Good Tuesday Am,

Coming back from a long weekend is always challenging (especially when the rest of the world has kept on working).

Markets are catching up though.

Unfortunately for the moment, that means both equities and debt (stocks and bonds) are pulling back a bit. Nothing substantial and the news out today was bond friendly, but with the recent run up, profit taking is not unexpected. We are still trading above both the 50- and 100-day moving averages which is very bullish. Unless you have to lock, I would likely sit on it for a bit and see how the day unfolds. Tomorrow brings PPI which is always a market mover so be aware.

The Wall Street Journal’s latest quarterly Survey of Economists suggested to expect higher interest rates to push the U.S. economy into a recession in the coming year. On average, business and academic economists polled by the WSJ put the probability of a recession in the next 12 months at 61%.

This is one of my favorite charts…

The HOPE Cycle. Housing first, employment last heading both into and out of a recession. Employment is on a downturn.

This chart was a real eye opener.

The correlation between rate, price, and velocity are clear but I did not expect a 68% cancellation rate.

Personal savings is almost nonexistent.

You cant spend what you don’t have (well you can, but not for long). The R word is next.

And a quick lesson in economics…

How does supply/demand work:

Please remain safe and stay healthy, make today great!