Recent updates highlight several key economic situations and market conditions:
- China’s foreign minister raises concerns about potential conflict with the US.
- Exports from China declined by 2.8% in the first two months of the year compared to the previous year.
- Debt ceiling issues are causing concern for the US economy, especially in a Senate panel discussion today.
- Federal Reserve Chair Jerome Powell is set to testify before Congress today regarding the economic outlook.
- The NY Fed reports that US supply chains have returned to normal levels as of February, indicating stability.
- Meta has announced plans for additional job cuts following previous layoffs.
- US factory orders have shown a continued deceleration in January based on year-over-year trends:
Last week showcased a noticeable rebound in major asset classes as they recovered from widespread declines observed in February, highlighting resilience in the financial markets.
Key points from the latest economic reports include:
- The Fed has submitted a report to Congress stating that further rate hikes are necessary to manage inflation.
- China has established its lowest economic growth target, around 5%, in decades due to prevailing challenges.
- Base metal prices are generally declining following China’s modest growth forecast.
- A seasoned emerging markets investor expressed challenges in accessing funds in China.
- The US housing market is facing increased challenges as the key spring selling season approaches.
- The growth in the US services sector remains stable according to recent survey data.
- Former Fed Vice Chair Alan Blinder predicts that the Fed will not raise rates to 6%, though…
- San Francisco Fed President Mary Daly suggests tighter policy may be necessary for a longer duration.
- The US Treasury yield curve remains significantly inverted due to the implementation of a hawkish Fed policy:
by Kathleen McLaughlin
Summary via publisher (Simon & Schuster)
Kathleen McLaughlin details her decade-long investigation into a treatment that effectively managed her rare autoimmune disorder, unaware that its source came from the most vulnerable populations in America. Her findings unveil a $20 billion industry profiting from the hardships of single mothers, college students, and laid-off auto workers, as agencies target individuals along the US-Mexico border willing to sell their plasma for minimal compensation.
The state of US economic activity presents a complex picture, with contrasting data influencing narratives about growth. There are always sectors that defy prevailing trends, but the current conflicting data is particularly pronounced.
Upcoming meetings and economic indicators this week include:
- German Chancellor Olaf Scholz is scheduled to meet with President Biden at the White House on Friday.
- The positive global economic data suggests that central bankers may need to further raise rates.
- Business activity in China’s services sector saw a significant increase in February.
- In the Eurozone, business activity rebounded at its fastest pace since June 2022.
- The entire US Treasury yield curve is above 4% for the first time.
- The average mortgage rate for a US 30-year loan exceeds 7% again.
- Claims for unemployment benefits in the US surprised on the downside, demonstrating the resilience of the labor market:
The Global Market Index (GMI) maintained an expected long-term performance of 6.0% annualized in February, as reported in their latest update, which is consistent with last month. This estimate is slightly lower than the trailing ten-year return for GMI, representing an unmanaged, market-value-weighted portfolio of all major asset classes, excluding cash.
The US 10-Year Treasury yield has risen above 4% for the first time since November.
- Mortgage applications in the US have fallen to a 28-year low as interest rates increase.
- Global manufacturing output has increased in February after six months of decline.
- Eurozone inflation eased to 8.5% in February but remains elevated.
- Economists anticipate stronger economic growth in China in 2023.
- US construction spending unexpectedly declined in January.
- The ISM Manufacturing Index rose slightly in February, yet it still indicates contraction.
After a strong start to the year, global markets faced a setback in February, registering broad losses across various asset classes.
Despite heightened tensions, a US Treasury official is visiting Beijing.
- China’s manufacturing sentiment has improved, marking the strongest growth since 2012.
- Euro area manufacturing output stabilized in February according to PMI reports.
- US home prices have decreased for the sixth consecutive month.
- Chicago PMI indicates ongoing weakness in business activity as of February.
- Consumer confidence in the US has dipped again in February:
