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<p>The current economic landscape is surprising, to say the least. While the US Leading Economic Index (LEI) has been consistently indicating a potential recession for over a year, the economy refuses to contract and continues to grow. This situation serves as a valuable lesson in economic forecasting, illustrating that no recession indicator is infallible.</p>
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By James Picerno | <a href="https://www.capitalspectator.com/the-us-leading-economic-index-takes-one-for-the-team/" title="7:25 am" rel="bookmark"><time class="entry-date" datetime="2024-02-22T07:25:44-05:00">February 22, 2024</time></a>
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<p>* Fed officials <a href="https://apnews.com/article/federal-reserve-inflation-prices-interest-rates-cuts-f32ea3b865a00ec4b4516112b07dbb5d">express concern</a> about slowing inflation progress, as noted in recent minutes.<br />* The Eurozone downturn eases even as price pressures mount, according to a <a href="https://www.pmi.spglobal.com/Public/Home/PressRelease/0cc1e87a13544d93b96af49c670b5f72">PMI survey</a> in February.<br />* China’s initiatives to develop AI technology <a href="https://www.nytimes.com/2024/02/21/technology/china-united-states-artificial-intelligence.html">depend</a> heavily on American innovations.<br />* Japanese stocks <a href="https://www.cnn.com/2024/02/22/business/japan-nikkei-225-record-high-intl-hnk/index.html">reach a record high,</a> surpassing levels not seen since 1989.<br />* Nvidia's strong earnings report <a href="https://finance.yahoo.com/news/bubble-nvidia-profits-rising-even-092150682.html">enhances the outlook</a> for artificial intelligence.<br />* The US 10-year Treasury yield rises to its highest point since December 1:</p>
<p><a href="https://www.capitalspectator.com/wp-content/uploads/2024/02/tenyr.22feb2024.png"><img fetchpriority="high" decoding="async" class="alignnone size-full wp-image-21662" src="https://www.capitalspectator.com/wp-content/uploads/2024/02/tenyr.22feb2024.png" alt="" width="700" height="312" /></a></p>
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By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-22-february-2024/" title="6:33 am" rel="bookmark"><time class="entry-date" datetime="2024-02-22T06:33:09-05:00">February 22, 2024</time></a>
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<p>Latest inflation data suggests a persistent trend <a href="https://www.bloomberg.com/news/articles/2024-02-13/us-core-cpi-rises-most-in-eight-months-as-inflation-persists">persisting,</a> yet the markets have merely postponed rather than abandoned their expectations for the Federal Reserve to lower interest rates soon. Some analysts argue against this trajectory, citing forecasts suggesting that the Fed may maintain higher rates for a more extended period. However, current market estimates continue to imply a forthcoming easing in monetary policy.</p>
<p><a href="https://www.capitalspectator.com/markets-continue-to-price-in-path-for-rate-cuts-in-2024/#more-21657" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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By James Picerno | <a href="https://www.capitalspectator.com/markets-continue-to-price-in-path-for-rate-cuts-in-2024/" title="7:43 am" rel="bookmark"><time class="entry-date" datetime="2024-02-21T07:43:04-05:00">February 21, 2024</time></a>
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<p>* The Conference Board <a href="https://www.usnews.com/news/economy/articles/2024-02-20/leading-economic-indicators-no-longer-forecasting-a-recession">abandoned</a> its longstanding prediction of a US recession.<br />* The share of disposable income spent on food by US consumers <a href="https://www.wsj.com/economy/consumers/its-been-30-years-since-food-ate-up-this-much-of-your-income-2e3dd3ed?mod=hp_lead_pos8">rises</a> to a 30-year high.<br />* China’s economic downturn <a href="https://www.cnn.com/2024/02/21/investing/hsbc-annual-results-2023-china-impact-intl-hnk/index.html">burdens</a> global banking systems.<br />* Vietnam is projected to experience the sharpest rise in wealth globally, according to consultancy forecasts.<br />* America’s commercial casinos <a href="https://abcnews.go.com/US/wireStory/us-casinos-won-665b-2023-best-year-gamblers-107373117">report</a> record revenue for 2023.<br />* Hedge funds <a href="https://finance.yahoo.com/news/hedge-funds-cut-magnificent-seven-045709586.html">reduced their stakes</a> in Magnificent Seven tech stocks during Q4.<br />* The US Leading Economic Index <a href="https://www.conference-board.org/topics/us-leading-indicators">“continues to indicate challenges”</a> in January:</p>
