Bottom-line: Vote is ongoing, The House has enough votes.
The House has enough votes to pass legislation that would suspend the debt limit through Jan. 1, 2025 to avert a US default.
The House has enough votes to pass legislation that would suspend the debt limit through Jan. 1, 2025 to avert a US default.
The benchmark US equity gauge inched up 0.2% as of 9:40 a.m. in New York, leaving it just shy of a 20% gain from its October low, the defining threshold for a bull market.
One More Thing.
Apple unveiled devices including a long-awaited $3,499 mixed-reality headset that will go on sale in the US in early 2024, and said it will partner with Disney for 3D content. It also rolled out a larger MacBook Air, new versions of its Mac Studio and Mac Pro desktops, and updated iPhone and iPad software. The stock hit an intraday record before the announcement but closed a tad lower.
Apple unveiled devices including a long-awaited $3,499 mixed-reality headset that will go on sale in the US in early 2024, and said it will partner with Disney for 3D content. It also rolled out a larger MacBook Air, new versions of its Mac Studio and Mac Pro desktops, and updated iPhone and iPad software. The stock hit an intraday record before the announcement but closed a tad lower.
Bottom-line: 얼핏 주식들이 과열에 진입한게 아닌가 생각될 수 있지만, 올해와 같이 양극화가 심한 시장에서는 포괄적인 주가지수보다 정확한 그림을 그려봄이 더 바람직할 것임. S&P 500 지수 내에서 가장 시가총액이 높은 5개 주식으로 구성한 지수를 만들고, 이를 과거로부터 현재까지 약세 시장의 성과로 비교해보면, 이들은 과열과 멀리 있단 사실을 알 수 있음. 이는 곧 시가총액 상위 주식이나 성장주를 대표하는 Nasdaq 100 지수의 초과 상승 여력이 남았단 의미와 같음.
The largest-market-cap stocks and the Nasdaq do not yet look historically overbought, meaning they may have more upside potential. With stocks like Nvidia reaching for the moon, it might seem plain as day that mega-cap stocks are overbought. While that is true using RSIs, stochastics, etc., it is not the case when you compare their behavior to previous bear markets. This has been a two-speed market this year. That’s why it makes more sense to look at the underlying picture rather than focusing solely on the broad index. In this vein, we can create a “Top 5” index of the largest S&P 500 stocks by market cap through time, and a residual index of the remaining stocks. We can then look at how these indexes have typically behaved in bear markets to get a better historical perspective. We can see in the chart below that far from being overbought, the Top 5 stocks are underperforming where they have normally been at this point in a bear market.
The largest-market-cap stocks and the Nasdaq do not yet look historically overbought, meaning they may have more upside potential. With stocks like Nvidia reaching for the moon, it might seem plain as day that mega-cap stocks are overbought. While that is true using RSIs, stochastics, etc., it is not the case when you compare their behavior to previous bear markets. This has been a two-speed market this year. That’s why it makes more sense to look at the underlying picture rather than focusing solely on the broad index. In this vein, we can create a “Top 5” index of the largest S&P 500 stocks by market cap through time, and a residual index of the remaining stocks. We can then look at how these indexes have typically behaved in bear markets to get a better historical perspective. We can see in the chart below that far from being overbought, the Top 5 stocks are underperforming where they have normally been at this point in a bear market.
Bottom-line: OECD가 세계 경제성장률이 바이러스 대확산 이후 좀처럼 회복되기 싶지 않다고 함. 이 전망은 세계은행에서 상당한 성장 둔화와 불안정한 상태에 경제가 직면해 있음을 경고한 바로 다음 날임. 바이러스 대확산 이전 7년간 연펑균 3.4% 성장했던 세계 경제는 올해 2.7%, 내년 2.9% 성장에 그치며 이전 궤도에 회복하기 어려우며, 여전한 물가를 통제하며 성장 동력을 회복시키려는 중앙은행을 힘들게 하고 있음. 다음 주 1980년대 이후 가장 빠르고 강한 긴축을 시행 중인 주요 중앙은행들이 금리인상을 멈출지, 더 이어갈 것인지 중요한 결정을 앞두고 있음.
The global economy is set for a weak recovery from the shocks of Covid and Russia’s war in Ukraine, dogged by persistent inflation and the restrictive policies of major central banks seeking to contain price pressures, the OECD said. The Paris-based organization’s latest Economic Outlook forecasts a 2.7% expansion of world output this year and only a modest pickup to 2.9% in 2024, both below the 3.4% average in the seven years before the pandemic. The US, the euro area and China will see the same relative sluggishness in their recoveries, while inflation will be stronger than in the period through 2019. The situation creates a particular headache for central banks as they must continue to react to core price pressures that are proving stronger than expected, while not overly hurting growth, the OECD said. The caution comes a day after the World Bank warned the global economy is in a precarious state and heading for a substantial growth slowdown later this year as interest-rate increases start to bite. Major monetary authorities face imminent decisions on whether to pause or pursue the fastest cycle of rate hikes since the 1980s, with both the Federal Reserve and the European Central Bank scheduled to meet next week.
