Still neutral/bearish on the Economy, the Stock and Crypto Markets
Hi HODLers, Hiveans and Lions,
Despite the recent market bounce, I continue to doubt that the US economy is going to get better in the coming quarters. I do understand that we have reached probably the high-end of interest rates but there are a lot of headwinds coming.
- Geopolitical tensions might increase inflation (less trades, more defense spending and higher price for basic resources)
- US Consumers' savings are completely depleted and if you combine this with higher monthly house and auto mortgages as well as increasing payments on credit card debt. Well... the party is about to stop
As of now, massive layoffs did not happen but companies are cutting on spending (travel, extra perks...) and hiring less.
Yesterday, LVMH the leading luxury group published its 3rd quarters sales and they disappointed. Usually, they do not. Sales were slowing in Asia (China mostly), in Europe (everywhere) and in the US.
This sector has been weathering storms for the past 15 years, continuously growing and now they are sharing that the consumer is looking at price points, does not want to buy as much as before...
Conference Board Leading Indicators
This is something I really value and some top notch data followed by the finance world. They do not publish often new data points but when they do, you better watch out. This is calculated using a lot of different metrics weighted by order of importance.
I think the graph is pretty easy to understand.
We should soon have the September data point.
Stay safe,
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Good points and I see them as well. Though I think that the market is already pricing that in and has done so mainly. LVMH stock for example fell more than -20% over the last month and also other consumer product companies, normally recession proof, like Coke or McD are weak since weeks.
My base thesis is that we will see some more weeks, maybe months with a sideways market but going into 2024 we will get relief. No big crash ahead unless the Fed and the officials completely mess it up with interest rates of 6 or 7 percent.
Yup some is priced in. Some is not, LVMH dropped 6% today after they are lowering their expectations for coming quarters.
There are still a lot of wage gains in Auto, Manufacturing or leisure industries which will continue to increase inflation and put pressure on the FED. Let’s see what’s next! It’s going to be bumpy, no matter what 😅
🤐🔫
Stay strong Frens!
Thank you for the detailed discussion about the current situation and the current market period.
You are more than welcome! Glad you enjoyed it.
SPX is nevertheless in a blowoff top formation and Bitcoin will follow.
It clearly materialized. Nice catch!