Daily Futures Trading Update
Futures Market Insight w/John Caruso – 11/01/2019Posted 11/01/2019 10:37AM CT |
Where have we been, where are we now, and where are we going? These are the cycle questions we’re constantly asking ourselves.
Where we WERE: Econ Scenario 4 (Growth slowing, Inflation slowing) in Q3 2019.
Where we ARE currently: Econ Scenario 3 (G Slowing, I accelerating) is where we are now and expect to be through Q1 2020.
Where we’re Going: Econ Scenario 3 thru Q1 2020 (mentioned above) FOLLOWED by Scenario 4 (G Slowing, I slowing) in Q2 2020.
The consumer seems to be the main component holding the entire economy together at the moment (Consumer spending is roughly 70% of the economy, so yeah it’s important). CAPEX spending decelerated at an alarming pace in last week’s Durable Goods Orders data which slowed to a cycle low of -5.4% – Now riddle me this, what happens if we do see inflation accelerate over the next 2 quarters, with bump in consumer and producer prices? Well household discretionary spending gets eaten up by inflated costs of Oil, Gas, Food, and Materials – basic necessities for everyday American lives. This could be the final straw that spins the economy into recession. BUT I WANT TO REITERATE THIS NOW – WE STILL DON’T HAVE THE RECESSION CALL ON YET! The consumer has been the glue holding this entire “thing” together – if the consumer takes a hit, that’s when we think it’s time to put the landing gear down for the US Economy.
Employment Situation –
Jobs: 128K vs 90K Exp BEAT
Rate: 3.6% vs 3.6% Exp UNCH
Wages: 3.0% vs 3.0% y/y UNCH
A successful number on the margin!
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