Market Insights & Economic Trends

The seemingly strong consumer has been the lifeblood of this two year expansion. However, we continue to see signs that U.S. consumers are becoming increasingly stressed.

This morning’s Job Openings and Labor Turnover Survey (JOLTS) report from the Bureau of Labor Statistics for September showed a larger-than-expected decrease after last month’s slight uptick.

Today’s CPI data suggests the Fed’s goal of maintaining stable prices –and the all clear to deliver aggressive monetary easing– seems to be getting harder.

There is no doubt this jobs report is good news for those with soft landing hopes, but as shown by the move in the 10-year Treasury yield, strength in the labor market is beginning to throw cold water on potential interest rate relief for investors.

This morning, the Institute for Supply Management (ISM) released their Services Purchasing Managers Index (PMI) for September. Despite today’s more positive report, two subcomponents saw declines.

The spread between the 10-year and 2-year yields recently un-inverted. While this made headlines across financial media, many investors were left wondering what this actually means for the stock market and economy.

The Leading Economic Index (LEI) from the Conference Board fell again by 0.6% in July, which was much worse than expected. Weakness was shown to be widespread in non-financial components.

The July report for the Manufacturing Purchasing Managers Index (PMI) from the Institute for Supply Management fell further into contraction territory as it declined 1.7 percentage points below the June figure. This is the Index’s fourth consecutive month below 50 and it has contracted for 20 out of the last 21 months.

Both Existing Home Sales from the National Association of Realtors and New Home Sales from the Census Bureau saw sales continue to decline and inventory rise and as housing shifts from a seller’s to a buyer’s market.

This morning, the Bureau of Labor Statistics released their June report for CPI. Both Headline and Core CPI came in lower than expected and below the previous month’s figures. Headline CPI for June registered at 3.0%, down from 3.3%, and Core CPI came in at 3.3%, down from 3.4% in May.

The Services Sector Purchasing Managers Index (PMI) from the Institute for Supply Management (ISM) fell 5.0 points to 48.8, missing forecasts and signaling contraction (<50.0) in the services economy.

This morning’s May report on New Home Sales from the Census Bureau fell 11.3% from the previous month.

The unemployment rate was released this morning surprising to the upside and reaching 4.0%. This is up 0.6 percentage points from the cycle low of 3.4%.

This morning’s Consumer Confidence for May from the Conference Board came in above expectations and was an increase of 4.5 points. The Present Situation Index increased by 3.5 points and the Expectations Index increased by 5.8 points. However, the Expectations Index remains below 80, which the Conference Board considers a recession signal threshold.

The Leading Economic Indicator (LEI) from the Conference Board fell in April by 0.6% and has now declined 25 out of the last 26 months.

Consumer Sentiment for May was released this morning and disappointed forecasts, falling nearly 13% from the previous month. The 9.8 index-point drop is the largest in almost three years and reiterates the concerns surrounding remaining consumer strength.

This morning, the Institute for Supply Management (ISM) released their Services Purchasing Managers Index (PMI) for the month of April. For the first time in 17 months, the Services PMI has fallen into contraction territory (<50.0), coming in at 49.4.

Consumer Confidence was released this morning, highlighting serious concerns for the strength of this consumer-led economy. The Consumer Confidence report was pessimistic across the board.

The Leading Economic Indicator (LEI) from the Conference Board has fallen 0.3% in March after a brief, one-month improvement in February. It has declined 24 out of the last 25 months and continues to provide a recessionary outlook.

The S&P 500 is experiencing a selloff and long-term bond yields are jumping as investors digest a hotter than expected CPI report.

This morning’s Personal Consumption Expenditures (PCE) came in as expected, but isn’t falling as quickly as the Fed would like, leaving the door open to potential surprises in either direction.

The Conference Board’s (CB) Leading Economic Index (LEI) increased 0.1% in February – its first monthly increase since February 2022.

