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24 May 2024

Wall Street pull-back yesterday is mainly explained by the PMI data.

And not because they show that the US economy remians resilient. The biggest concern was the prices print as it shows that more cost increases are coming for companies and consumers alike: - Input prices continued to rise sharply in May, the rate of inflation accelerating to register the second-largest monthly increase seen over the past eight months. - Manufacturers reported an especially steep increase, suffering the largest cost rise for one-and-a-half years amid reports of higher supplier prices for a wide variety of inputs, including metals, chemicals, plastics, and timber- based products, as well as higher energy and labor costs. - Service sector costs also rose at an increased rate, reflecting higher staffing costs in particular. - Companies again sought to pass higher costs onto customers in the form of higher selling prices, the rate of increase of which accelerated slightly compared to April. One good news though: although still elevated by pre-pandemic standards, the rate of inflation across both goods and services remained below the average recorded over the past year. Source: S&P Global, Markets & Mayhem

24 May 2024

Jamie Dimon does not rule out a hard landing for the US economy

Source: CNBC

23 May 2024

BREAKING: TANGIBLE SIGN OF US CONSUMER WEAKNESS?

Target stock, $TGT, falls 8% after reporting weaker than expected earnings with a 3% revenue decline due to consumer weakness. Target's CEO said the decline reflects “continued soft trends in discretionary categories.” The company's store traffic fell by 1.9% less quarter and the average amount spent by customer also fell 1.9%. Consumers bought fewer everyday items like groceries along with fewer discretionary goods. Another sign that consumers are struggling. Source: The Kobeissi Letter

23 May 2024

The implications of an aging population for investment strategies

Source: Bloomberg

22 May 2024

While the FED monetary policy is seen as restrictive, the Bloomberg US Financial Conditions Index is at record highs.

Risk premia in stocks and credit are near all-time tights as commodities are breaking higher. Source: Bloomberg

22 May 2024

China may well be the world leader for de-risking trade ties

• Chinese firms have been developing ties with emerging markets over past ten years • This reduces China's reliance on unfriendly markets (🇺🇸🇪🇺), shielding Beijing from geopolitical tensions Source: FT, Agathe Demarais

21 May 2024

Deflationary forces are intensifying again in germany.

Producer prices fell by 3.3% YoY in April. In March, the decline was 2.9%. PPI is a good leading indicator for CPI. Source: Bloomberg, HolgerZ

21 May 2024

The cost of servicing US government debt is on course to surpass defense spending

Source: Bloomberg, Michael McDonough

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