May 30, 2024
Mish's Daily
By Mish Schneider
GDP showing a slowdown of the consumer. However, consumer spending, like so many things in the macro right now, is nuanced.
While some stores suffer poor earnings like Kohls, TJ Maxx thrives.
While people spend more on what they need than want, many are switching their spending to self-improvement-diet drugs a part of that
While costs in many areas continue to climb (insurance, housing, certain food items)-we are also seeing prices decline in airlines, car prices)
All of this is in part due to expectations changing that the Fed will stick to higher for longer and that inflation, particularly in the services area, will stay elevated.
BUT
Where is the economy going?
Long bonds are up a bit from the April lows-
Money supply is increasing
The dollar is testing the lower part of the trading range
Geopolitics continue to impact
And then there is Mother Nature-with floods or extreme droughts impacting crops-coffee, orange juice, cocoa-to name a few, now we watch for a predicted rough hurricane season and the impact to infrastructure.
This all points to a more stagflationary environment.
And does not rule out recession down the road-especially if the FED is considering a “twist” where they buy long bonds, and sell near term bonds, but without raising the rates, in essence trying to flatten the yield curve. Or worse, they lower rates sending the signal they are worried about the economy.
Since August 2023, the U.S. has lost over 1.3 million full-time jobs, while gaining 1.4 million part-time jobs over the same period. The year-over-year measure of full-time jobs has fallen into recession territory.
Banks are worried-United Wholesale Mortgage came out with-homebuyers who qualify won’t need to put down an upfront down payment.
The first mortgage will pay 97% of the cost-second mortgage will pay the remaining 3% with no accruing interest and will balloon-and paid off when mortgage is refinanced or paid back.
But this assumes no drop in housing prices or reduction of interest rates-in that case, homeowners cannot refi to lower rates if they get enough equity out of their house to pay back the 2nd mortgage.
Bottom line-the best barometers of next direction
Educational purposes only, not official trading advice.
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Mish in the Media-Want to see more? All clips here
Making Money with Charles Payne Mish talks with Charles on warning signs and yet picks to watch 05-28-24
Real Vision The Daily Briefing Without commercials 05-24-24
CNA Asia First Mish covers Ethereum, Nvidia and Transportation 05-24-24
Phoenix TV China Mish talks about China accumulating gold and why 05-23-24
Singapore Radio What to expect from Nvidia earnings and the trouble with transportation 05-20-24
Business First AM The Sky High Club is missing Granddad Russell 2000 05-20-24
Kitco News Team Stagflation fears to drive gold and silver higher 05-17-24
CNBC Street Signs Singapore Mish talks about the opportunities and pitfalls in equities 05-17-24
BNN Bloomberg Momentum, Warning Signs and Commodities Thoughts 05-16-24
Final Bar with Dave Keller Mish and Dave discuss commodities, the move to all time highs in indices and a tariff pick 05-14-23
Making Money With Charles Payne Mish and Charles discuss transportation index and Fed policy mistakes-plus a few picks 05-09-24
Coming Up:
May 31 Schwab with Nicole Petallides
June 4 StockchartsTV
Weekly: Business First AM, CMC Markets, stockpick.app
ETF Summary
S&P 500 (SPY) 529 pivotal
Russell 2000 (IWM) 210.80 ATHs resistance 200 support
Dow (DIA) From 40k to breaking the 50-DMA
Nasdaq (QQQ) Watching 455 level
Regional banks (KRE) Watching the range
Semiconductors (SMH) 240 pivotal
Transportation (IYT) distribution phase-needs to clear back over 64.00
Biotechnology (IBB) 135 now resistance
Retail (XRT) Resilient sector in a bullish phase
iShares iBoxx Hi Yd Cor Bond ETF (HYG) Broke under 77-needs to get back over that level again
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