Free Republic

In a surprising move, the Federal Reserve is hinting at multiple rate cuts in 2024, sparking questions about the stability of the financial system. This decision has historical echoes, as every major rate cut since the 1970s has been followed by a substantial 30% drawdown in the S&P 500. For the first time in recent history, Chair Powell’s alignment with market expectations signals a potential departure from the usual cautious stance. The market has responded positively, with the S&P 500 on track for its 9th green day out of the last 10, reflecting investor confidence in the Federal Reserve’s promises.

As inflation continues to take a toll on consumers’ wallets, a surprising sentiment is emerging – more than a third of consumers, including new homeowners, are willing to embrace a recession if it brings down soaring prices. This sentiment is revealed in a recent survey conducted by Morning Consult, shedding light on the frustrations of individuals grappling with the impact of prolonged inflation. With prices on the rise for various goods and services due to inflationary pressures, consumers are becoming increasingly frustrated. The Morning Consult survey indicates that a significant portion, 37%, expressed their willingness to endure a recession if...

Yes, its beginning to look a lot like a recession! After ADP has printed lower than BLS for the last two months… Source: Bloomberg …expectations were for a small tick higher in November (from 113k to +130k), despite the ugly JOLTS print. However, ADP reported just 103k jobs added (and October revised down to 106k)… Source: Bloomberg Manufacturing saw the biggest job losses but Leisure and Hospitality lost jobs for the first time since Feb 2021… ADP’s Chief Economist Nela Richardson notes that: “Restaurants and hotels were the biggest job creators during the post-pandemic recovery. But that boost is behind...

If, and when, a recession ever occurs again in any of our lifetimes - certainly not in the golden age of Bidonomics, pain will be felt disproportionately as usual.Sectors which fare better will typically exhibit;Less cyclical exposureLower rate sensitivityHigher cash levelsLower capital expendituresAs such, Visual Capitalist's Dorothy Neufeld takes a look at the sectors most resilient to recession risk and rising costs, using data from Allianz Trade. Recession Risk, by SectorAs slower growth and rising rates put pressure on corporate margins and the cost of capital, we can see in the table below that this has impacted some sectors more...

The US housing and mortgage markets are thunderstruck by The Fed’s attempts are cooling inflation down to 2%. After a small bounce last month – following the puke in August – pending home sales dropped 1.5% MoM in October (better than the 2.0% MoM decline expected). This left YoY sales down 6.6% (negative for the 23rd straight month)… The Pending Home Sales Index dropped back to a new record low… By region, only the Northeast saw an increase in pending sales last month. Sales fell the most in the West, down 6%, while contract signings in the South and Midwest...

During an interview with NBC News on Wednesday, Sen. Joe Manchin (D-WV) argued that if the Build Back Better legislation President Joe Biden and Senate Democrats pushed had passed the way it was “it would have basically thrown us into a recession, if not a deep depression.” “Meet the Press” host Kristen Welker asked, “Let’s talk about some of the legislation that you and the President and the Congress passed. The Inflation Reduction Act, the bipartisan infrastructure law, CHIPS, the gun safety law, do you feel…like you have a role in helping the President talk about some of this bipartisan...

The household survey shows employment collapsed by 348K, the biggest drop since the Covid shutdown. As usual, historical data was revised massively lower, with the jobs change for August revised down by 62,000, from +227,000 to +165,000, and the change for September was revised down by 39,000, from +336,000 to +297,000. With these revisions, employment in August and September combined is 101,000 lower than previously reported. In total, 8 of the past 8 months have been revised sharply lower in what only idiots can not see is clearly mandated political propaganda designed to make the economy look stronger at first...

JOHNSTOWN, Pennsylvania — Two months ago, 30,000 truckers at Yellow lost their jobs when one of the nation’s oldest and largest trucking companies filed for Chapter 11 bankruptcy protection. Last week, Convoy, the digital freight broker that was supposed to reinvent the wheel and disrupt the trucking industry in a positive way, also abruptly shuttered its doors. These kinds of closings by both freight carriers lay bare the uncertain state of trucking, an industry that is an indicator of the mood of the consumer and also the beating heart of our economy. “In my opinion, this industry is heading in...

Biden’s Highway to Hell! Bidenomics has been a massive windfall for the top 1% of households in terms of wealth due to the emphasis on green energy transformation. But for the 99%, Bidenomics has been a disaster (unless you consider low-paying job creation a victory). The auto sector, considered a leading economic indicator, pinpoints the arrival of the crushing auto loan crisis and even the possibility of the onset of the next recession. In late January, we Fitch revealed tat consumers are falling behind on auto payments – the most since the peak of the Great Financial Crisis. Fast forward...

*The US economy is lurching toward a recession, according to Jeff Gundlach. *The DoubleLine Capital chief pointed to a "de-inverted" bond-yield curve and the rising unemployment rate as signs of a looming slump. *Layoffs are coming," he warned. The US economy is clearly headed toward a recession, veteran bond investor Jeff Gundlach has warned. The DoubleLine Capital CEO said Wednesday that the yield curve – a bond-market gauge that measures the gap between 2-year and 10-year Treasury yields – is signaling that a downturn is coming. "The shape of the yield curve is extremely unstable at this time," Gundlach told...