The Conference Board’s Consumer Confidence Index fell to 106.7 in February from a downwardly revised 110.9 (from 114.8) in January. This downward revision to January’s figure was significant and suggests that “there was not a material breakout to the upside in confidence at the start of 2024”…

This morning’s release of the Conference Board’s Leading Economic Index (LEI) for January disappointed expectations and fell for the 23^rd consecutive month, its second longest stretch in the series’ history.

Today’s Texas Manufacturing Outlook Survey from the Federal Reserve Bank of Dallas showed further contraction in January after some improvement in December and was a significant downside surprise compared to forecasts.

This morning, the National Association of Realtors (NAR) released their December report for Pending Home Sales. Sales in December were up 8.3% from November and up 1.3% from December 2022. Today’s “surprising” jump in Pending Home Sales doesn’t seem like the huge improvement it’s made out to be…

Yesterday, the latest data for the Conference Board’s Leading Economic Indicator (LEI) was released for December. December saw a 0.1% decrease for its 22nd consecutive month after falling 0.5% in November. Benchmark revisions were made going back to the start of the series.

This week’s economic news has been light due to the shortened holiday week. However, housing market data continues to highlight extreme dichotomies.

Both CPI and NFIB’s Small Business Index were released this morning for November. Inflation remained firm as small businesses continue to struggle…

Pending Home Sales from the National Association for Realtors hit a record low in October, reaching 71.4 – the worst reading in its 22+ year history. Pending home sales typically leads existing home sales for the following month, so this decrease will likely…

Recent macroeconomic reports have shown broad-based weakness as the U.S. economy remains on a collision course with recession…

The Russell 2000 Index has broken below its June 2022 bear market low as technical damage continues to accumulate…

With Distribution falling to -100 in our Negative Leadership Composite, caution is warranted going forward…

Our Negative Leadership Composite has registered an important warning flag in a sign of rising market risk…

With U.S. consumers remaining under significant pressure, a key indicator is nearing a critical warning level…

With Distribution reemerging within our Negative Leadership Composite, the bear market may be close to regaining control…

Cash plays a critical part of every “safety-first” investor’s portfolio, and it pays to know how to get the most out of this key holding…

Speculation reemerged in 2023, however there are early signs that the latest fervor may be fading…

While investors increasingly expect a soft landing for the U.S. economy, the economic data still paints a worrisome picture…

With inflation pressures easing in recent months, the strong employment data has started to play a larger role in the Fed’s monetary policy decisions…

Initial claims for unemployment have risen significantly in recent months, signaling that labor market strength may be fading…

Wall Street has celebrated the S&P 500 reaching “bull market” status by gaining +20% from its October low, however this rally has also led to overbought signals in multiple indicators…

Once again, all eyes on Wall Street are fixed on the debt limit showdown and there is a steady stream of headlines and news reports about the impending crisis that is quickly approaching.

The NFIB Small Business Optimism Index fell to the lowest level in a decade in April as small business owners prepare for tough times ahead…

The Conference Board’s Leading Economic Index has fallen for the 12th straight month as it further solidifies its recessionary warning signal…

While falling inflation seems like a positive development, drops of this magnitude often occur when economic conditions are collapsing and there is little the Fed can do to save the day…

The NFIB Small Business Optimism Index declined in March to remain at a historically low reading…

The Coppock Guide ticked higher in March, yet there are many important factors that can help put this positive signal into context…

The FOMC finds itself in a tough position as inflationary forces persist while the banking system has started to show some vulnerabilities…

The reemergence of Distribution in our Negative Leadership Composite signals that the bears may have regained control of the stock market…

Persistent inflationary pressures continue to keep the Federal Reserve on a tightening path…

Our Negative Leadership Composite has started to generate a positive signal as the technical data continues to improve…

The worsening decline in the Leading Economic Index means that a U.S. recession may have already arrived…

The ISM Services Index suffered its third largest drop in history in December and it is another indicator sending a decisive recession warning flag…

