Billionaire investor Ray Dalio is watching closely the “risky” U.S. fiscal situation
“We’re going to have a debt crisis in this country (...) How fast it transpires, I think, is going to be a function of that supply-demand issue, so I’m watching that very closely.” Dalio is concerned there are more headwinds for the economy than just high debt levels, saying growth could fall to zero, give or take 1% or 2%. “I think you’re going to get a meaningful slowing of the economy,” Dalio said. Source: CNBC
As highlighted in a tweet by HolgerZ, the S&P 500 is running in tandem with the Fed net liquidity
So it's not so much the peak or pause in rate hikes that matters, but rather what happens to the Fed balance sheet & reverse repo operations. Source: HolgerZ, Bloomberg
Consumer balance sheets are getting stretched
Accumulating debt during a low interest rates environment is one thing. But in light of the continuous surge of the price of money, the US consumer is probably starting to feel the pain Source: Crescat Capital, Bloomberg
The gap between oil and 10 year breakevens is huge...
Does it mean that the market sees higher oil prices as a "growth killer" and thus disinflationary at some stage? Source chart: TME, Refinitiv
“Soft Landing” is still the consensus. But consensus doesn’t have a good track record...
Source: Game of Tardes
Housing | According to Bankrate.com‘s data, US 30-Year fixed-rate mortgage reached 7.78%, the highest rate since August 2000
*This situation is expected to have a significant effect on closed sales from September to November. Source: C.Barraud
World trade volumes fell at their fastest annual pace for almost three years in July
Closely watched figures signal rising interest rates are beginning to impact global demand for goods. Trade volumes were down 3.2 per cent in July compared with the same month last year, the steepest drop since the early months of the coronavirus pandemic in August 2020. The latest World Trade Monitor figure, published by the Netherlands Bureau for Economic Policy Analysis, or CPB, followed a 2.4 per cent contraction in June and added to evidence that global growth was slowing. After booming during the pandemic, demand for global goods exports has weakened on the back of higher inflation, bumper rate rises by the world’s central banks in 2022, and more spending on domestic services as economies reopened following lockdowns. The about-turn in export volumes was broad based, with most of the world reporting falling trade volumes in July. China, the world’s largest goods exporter, posted a 1.5 per cent annual fall, the eurozone a 2.5 per cent contraction, and the US a 0.6 per cent decrease. Source: FT
This chart explains by itself why the market mood has been deteriorating over the last few weeks:
Growth forecasts moving down / world inflation going up. What else? Source: www.zerohedge.com, Bloomberg
