Operating at the Intersection of Technology and the Capital Markets
Tag: U.S. economy
Transportation Services company J.B. Hunt (ticker: JBHT) reported tonight. JBHT's quarter speaks to a down economy as the company experienced lower volumes (loads) and lower revenue per load. The real economy and the companies that participate in it are telling a story that is far less optimistic than the pollyannaish tales told by financial news … Continue reading Transportation Services: Down As One Would Expect In A Down Economy
Feels like a global recession to me and the U.S. isn't quite as deep into it as Western Europe thanks to our reserve currency status which we continue to abuse. Prices were down again for the month of June for both imports and exports. Read the BLS release HERE. I like to focus on exports: … Continue reading Import, Export Prices Are Down Again
More Technology-related layoffs have occured in Q4 2022 than at the COVID economic trough in Q2 2020 (51,048 employees in the month of November 2022). Technology layoffs continue to mount as: interest rates climb; inflation remains elevated; global demand sputters and; as macro-economic uncertainty remains high. Check out Layoffs.fyi (created by Roger Lee), to track … Continue reading Technology Layoffs Continue To Climb
The 2008 downturn and the current downcycle have similarities as far as investor sentiment is concerned. We believe that investor sentiment will sour early next year as Q4 2022 earnings reports come in. 2023 earnings estimates and stock prices will move lower off of the Q4 EPS reports. Early cycle disbelief. I recall that in … Continue reading Not So Fast. This Won’t Be Quick & Painless.
Prices need to fall across the economy to really kickstart economic growth to the point where Americans can feel it. Unfortunately this is not going to happen. Prices and interest rates will plateau, yet they will remain elevated as the economy stalls. We have a word for this economic condition - Stagflation. If you regularly … Continue reading Prices Need To Decline To Kickstart Real GDP Growth. Don’t Hold Your Breath.
Credit Markets (Yes): A liquidity crisis would cause the Fed to pivot. If the credit markets seized up the Fed would intervene. Market intervention is after all the Fed's operating model (as is the case for all central banks). Consumers and investors would have to lose confidence in the U.S. Economy to the point where … Continue reading What Would Cause The Fed To Pivot?
China is cutting rates again in an effort to bolster the local economy which has slowed due to COVID lockdowns and the bursting of the local property bubble. We touch on a few near-term implications of this slowdown. More importantly, from a strategic perspective China's easing will likely result in the U.S. expanding its trade … Continue reading China Is Easing
The Atlanta Fed's GDPNow Q2 Real GDP estimate was -2.1% as of July 1st. This marks the second consecutive negative Real GDP quarter which means we are officially in a recession. A recession in 2022 was an easy call for us to make as there was essentially zero probability of the U.S. economy growing in … Continue reading It Is Official. We Are In A Recession.
Inflation, interest rates and OpEx are climbing while demand softens for many companies. One glance at the table below shows that layoffs over the past two months are fairly widespread across industries. We believe that more layoffs are coming as inflation and interest rates rise. Rates will accelerate higher in June should the Fed make … Continue reading More Layoffs Are Coming
We do not believe that investors fully appreciate how fragile the U.S. economy is. Our view is that the U.S. economy is in a recession and that this period will be followed by long-term muted growth given: 1.) the enormous U.S. Government debt load ($30.4 trillion), 2.) persistent price inflation, 3.) a consumption-driven economy rather … Continue reading The U.S. Economy Is Long-Term Fragile
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