3 Aug 2023
Do US cyclical equities look vulnerable given the extent of growth optimism currently priced in vs. the weakness of ISM manufacturing?
Source chart: Goldman
3 Aug 2023
Despite the strong upward move of the Citigroup US economic Surprises index and the strong YTD performance of financial assets, there are signs that things are that rosy for the SU economy
Source: TaviCosta
3 Aug 2023
The average interest rate on US credit card balances has spiked to 20.7%
With data going back to 1994, that's the highest rate we've ever seen. Meanwhile, delinquency rates on credit card loans from small lenders are now at an all time high of 7.1%. That's above the 6.0% peak in 2008 and up sharply from 3.8% in 2020. Source: Charlie Bilello, The Kobeissi Letter
3 Aug 2023
US interest expenses have surged by about 50% in the past year, to nearly $1 trillion on an annualized basis
Source: Lisa Ambramowicz, Bloomberg
3 Aug 2023
Note that US Sovereign risk (aka CDS on 1-year US Treasury) was completely unmoved by the Fitch downgrade.
Source: Bloomberg, www.zerohedge.com
3 Aug 2023
Treasuries haven’t been this ineffective as a stock hedge since the 1990s. The one-month correlation between the two assets is now at its highest reading since 1996
Source: Lisa Abramowicz, Bloomberg
3 Aug 2023
Who is left in the AAA club? (the US is now split-rated AA+)
Source: Jim Bianco, Bloomberg
3 Aug 2023
The survivorship bias
It is a sample bias that occurs when we assess only successful outcomes and disregard failures. See below example with strikes on returning and non-returning planes during WWII Source: Mnke Daniel