The Leading Economic Index suffered its worst decline since the pandemic, as recession appears to be quickly approaching…

The Consumer Price Index continued to ease in the latest report, yet one key measure shows that wages remain a persistent inflationary force…

The ISM Manufacturing Index fell more than expected in November and is close to raising a recession warning flag…

Consumer Sentiment remained at one of the worst readings in its 60+ year history in November as inflation expectations rebounded and labor market conditions start to deteriorate…

Small business owners remain pessimistic as they contend with many challenges, including persistent inflation pressures and falling customer demand.

The Employment Cost Index remained at a very high level in Q3, which adds further pressure on the Fed to remain on their tightening course.

The Core Consumer Price Index jumped to the highest level since 1982 in September, and broadening inflation pressures show that today’s inflation problem is far from over…

Our Gorilla Index has plunged through its lower support level and is making new lows, indicating that the broad market may be soon to follow…

There is growing evidence of weakness in the U.S. labor market, yet data which matters most to the Federal Reserve is keeping them on a tightening course…

Skyrocketing interest rates have pushed stocks to new lows and indicate that the Federal Reserve still has a ways to go before they can stop tightening monetary policy…

Our short-term Pressure Factor just reached the second most overbought level of the past decade – a big potential headwind for the market in the days or weeks ahead…

Headlines are cheering that 315K jobs were added in August, but the labor market looks a lot less stable when we look below the surface…

Homebuyer traffic has continued to collapse in the midst of this affordability crisis, increasing the risk of a hard landing for housing…

Equities rallied on the decline in inflation last month, but key data shows it may not be the bullish development many are hoping for…

Today’s employment report was stronger than expected, but leading indicators suggest that this strength may not last for long…

Many are debating whether or not the U.S. is in recession after real GDP growth declined for the second straight quarter. More important to investors, however, are the concerning signals being sent by the leading economic data…

The Conference Board’s Leading Economic Index has declined for the fourth straight month and is now on the brink of giving multiple recessionary warning flags…

Builder Confidence from the National Association of Home Builders (NAHB) cratered in July as unprecedented affordability challenges weigh on homebuyer demand…

Jobless claims have surged to an 8-month high as another recessionary warning flag emerges…

Consumers’ outlook for the future continues to deteriorate as inflation expectations surge to new highs – is inflationary psychology is becoming ingrained in the minds of consumers?…

The Conference Board’s Leading Economic Index (LEI) has fallen for the third straight month and is suggesting that an economic slowdown and possible recession may be in store for the U.S. economy.

The ISM Services Index has fallen to the lowest level since May 2020, but the fact that it remains in expansion territory will pressure the Fed to continue tightening in the months ahead.

As Consumer Sentiment becomes more and more depressed, the U.S. economy is in a vulnerable position with spending beginning to soften…

NAHB Traffic of Prospective Buyers fell by the second-largest amount on record in May, indicating that the housing market is now skating on thin ice…

Inflation ticked lower in April, but its persistence surprised many and is likely to keep the Fed tightening monetary policy in the months ahead.

[Updated May 9] Earlier this year, we began tracking 10 of the leading crypto mining stocks to warn of a potential loss of exuberance surrounding the crypto-mania…

While the ISM surveys remain at historically strong levels, the combination of high prices and falling demand could weigh on companies in the months to come…

Consumer Sentiment rebounded in April after suffering its second worst 11-month skid in history… however, one important component has reached its most worrisome level in over 40 years.

The Conference Board’s Leading Economic Index (LEI) gained 0.3% in March, indicating that economic growth is likely to continue in the months ahead…

Traffic of Prospective Buyers from the National Association of Home Builders (NAHB) fell for the fourth straight month after this month’s six point decline.

Margin debt has joined the ranks of emerging warning flags after falling significantly in March.

The ISM Services Index increased by 1.8 points to a reading of 58.3 in March, its first gain in four months.