<p><a href="https://www.capitalspectator.com/wp-content/uploads/2024/02/lei.21feb2024.png"><img decoding="async" class="alignnone size-full wp-image-21655" src="https://www.capitalspectator.com/wp-content/uploads/2024/02/lei.21feb2024.png" alt="" width="917" height="559" /></a></p>
<p><a href="https://www.capitalspectator.com/macro-briefing-21-february-2024/#more-21654" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-21-february-2024/" title="6:43 am" rel="bookmark"><time class="entry-date" datetime="2024-02-21T06:43:07-05:00">February 21, 2024</time></a>
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<p>When it comes to assessing and estimating the risk of recession, options are somewhat limited—though, not as scarce as one might think. Within the myriad of indicators available, the quest for reliable and robust measures significantly narrows down the choices. However, there’s always more to explore, especially considering the ever-expanding array of data sets. This brings us to a new and promising indicator: state coincident indexes.</p>
<p><a href="https://www.capitalspectator.com/estimating-us-recession-risk-using-economic-data-for-states/#more-21644" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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By James Picerno | <a href="https://www.capitalspectator.com/estimating-us-recession-risk-using-economic-data-for-states/" title="7:00 am" rel="bookmark"><time class="entry-date" datetime="2024-02-20T07:00:31-05:00">February 20, 2024</time></a>
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<p>* Delinquent commercial property loans <a href="https://www.ft.com/content/4114454c-a924-4929-85f4-5360b2b871c6">surpass</a> reserves at major US banks.<br />* The surge in EV battery metals shows signs of <a href="https://www.wsj.com/finance/commodities-futures/the-boom-in-battery-metals-for-evs-is-turning-to-bust-5630493c">tapering off,</a> signaling potential issues ahead.<br />* Chinese banks <a href="https://www.wsj.com/economy/central-banking/chinas-longer-term-benchmark-lending-rate-lowered-28630a63">decrease key interest rates</a> as their economy falters.<br />* Germany is likely entering a recession, <a href="https://www.ft.com/content/54e674e0-0210-49f9-ba5b-8187b9b86064">according to</a> insights from the country’s central bank.<br />* Capital One <a href="https://apnews.com/article/capital-one-discover-financial-merger-credit-cards-3444782717e668b896883f09bda27baa">is set to acquire</a> Discover, merging two of the largest credit card companies.<br />* SoftBank’s Masayoshi Son aims to <a href="https://techcrunch.com/2024/02/19/softbanks-masayoshi-son-is-reportedly-seeking-100b-to-build-a-new-ai-chip-venture/">raise $100 billion</a> for a new AI chip initiative.<br />* Goldman Sachs <a href="https://www.reuters.com/markets/us/goldman-sachs-lifts-2024-sp-500-target-5200-upbeat-profit-outlook-2024-02-19/">raises</a> its 2024 S&P 500 target to 5,200, citing positive profit forecasts:</p>
<p><a href="https://www.capitalspectator.com/wp-content/uploads/2024/02/sp500.20feb2024.png"><img decoding="async" class="alignnone size-full wp-image-21651" src="https://www.capitalspectator.com/wp-content/uploads/2024/02/sp500.20feb2024.png" alt="" width="700" height="312" /></a></p>
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By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-20-february-2024/" title="6:07 am" rel="bookmark"><time class="entry-date" datetime="2024-02-20T06:07:41-05:00">February 20, 2024</time></a>
