I just wanted to offer some commentary on some of the macro charts I recently posted on twitter. The larger message of all of these charts: Intervention is ultimately coming be it in the form of rate cuts and/or QE. It’s just a matter of the how and the when. Intervention is needed as the macro wheels are turning. Like it or not intervention remains the lifeblood of these markets, they just can’t do without and every bull case in the past 10 years has remained entirely dependent on it.
To perhaps most succinctly summarize the state of markets:
Support of equities and remaining in control so far: The Fed, buybacks and political jawboning. Going against equities: Macro reality. Upside triggers this year: Potential miracle saves in form of a China deal and somehow a Brexit deal by the end of October perhaps with new political leadership. Potential downside triggers this year: The weight of the emerging macro picture wrestling control away from the forces of intervention.
And this macro reality is painting a consistent picture across the board and I’m just highlighting a few of these:
Durable goods year over year:
No expansion, regressive growth similar to the lead up to the 2008 recession.
Median sales prices of homes sold year over year:
It’s the 3rd largest reversion to negative since 1970, the previous 2 examples of this magnitude coincided with recessions.
Real retail sales growth year over year:
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