The organization in the United States says whether the economy is in recession or not seems to be asleep from work.
The National Bureau of Economic Research defines a recession as the period between the peak of economic activity and its lower subsequence, or the lowest point. There is no debate that the NBER is right to call the last cycle the highest cycle in February 2020, but the bottom line was, if you take into account unemployment claims, in late April and later. in May, if you consider employment or personal income.
Employment and personal income are well above the troughs.
For markets, it matters when the economy is expanding or recession. According to Deutsche Bank research, growth, as measured by the Institute of Supply Management’s manufacturing index, typically reaches a maximum of 10 to 11 months after the recession ends. It would be right now, if you follow the NBER’s definition of recession and not its stubborn refusal to say so.
Over the past 20 years, there has been a 73% correlation between the annual and rotating earnings of the S&P 500 SPX,
and the ISM manufacturing index level. This makes sense: you will expect growth assets, like equities, to correlate with measures of economic growth.
According to Deutsche Bank numbers, the S&P 500 sold around peak growth at an average of 8.4%, and fell by an average of 5.9% when the ISM flattened instead of falling . And the timing of these drops was early from the peak, usually two weeks later, and lasted six weeks in total.
Therefore, when this peak arrives it is important. And Deutsche Bank says it will arrive in the next three months; it’s not a big shock, as the March reading recorded 64.8%, a maximum of 38 years.
“As growth grows over the next three months, we expect discretionary investors to reduce their positioning from extremely high levels and consider retail investors unlikely to buy the dip. Using historical experience as a guide, a decline of close to -6% is advocated if growth flattens near the peak, a decline greater than -8.4% with respect to inverted V-growth, ”said the strategists led by Binky Chadha.
From here, however, actions can backfire, they say. And the key in late summer and fall will be whether inflation stays or accelerates and how the Federal Reserve reacts.
Minutes fed on deck
The minutes of the Fed’s latest interest rate decision will be announced at 2 p.m. in the East. Markets will focus on any discussion about when to slow down the bond purchase rate and how “substantial progress” is defined toward maximum employment and price stability targets (the Fed’s reduction condition).
Jeff Bezos, CEO of Internet retail giant Amazon AMZN,
supports an increase in corporate taxes to pay for more infrastructure spending, The Wall Street Journal reported citing a company note. JPMorgan Chase JPM,
President and CEO Jamie Dimon used his annual letter to advocate stricter regulation of non-bank competitors as he called for the removal of tax breaks and said higher taxes on the rich would be justified. .
Cruise operators, including Carnival CCL,
and Norwegian Cruise Line Holdings NCLH,
extended Tuesday’s gains in premarket trading, with optimism about when reserves can continue. Irish discount airline Ryanair Holdings RYAAY,
said European travel restrictions would mean passenger traffic at the bottom of its orientation.
Toshiba 6502 Industrial Conglomerate,
jumped into Tokyo trading after receiving a proposal to be acquired by CVC Capital Partners in what would be one of the largest private equity deals of all time if completed. Singapore Grab’s food delivery and payment service is slated for a $ 35 billion valuation in a deal to be acquired by Altimeter Growth 1 AGC from Altimeter Capital,
acquisition company for special uses, according to the Financial Times.
Some DoorDash DASH,
according to Bloomberg News, workers are trying to focus on the algorithm to offer jobs at higher prices.
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10 year facilitation
The performance of the TMUBMUSD10Y three years from the Treasury,
has fallen over the past week, reaching 1.66% on Wednesday.
US stock futures ES00,
NQ00,
they were little moved.
Humans no longer drive the demand for microchips
Manufacturer of microchip equipment Applied Materials AMAT,
on Tuesday it set out its vision for the coming years, targeting 2024 tax gains of $ 8.50 per share for sales of $ 26.7 billion. Although the market did not respond warmly, one of its charts exposes the demand for microchips, driven by algorithms, not by human consumption.
Random readings
The owner of the world’s largest cryptocurrency exchange has neither a car nor a house.
Singing in the alien rain? Extraterrestrial raindrops are like rain on Earth.
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