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<p>* The debate over a 'soft landing' for the US economy <a href="https://www.ft.com/content/96dc71be-b795-47dc-a1cc-cccc7aa6a481">resurfaces</a> following recent reports.<br />* New indications <a href="https://www.wsj.com/business/energy-oil/americas-oil-power-might-be-near-its-peak-5d956a24?mod=hp_lead_pos1">suggest</a> that America’s shale oil boom may be waning.<br />* The US warns that it will <a href="https://www.ft.com/content/96dc71be-b795-47dc-a1cc-cccc7aa6a481">respond</a> if China floods global markets with goods.<br />* China <a href="https://www.cnn.com/2024/02/19/business/china-lunar-new-year-data-economy-intl-hnk/index.html">sees</a> a dramatic increase in travel, possibly indicating stronger economic growth.<br />* China’s central bank <a href="https://www.cnbc.com/2024/02/19/chinas-central-bank-leaves-key-policy-rate-unchanged-under-shadow-of-the-federal-reserve.html">keeps</a> its key policy rate stable.<br />* Regional banks face potential risks linked to commercial real estate loans <a href="https://www.newyorklifeinvestments.com/insights/gms-weekly-macro-pulse">according to recent analyses.</a><br />* US natural gas prices <a href="https://www.ft.com/content/08fa8ef9-8da9-49d0-97ab-3abbe5855d50">drop</a> due to unseasonably warm winter weather.<br />* Producer price inflation <a href="https://www.haver.com/articles/u-s-producer-prices-unexpectedly-strengthen-in-january">rose</a> more than anticipated in January:</p>
<p><a href="https://www.capitalspectator.com/wp-content/uploads/2024/02/ppi.19feb2024.png"><img loading="lazy" decoding="async" class="alignnone size-full wp-image-21640" src="https://www.capitalspectator.com/wp-content/uploads/2024/02/ppi.19feb2024.png" alt="" width="1208" height="906" /></a></p>
<p><a href="https://www.capitalspectator.com/macro-briefing-19-february-2024/#more-21639" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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By James Picerno | <a href="https://www.capitalspectator.com/macro-briefing-19-february-2024/" title="6:46 am" rel="bookmark"><time class="entry-date" datetime="2024-02-19T06:46:45-05:00">February 19, 2024</time></a>
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<p><a href="https://www.capitalspectator.com/wp-content/uploads/2024/02/goodbye.16feb2024.png"><img loading="lazy" decoding="async" class="wp-image-21635 alignleft" src="https://www.capitalspectator.com/wp-content/uploads/2024/02/goodbye.16feb2024.png" alt="" width="144" height="220" /></a>● <a href="https://amzn.to/3weCzf4">Goodbye Globalization: The Return of a Divided World</a><br />Elisabeth Braw<br /><strong><a href="https://yalebooks.yale.edu/book/9780300272277/goodbye-globalization/">Summary</a> via publisher (Yale U. Press)</strong><br />A bold examination of contemporary globalization and its potential decline—and the implications for the world economy. Following the Cold War, globalization accelerated rapidly, but recent shifts are altering that trajectory. Industry leaders and policymakers now recognize that globalization faces significant challenges, including fragile supply chains and geopolitical tensions. Elisabeth Braw assesses the risks of globalization's downfall and the complex issues it may pose for Western economies.</p>
<p><a href="https://www.capitalspectator.com/book-bits-17-february-2024/#more-21611" class="more-link">Continue reading <span class="meta-nav">→</span></a></p>
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By James Picerno | <a href="https://www.capitalspectator.com/book-bits-17-february-2024/" title="2:54 am" rel="bookmark"><time class="entry-date" datetime="2024-02-17T02:54:00-05:00">February 17, 2024</time></a>
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<p>Growth appears set to moderate in the upcoming first quarter, according to the median GDP nowcast analyzed by CapitalSpectator.com. Though recession risks remain minimal, a continued softening in output is anticipated for the second consecutive quarter.</p>
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By James Picerno | <a href="https://www.capitalspectator.com/moderate-slowdown-expected-for-us-q1-gdp-growth/" title="7:37 am" rel="bookmark"><time class="entry-date" datetime="2024-02-16T07:37:36-05:00">February 16, 2024</time></a>
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