The ISM Manufacturing Index fell to an 18-month low in March, due largely to new orders falling by the fastest clip since the COVID-19 induced recession in early 2020.

Personal Consumption Expenditures (PCE) climbed to +6.4% in February, its 15th straight monthly gain which ties the prior record set in 1980.

The Leading Economic Index (LEI) from the Conference Board edged higher by 0.2% in February, yet the gain was not enough to offset half of the prior month’s -0.5% loss.

The overall Consumer Price Index (CPI) jumped +0.4% to +7.9% in February, the highest reading since January 1982.

The Small Business Optimism Index from the National Federation of Independent Business unexpectedly fell to the lowest level in over a year as surging inflation and labor shortages continue to be headwinds.

The ISM Services Index dropped to a reading of 56.5 in February versus economists’ expectations for an increase to 60.9.

The ISM Manufacturing Index jumped by one point and remains at an historically strong reading of 58.6 after having contracted for the previous three months.

Our Housing [Bubble] Bellwether Barometer has broken under its initial support level as mortgage rates have spiked to 3.9%.

The Leading Economic Index (LEI) from the Conference Board fell by -0.3% in January, notably lower than economists’ expectations for a +0.3% increase.

Consumer Sentiment from the University of Michigan unexpectedly cratered to an 11-year low in February as inflation continues to weigh heavily on the consumer.

The ISM Services Index declined to start 2022, as persistent labor and supply chain shortages weighed on the measure.

The ISM Manufacturing Index continued to moderate in January, as its third consecutive decline brought it down to a 16-month low.

Consumer Sentiment from the University of Michigan fell further below its pandemic lows this month as inflation concerns continue to mount.

The Conference Board’s Leading Economic Index (LEI) improved by 0.8% in the final reading of 2021, with only one of its ten components contributing negatively…

NAHB Builder Confidence declined by one point to a reading of 83, yet the measure is still at a very strong historical level.

The University of Michigan’s measure of Consumer Sentiment declined slightly in January’s preliminary reading to reach the second lowest level of the past decade.

Inflation as measured by the Consumer Price Index (CPI) climbed to +7.0% in December, the highest reading in nearly 40 years and a far cry from last December’s print of +1.4%.

NFIB Small Business Optimism gained just 0.5 points in December to remain at a relatively depressed reading of 98.9.

The ISM Manufacturing Index moved lower by 2.4 points in December, yet the Index remains at a historically strong reading of 58.7, as many of the supply/demand imbalances in the manufacturing sector began to normalize last month.

Consumer Sentiment from the University of Michigan improved by 3.2 points in the final reading of 2021, primarily because the outlook of low-income households jumped as they begin to realize the benefits of the ongoing labor shortage in the form of wage growth.

Personal Consumption Expenditures (PCE) rose to 5.7% in November, the highest reading in nearly 40 years.

The Conference Board’s Leading Economic Index (LEI) continued to move higher in November on broad strength.

The Producer Price Index (PPI) for Finished Goods continued to surge in November and has now increased by +13.6% from a year ago.

The Consumer Price Index surged to 6.8% in December, the highest level in nearly 40 years.

For the first time since the 2020 COVID-19 Crash, our Negative Leadership Composite (NLC) has started showing bearish Distribution.

The ISM Manufacturing Index ticked higher to a reading of 61.1 in November, keeping it at a historically strong reading.

Core Personal Consumption Expenditures (PCE), which excludes volatile food and energy prices, climbed even further beyond the Federal Reserve’s 2.0% inflation target in October.

Margin debt surged to new highs in October in a clear indication that speculation remains alive and well in the stock market.

After sliding for much of this year, NAHB Builder Confidence continues to rebound and remains above its pre-pandemic highs.

November’s preliminary reading of Consumer Sentiment fell further below its pandemic lows due to intensifying inflation fears.

