hi Guys
Things aren't looking too good for the USA.
Read on.....
Now, the bad economic news:
1) the American Bankers Association reported the delinquency rate on a basket of various types of consumer loans (including home equity loans and loans for autos, boats and home improvement) rose to 2.42% in the 1st quarter the highest level in 6 years,
2) the National Association of Realtors reported that its index of pending home sales fell 3.5% in May
dropping to its lowest level since 2001. The latest dismal reading in this leading indicator of home sales shows the downturn in the U.S. housing market is accelerating as predicted,
3) the Labor Department reported that U.S. employers created just 132,000 jobs in June while jobless claims rose slightly last week. Employee wages grew 3.9% over the last 12 months, which is significantly less than the true rate of consumer price inflation and so does not bode well for future consumer spending,
4) Crude oil prices rose 3% last week and are now trading at their highest level this year. We suspect Fed officials as well as bond market bulls must be feeling rather uneasy as this could very likely lead to another sell-off in global bond markets,
5) the Big Three U.S. automakers reported sharp declines in June car and truck sales conceding further market share to foreign rivals. Overall North-American built vehicle sales fell 4.5% to their lowest level in several years amidst competitive pricing pressures,
6) global central banks continue to tighten monetary policy as the Bank of England raised its benchmark interest rate by 25bps to 5.75% this week.
The European Central Bank held its benchmark rate steady at 4%, but ECB President Jean-Claude Trichet indicated that another quarter-point rate hike may be coming soon,
7) 2nd quarter earnings season kicks off next week and earnings for the S&P 500® are forecast to rise less than 5% on a year-over-year basis. In our view, such weak earnings growth is simply not enough to justify current market valuations, especially in a rising interest rate environment,
the $USD fell against many global currencies and slid to a 26-year low versus the British Pound. More inflationary pressures ahead?!
Regards
Things aren't looking too good for the USA.
Read on.....
Now, the bad economic news:
1) the American Bankers Association reported the delinquency rate on a basket of various types of consumer loans (including home equity loans and loans for autos, boats and home improvement) rose to 2.42% in the 1st quarter the highest level in 6 years,
2) the National Association of Realtors reported that its index of pending home sales fell 3.5% in May
dropping to its lowest level since 2001. The latest dismal reading in this leading indicator of home sales shows the downturn in the U.S. housing market is accelerating as predicted,
3) the Labor Department reported that U.S. employers created just 132,000 jobs in June while jobless claims rose slightly last week. Employee wages grew 3.9% over the last 12 months, which is significantly less than the true rate of consumer price inflation and so does not bode well for future consumer spending,
4) Crude oil prices rose 3% last week and are now trading at their highest level this year. We suspect Fed officials as well as bond market bulls must be feeling rather uneasy as this could very likely lead to another sell-off in global bond markets,
5) the Big Three U.S. automakers reported sharp declines in June car and truck sales conceding further market share to foreign rivals. Overall North-American built vehicle sales fell 4.5% to their lowest level in several years amidst competitive pricing pressures,
6) global central banks continue to tighten monetary policy as the Bank of England raised its benchmark interest rate by 25bps to 5.75% this week.
The European Central Bank held its benchmark rate steady at 4%, but ECB President Jean-Claude Trichet indicated that another quarter-point rate hike may be coming soon,
7) 2nd quarter earnings season kicks off next week and earnings for the S&P 500® are forecast to rise less than 5% on a year-over-year basis. In our view, such weak earnings growth is simply not enough to justify current market valuations, especially in a rising interest rate environment,
the $USD fell against many global currencies and slid to a 26-year low versus the British Pound. More inflationary pressures ahead?!
Regards