The global economy is set for a weak recovery from the shocks of Covid and Russia’s war in Ukraine, dogged by persistent inflation and the restrictive policies of major central banks seeking to contain price pressures, the OECD said. The Paris-based organization’s latest Economic Outlook forecasts a 2.7% expansion of world output this year and only a modest pickup to 2.9% in 2024, both below the 3.4% average in the seven years before the pandemic. The US, the euro area and China will see the same relative sluggishness in their recoveries, while inflation will be stronger than in the period through 2019. The situation creates a particular headache for central banks as they must continue to react to core price pressures that are proving stronger than expected, while not overly hurting growth, the OECD said. The caution comes a day after the World Bank warned the global economy is in a precarious state and heading for a substantial growth slowdown later this year as interest-rate increases start to bite. Major monetary authorities face imminent decisions on whether to pause or pursue the fastest cycle of rate hikes since the 1980s, with both the Federal Reserve and the European Central Bank scheduled to meet next week.
Bottom-line: Mild Recession.
The euro area suffered the mildest possible recession during the winter after Russia’s war in Ukraine sent energy prices soaring.
The euro area suffered the mildest possible recession during the winter after Russia’s war in Ukraine sent energy prices soaring.
Docent: 미국 실업수당 청구건수가 예상을 상회하면서 이 지표에 대한 궁금증이 증가한 가운데, 모건스탠리가 이 지표에 대한 핵심 질문에 답하는 보고서를 발간함. i) 메사추세츠의 사례처럼 부정확한 데이터(실제 실업수당에 해당하지 않는 청구를 인식)에 의한 급증은 아니며, ii) 일반적으로 경기침체 39주를 앞두고 실업수당 청구건수가 증가하지만, 제조업 지표나 실업수당 지표 모두 항상 훌륭한 알람 역할을 하지는 못함. iii) 매 주 발표되는 실업수당 청구건수 사이의 변동폭은 25,000건 이내의 경우 무시할 수 있는 폭이며, 자동차 업종이나 교육 관련 업종의 경우 불규칙하거나 일시적인 일자리 끊김이 있어 계절성을 포착하기도 어렵다고 할 수 있음. iv) 실업률의 경우 노동통계국에서 집계하며, 일을 할 수 있어 구인 중이지만 실직 중인 모든 인원을 포함하지만, 실업수당 청구건수는 노동부에서 집계하며 실업 보험(UI)의 혜택을 받는 사람에 한함. 모두가 이 혜택을 신청하는 것도 아니며, 이 혜택에 해당되지 못하는 사람들도 많기 때문에 그 차이가 발생함. 평균적으로 1/3 정도의 실업자들만 이 혜택을 받을 수 있음. 그리고 처음으로 구직하는 사람도 포함되지 않음. 그러므로 앞으로는 실업률 보다는 실업수당 청구가 더 늘어날 것으로 예상하는 것이 옳음.
Jobless claims surprised to the upside this week, reaching the highest level since 2021. This week we review key questions related to this data series and recent prints. (1) Was the upward surprise a consequence of fraudulent claims? No, judging from the information we have so far, fraud does not seem to be the driver this time. Around a month ago, Massachusetts reported a steep increase in initial claims for some weeks that turned out to have been caused by fraudulent activity in the system and not actual individuals filing for benefits. A clear pattern caused by fraud is an increase in initial claims that is not followed by a boost in continuing claims (people renewing benefits on a weekly basis). Fraudulent initial claims get registered in the system automatically but are then dropped once fraud is verified. Unpaid fraudulent claims are not reflected in continuing claims data, which explains the disconnect between the two series. This is exactly what happened in Massachusetts. (2) Are initial claims a good predictor of a recession? Initial claims usually start rising 39 weeks prior to a recession, which is why the series is considered a leading indicator of economic activity. But the increase in initial claims is by no means a sufficient condition for a recession. As we pointed out in our Midyear Outlook, there have been false alarms in the past where both initial claims and ISM diffusion indexes pointed to recessions that never happened. (3) How relevant are weekly prints? They are simply too noisy to draw conclusions. The pre-Covid standard deviation of the change in weekly claims is around 15k, which means that weekly increases of 25k or less are statistically similar to zero. Moreover, volatility might increase in the coming summer months. Some auto plants often take temporary breaks, which might be at different dates depending on the year, making it hard to capture them through historical seasonal adjustments. (4) What's the link between claims and unemployment? Although both indicators highlight labor market slack, they measure different things. Unemployment comes from the Bureau of Labor Statistics (BLS) household survey, which aims to identify people out of work who actively looked for a job in the prior 4 weeks and are currently available for work. In turn, claims come from the Department of Labor, and basically count unemployed people who are receiving unemployment insurance (UI) benefits. Not all unemployed workers apply for benefits, and some are not even eligible. In fact, in ordinary times most workers don't receive UI benefits. UI does not cover people that voluntarily quit or first-time job seekers. And typically informal or undocumented workers are not eligible. Moreover, low-wage workers with intermittent hours often find it hard to reach the minimum amount of steady earnings needed to qualify for the benefits. The ratio between continuing claims and unemployed workers. On average, only a third of unemployed workers receive benefits. There was a clear jump during the pandemic because the government relaxed UI requirements, but it is evident that the ratio increases during slowdowns. Hence, we should perhaps expect more relevant upswings in claims than in unemployment ahead.
Jobless claims surprised to the upside this week, reaching the highest level since 2021. This week we review key questions related to this data series and recent prints. (1) Was the upward surprise a consequence of fraudulent claims? No, judging from the information we have so far, fraud does not seem to be the driver this time. Around a month ago, Massachusetts reported a steep increase in initial claims for some weeks that turned out to have been caused by fraudulent activity in the system and not actual individuals filing for benefits. A clear pattern caused by fraud is an increase in initial claims that is not followed by a boost in continuing claims (people renewing benefits on a weekly basis). Fraudulent initial claims get registered in the system automatically but are then dropped once fraud is verified. Unpaid fraudulent claims are not reflected in continuing claims data, which explains the disconnect between the two series. This is exactly what happened in Massachusetts. (2) Are initial claims a good predictor of a recession? Initial claims usually start rising 39 weeks prior to a recession, which is why the series is considered a leading indicator of economic activity. But the increase in initial claims is by no means a sufficient condition for a recession. As we pointed out in our Midyear Outlook, there have been false alarms in the past where both initial claims and ISM diffusion indexes pointed to recessions that never happened. (3) How relevant are weekly prints? They are simply too noisy to draw conclusions. The pre-Covid standard deviation of the change in weekly claims is around 15k, which means that weekly increases of 25k or less are statistically similar to zero. Moreover, volatility might increase in the coming summer months. Some auto plants often take temporary breaks, which might be at different dates depending on the year, making it hard to capture them through historical seasonal adjustments. (4) What's the link between claims and unemployment? Although both indicators highlight labor market slack, they measure different things. Unemployment comes from the Bureau of Labor Statistics (BLS) household survey, which aims to identify people out of work who actively looked for a job in the prior 4 weeks and are currently available for work. In turn, claims come from the Department of Labor, and basically count unemployed people who are receiving unemployment insurance (UI) benefits. Not all unemployed workers apply for benefits, and some are not even eligible. In fact, in ordinary times most workers don't receive UI benefits. UI does not cover people that voluntarily quit or first-time job seekers. And typically informal or undocumented workers are not eligible. Moreover, low-wage workers with intermittent hours often find it hard to reach the minimum amount of steady earnings needed to qualify for the benefits. The ratio between continuing claims and unemployed workers. On average, only a third of unemployed workers receive benefits. There was a clear jump during the pandemic because the government relaxed UI requirements, but it is evident that the ratio increases during slowdowns. Hence, we should perhaps expect more relevant upswings in claims than in unemployment ahead.
Bottom-line: hawkish pause.
The big surprise is that the median FOMC participant wants two more rate hikes this year.
The big surprise is that the median FOMC participant wants two more rate hikes this year.
Bottom-line: 중앙은행의 경제성장률 예측 변화보다 실업률 예측 변화가 중요한데, 내년도 실업률 예측치 변화(+0.4%p) 규모는 항상 경기침체를 동반하는 수준이기 때문임.
By forecasting a 0.4 ppt rise in the unemployment rate next year, (from 4.1% to 4.5%), the Fed implicitly suggests a significantly high risk of a recession, even though its GDP forecast doesn’t explicitly suggest as much. Since 1970, a rise in joblessness of this magnitude has always been accompanied by a recession.
By forecasting a 0.4 ppt rise in the unemployment rate next year, (from 4.1% to 4.5%), the Fed implicitly suggests a significantly high risk of a recession, even though its GDP forecast doesn’t explicitly suggest as much. Since 1970, a rise in joblessness of this magnitude has always been accompanied by a recession.