"You can't have a recession if everyone has a job and everyone is spending money," I told the audience in Las Vegas. We hosted our annual Stansberry Conference last month. And I had the honor of sharing my most up-to-date thoughts on the markets and the economy. Everyone is still on edge, waiting for a recession to take hold in the U.S. Many of our analysts at Stansberry Research are exploring the possibility, too. It's good to be prepared. But you shouldn't lose sleep over this fear. The reason why is as simple as what I said in Vegas... Consumer...

Back in red? As US fiscal policy deteriorates further thanks to endless Federal spending (not to mention seemingly endless wars under Biden and Nobel Peace Prize winner Obama), we are seeing pain in the bank lending business. Commercial and industrial (C&I) loan lending standards is tightening (blue line) to levels typically seen in recessions. Even though Barclays HY-10Y spreads remains low. Bank credit growth remains negative for the twelve straight week. Under Biden/Yellen’s economic model, the appropriate themesong is “Hell’s Bells.”

We will attempt to look at an entire job class today, so there are going to be some unavoidable generalizations. Even so, certain truths do apply across the board, whether we like admitting to them or not. Some of us love the self checkout line at the grocery store. We don’t slow down the other people in line; we can pack our own bags the way we want to, and as long as we can get the discount programs to work and the pricing is right, it can be a nice change to brighten our day. But most of us...

The Empire Strikes Out! Or “The March of Klaus Schwab and The World Economic Forum” According to the New York Federal Reserve, business activity edged lower in New York State, according to firms responding to the October 2023 Empire State Manufacturing Survey. The headline general business conditions index fell seven points to -4.6. New orders fell slightly, while shipments were little changed. Unfilled orders declined, and delivery times shortened. Inventories held steady. Labor market indicators pointed to a slight increase in both employment and the average workweek. The pace of input price increases was similar to last month, while selling...

Consumer confidence, as measured by the IBD/TIPP Index, dropped to 36.3 in October, the lowest since 2011 The Six-Month Economic Outlook component reached an all-time low of 28.7, signaling a bleak outlook Low confidence stems from factors like high inflation (16.7% since Biden took office), stagnant wages, expensive gas, student loans, and concerns about government spending The Federal Reserve's actions to combat inflation and stock market volatility contribute to the gloomy outlook Worries persist about the Russia-Ukraine conflict and the possibility of an economic recession Only 25% of Americans approve of President Biden's handling of the economyThe IBD/TIPP Economic Optimism...

The nation's employers added 336,000 jobs in September, an unexpectedly robust gain that suggests that many companies remain confident enough to keep hiring despite high interest rates and a hazy outlook for the economy. Friday's report from the Labor Department showed that hiring last month jumped from a 227,000 increase in August, which was revised sharply higher. July's hiring was also healthier than initially estimated. The economy has now added a healthy average of 266,000 jobs a month in the past three months. The unemployment rate was unchanged at 3.8%. The job market has defied an array of threats this...

For all the over-the-top media bluster over how hunky-dory President Joe Biden’s decrepit economy supposedly is, Bloomberg News decided to red-pill itself: The prospect of a recession still threatens America. “Why a US Recession Is Still Likely — and Coming Soon,” read Bloomberg News’s Oct. 1 headline. The bottom line, reported the liberal outlet, is that “history, and data, suggest the consensus has gotten a little too complacent — just as it did before every US downturn of the past four decades.” Bloomberg News ripped the recycled propaganda that somehow the U.S. was poised for a “soft-landing” from its tumultuous...

On a recent trip to the grocery store, I picked up a half gallon of orange juice. Only, it wasn’t a half gallon. Hasn’t been a half gallon in years. I still call it that, but it’s only 52 ounces. Sometime in the past twenty years, the old half gallon of orange juice – 64 ounces – gradually started to shrink. Now they sell a 52 ounce bottle or carton. At first, it was just one brand, then two, then all of them. And while I haven’t made a careful study of it over the years, once they all standardized...

The warning signs are becoming more pronounced, and it appears that a recession may be looming closer than expected. Tightening liquidity is often a precursor to economic downturns. This is evident in the increasing number of companies closing their doors and factories declaring bankruptcy. These are clear indicators of economic distress that should not be underestimated. There’s been a noticeable shift in the flow of money out of the economy. This monetary exodus is putting additional strain on an already fragile economic situation, heightening concerns among experts. Adding to the complexity is the Employee Retention Credit (ERC) program, which appears...

US home building sank in August, dropping 11.3% from July levels, as mortgage rates stayed elevated amid lingering inflation. Housing starts, a measure of new-home construction, dropped to a seasonally adjusted annual rate of 1.283 million last month, well below expectations of 1.44 million, according to data released Tuesday by the Census Bureau. It was the lowest level since June 2020. The number of units started was 14.8% lower than a year ago. Single‐family housing starts, which account for most of the construction, dropped 4.3% in August from the revised July figure, at a seasonally adjusted annual rate of 941,000....