The organization, which in the US says whether the economy is in recession or not, seems to be falling asleep at work.
The National Bureau of Economic Research defines a recession as the period between a peak of economic activity and its subsequent depression, or the lowest point. There is no debate that the NBER was right when it resorted to the last peak cycle in February 2020, but the bottom line was, if you look at unemployment claims, in late April and not later than May, if you look at employment or personal income.
Employment and personal income are well above the threshold.
For markets, it is significant when the economy is expanding or in recession. According to research by Deutsche Bank, growth, as measured by the Institute of Supply Management’s manufacturing index, typically rises between 10 and 11 months after the recession ends. It would be right now if you go by the definition of recession by the NBER and not by its stubborn refusal to say so.
For the past 20 years, there has been a 73% correlation between the annual, rolling earnings of the S&P 500 SPX,
and the level of the ISM manufacturing index. This makes sense – you would expect growth assets, such as stocks, to be correlated with growth measures.
According to Deutsche Bank figures, the S&P 500 sold around the growth peaks with a median of 8.4% and decreased by an average of 5.9% when ISM flattened instead of declining. And the timing of these drops was soon from the peak – usually two weeks later, lasting six weeks in total.
So when that peak comes, it’s important. And Deutsche Bank says it will come in the next three months – not a huge shock, given that the March reading was 64.8%, a maximum of 38 years.
“As growth increases over the next three months, we expect discretionary investors to position their positions at extremely high levels and see retail investors as unlikely to buy the decline. The use of historical experience as a guide supports a withdrawal of almost -6% if the growth flattens near the peak, a withdrawal of more than -8.4% to an increase of the inverted V “, said strategies led by Binky Chadha.
However, from there, the shares may increase, they say. And the key in late summer and fall will be whether inflation sustains or accelerates and how the Federal Reserve reacts.
Minutes fed on deck
The minutes of the Fed’s latest interest rate decision will be released at 2:00 p.m. Markets will focus on any discussion about when to slow down bond purchases and how “substantial further progress” is defined toward maximum employment and price stability targets – the condition for reducing Fed content.
Jeff Bezos, CEO of online retail giant Amazon AMZN,
supports an increase in corporate taxes to pay for increased infrastructure spending, The Wall Street Journal reported, citing a company note. JPMorgan Chase JPM,
President and CEO Jamie Dimon used his annual letter to advocate for stricter regulation of non-bank competitors, as he called for the elimination of tax exemptions and said higher taxes on the rich would be justified.
Cruise operators, including Carnival CCL,
and Norwegian Cruise Line Holdings NCLH,
extended Tuesday’s gains in premarket trading based on optimism about when bookings could continue. Irish discount airline Ryanair Holdings RYAAY,
stated that European travel restrictions would mean passenger traffic at the lower end of its line.
Industrial conglomerate Toshiba 6502,
jumped into trade with Tokyo after receiving a proposal to be bought by CVC Capital Partners in what would be one of the largest private equity transactions of all time if completed. Singapore Grab’s food delivery and payment service is set for a $ 35 billion valuation in a deal to be acquired by Altimeter Capital’s Altimeter Growth 1 AGC,
special purpose procurement company, according to the Financial Times.
Some DoorDash DASH,
workers are trying to identify the algorithm to provide jobs at higher prices, according to Bloomberg News.
Sign up for the MarketWatch Investing in Crypto event.
10-year facilitation
10-year Treasury yield TMUBMUSD10Y,
fell last week to 1.66% on Wednesday.
US ES00 futures,
NQ00,
they were a little moved.
People no longer drive the microchip application
Manufacturer of microchip equipment Applied materials AMAT,
On Tuesday, he outlined his vision for the next few years, targeting $ 8.50-a-share revenue from $ 26.7 billion in sales in 2024. While the market has not responded warmly, one of its charts sets the demand for microchips – determined by algorithms, not human consumption.
Random readings
The owner of the largest cryptocurrency exchange in the world has no car and no house.
Do you sing in the alien rain? Extraterrestrial droplets are like rain on Earth.
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