best while preparing for the worst.

By metmike - Aug. 5, 2022, 11:40 a.m.
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Thanks a zillion Tim for the comprehensive review and wonderful contribution.

It's definitely the oddest time for the economy in our lives and hard to figure out.

It seems like it's got such wonderful potential in so many areas but people at the top are messing it up bad because they have agenda's that have a big negative impact on the economy ......while disguising it as something good, so that people are unable to recognize why its so bad.

Like the energy policy.

Or hiding the fact that going fully electric would cost 433 trillion and going all in on something that, ironically is EXTREMELY ANTI environmental and  sucking things out of the economy while creating false narratives to tell us the 100% opposite. 

Liquid energy prices have seen a huge drop recently and that's saving us right now. 

Good signs of increased production recently is a huge plus.

Just an unusually long lag because the big money investments have shunned fossil fuels recently going for what government has made much more attractive/lucrative, fake green energy schemes that are always going to be economy killers compared to fossil fuels. 

By TimNew - Aug. 5, 2022, 11:56 a.m.
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At the risk of going NTR, an "Inflation Reduction Bill" that includes 790 billion in deficit spending is Orwellian.  Double Speak like this belongs in fiction, but it's become "real world".  It boggles my mind.

But next month's CPI/PPI will certainly test my idea that one of the biggest drivers of inflation is energy prices.

By metmike - Aug. 5, 2022, 2:39 p.m.
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We see this with like minds Tim.

This bill was called "The Climate Bill" last year when they wanted everybody to think it would fix the fake climate crisis. Purely a made up name that would do exactly 0 to change the weather or climate but throw massive money at fake green energy, fake environmental plays, while greatly damaging the US economy with an objective to eliminate fossil fuels. 

In 2022, inflation is the biggest they renamed the The Climate Bill  and pretended that it will fix inflation by doing anti inflation things.......while still doing the same things that they originally intended when it was called The Climate Bill last year.

This is the trading forum but politics is powerfully intertwined into the markets and at times, the most dominant factor and impossible to NOT discuss.