The ISM Service Sector surged to the highest level in its 24-year history last month due to the combination of strong consumer demand and supply chain disruptions.

The ISM Manufacturing Index ticked down by 0.3 points in October to remain near one of the highest readings of the past 50 years.

Core Personal Consumption Expenditures (PCE), the preferred inflation measure of the Federal Reserve, climbed to 3.64% last month to remain at the highest level in over 30 years.

New home sales of 800,000 in September was notably higher than economists’ expectations and was the largest month-over-month increase since July of 2020.

Consumer Confidence rose modestly in October after having fallen for the four months prior, bolstered primarily by declining COVID-19 cases.

The Conference Board’s Leading Economic Index (LEI) increased to another record high in September, yet last month’s growth of 0.2% missed economists’ expectations and was the second slowest reading since last year’s COVID-induced recession.

The ISM Services Index exceeded economists’ expectations by ticking higher to a reading of 61.9 in September.

Core Personal Consumption Expenditures (PCE) –the Federal Reserve’s preferred inflation measure– edged up slightly to 3.62% from 3.60% for the month prior.

The Conference Board’s Leading Economic Index (LEI) exceeded economists’ expectations by jumping +0.9% in August.

NAHB Builder Confidence registered a warning flag last month after it fell sharply to a 13-month low, yet it managed to rebound by one point in September.

The NFIB Small Business Optimism Index increased by a meager 0.4 points in August (top graph) as small business owners continue to contend with both rising input costs and labor challenges.

The Producer Price Index (PPI) surged to an all-time high of 8.3% in its most recent reading, showing that supply/demand imbalances are persisting.

The ISM Manufacturing Index moved higher to a reading of 59.9% in August to remain near one of the highest levels of the past two decades.

Consumers became significantly more pessimistic in August due to a combination of persistent inflation pressures and fears over the Delta variant.

Core Personal Consumption Expenditures (PCE), which excludes volatile food and energy prices, rose for the fifth straight month to 3.62% versus the prior month’s unrevised reading of 3.5%.

The Leading Economic Index (LEI) from the Conference Board improved once again in July, taking the Index to another record high.

NAHB Builder Confidence (top graph below) sank to a 13-month low in August after suffering its fourth largest drop of the past decade.

NFIB Small Business Optimism Index unexpectedly declined by -2.8 points to a reading of 99.7 as economic expectations retreated in July.

The ISM Manufacturing Index declined by -1.1% to 59.5% in July, yet it remains at one of the highest levels of the past 30 years.

Core Personal Consumption Expenditures (PCE) –the preferred inflation measure of the Federal Reserve– climbed further beyond the central bank’s 2% inflation target to 3.5% last month.

The Leading Economic Index (LEI) from the Conference Board gained 0.7% last month on positive contributions from eight of its ten leading components.

Margin debt climbed in June for the eighth straight month as investors continue to borrow on margin to buy stocks.

Homebuilders became slightly less optimistic this month according to the National Association of Home Builders, yet their confidence remains higher than at any point prior to the COVID-19 pandemic.

The National Bureau of Economic Research (NBER) has officially announced that the pandemic-induced recession has ended.

Small businesses became more optimistic last month as the economic recovery continued to gain momentum.

The core Consumer Price Index (CPI), which excludes volatile food and energy prices, continued to surge in June.

The ISM Services Index fell to a reading of 60.1% in June, still firmly in expansion territory and just 3.9% below its record high from the month before.

The manufacturing sector stayed soundly in expansion territory in June, as the ISM Manufacturing Index registered a strong reading of 60.6.

Consumer Confidence from the Conference Board increased for the fifth consecutive month as pandemic woes continued to fade.

Inflation has emerged with a vengeance in recent months, and the FIBER Leading Inflation Index (LII) suggests that that pricing pressures are continuing to mount.

Consumer optimism has been held down by the pandemic over the past year, but attitudes have started to improve as COVID-19 disruptions begin to fade.