* Fed Gov. Waller says central bank ‘getting closer’ to an interest rate cut
* US Q2 GDP nowcast revised up to +2.7% vs. 1.4% in Q1 via GDPNow model
* Federal Reserve’s Beige Book suggests economy is slowing
* US industrial production rose more than expected in June
* US housing starts rose in June, but remain near 2-year low:
US economic activity is on track to remain slow in this month’s second-quarter GDP report. The expansion is expected to continue via the government’s data, but today’s revised nowcast for Q2 suggests that output will remain more or less comparable to Q1’s modest increase, based on the median estimate for a set of projections compiled by CapitalSpectator.com.
* IMF lowers its 2024 economic growth forecast for US
* A new era for the US dollar may arrive with a Trump-Vance administration
* Trump says, as president, he would let Fed Chair Powell to finish his term
* US homebuilder sentiment falls in July to lowest level since December
* US retail spending was flat in June, but…
* Retail sales ex-autos rise 0.4%, biggest monthly gain since April:
If the S&P 500 flatlines from current levels through Dec. 31, 2024, the market would still go into the history books as delivering yet another strong year on the basis of an 18.1% year-to-date rise through Monday (July 15). But the best may be yet to come, some Wall Street firms predict.
* Recent inflation data ‘add somewhat to confidence’ for rate cuts: Powell
* Biden set to call for 5% cap on rent increases
* Wall Street expecting approval of ethereum ETFs
* Demand for safety supports gov’t bonds despite deteriorating gov’t finances
* NY Fed manufacturing activity index continues to decline in July:
We’ve been here before. Markets price in high odds that the Federal Reserve will soon start cutting interest rates only to learn otherwise. Is this time different? That’s the bet… again.
* How might Trumponomics influence the US economy?
* China’s economy slows in Q2 to softest annual pace in five quarters
* Higher interest rates take a toll on earnings at big banks
* What’s the source of portfolio alpha? Behavioral risk a key factor
* Kuwait announces discovery of “gigantic oil field”
* US consumer sentiment drops for second month in July to 8-month low:
● Shocks, Crises, and False Alarms: How to Assess True Macroeconomic Risk
Philipp Carlsson-Szlezak and Paul Swartz
Excerpt via Harvard Business Review
In 2022, when U.S. interest rates climbed, a cascade of emerging-market defaults were predicted—but they didn’t materialize. Also in 2022, and again in 2023, public discourse cast an imminent recession as “inevitable.” Instead a resilient U.S. economy not only defied the doomsayers but delivered strong growth.
For executives and investors such whiplash comes with two types of costs: financial and organizational. Consider the financial cost to automakers that reduced their semiconductor orders in 2020 because they misread the Covid-19 recession as a protracted economic depression. That meant they missed out on sales during the roaring recovery. And leaders can lose the trust of their organizations if they overreact to false alarms with abrupt reversals in strategy, operations, and communications. Clearly, getting the macro call right really matters.
The spread between the US 10-year Treasury yield vs. a ‘fair value’ estimate calculated by CapitalSpectator.com narrowed to a three-month low in June. The market-based yield is still well above this fair value estimate, but as expected in recent months (see here, for instance) the excessive market premium is still expected to slide.
* Futures estimate of first rate cut on Sep. 18 rises to 90%-plus probability
* Rate cuts may be appropriate, says San Francisco Fed president Mary Daly
* Jobless claims in US fell to a 6-week low last week
* US consumer inflation’ 1-year trend falls to 3.0% in June–lowest in over 3 years
* US 10yr Treasury yield drops to 4.22%, lowest close since March:
