You are currently viewing Market Snapshot 7.5.22- From Fear Of Inflation To Fear Of Recession

Market Snapshot 7.5.22- From Fear Of Inflation To Fear Of Recession

I hope you had a terrific fourth celebrating our nation…

Since sentiment changed from fear of inflation to fear of recession, bonds are continuing to do better with the 10-yr down to 2.81% from 3.50 just a few weeks ago. There has been a lot of short covering in the bond market, and it looks like this may continue. The market has flipped from talking about how many more rate increases from the FED to speculating how quickly the FED will blink and CUT rates. Factory Orders were strong today, but there is something not right. If the number were credible, we would see bonds selling off and stocks rallying. Instead, we see the opposite. Float carefully but remember as you get closer to resistance, that price can get rejected and fall back toward support. I do still expect rates to improve over the short and mid term

When we start reading about things in the news, typically, the events have already happened (or are starting to happen). The WSJ is now sharing some insights about the possibility of the US already being in a recession. It’s already clear that is where we are but aside from that, the information is pretty interesting…

If the U.S. is in a recession, it’s a very strange one. The U.S. economy has experienced 12 recessions since World War II, and each one included two features: Economic output contracted and unemployment rose. Today, something highly unusual is happening. Economic output fell in the first quarter and signs suggest it did so again in the second. Yet the job market showed little sign of faltering during the first half of the year. The jobless rate fell from 4% last December to 3.6% in May. It is the latest strange twist in the odd trajectory of the pandemic economy, and a riddle for those contemplating a recession. If the U.S. is in or near one, it doesn’t yet look like any other on record, Jon Hilsenrath writes.

Analysts sometimes talked about “jobless recoveries” after past recessions, in which economic output rose but employers kept shedding workers. The first half of 2022 was the mirror image—a “jobful” downturn, in which output fell and companies kept hiring. Whether it will spiral into a fuller and deeper recession isn’t known, though a growing number of economists believe it will.

Please remain safe and stay healthy, make today great.