SignalPlus Macro Research Report (20230927): US stocks fell, CPI may rebound in the first quarter of next year
Similar to previous days, weak economic data (-8.7% new home sales in August, the lowest level since March; US consumer confidence index -5.7 points, the lowest level since May), the impending government shutdown Risks, the threat of Moodys downgrade, and overall market de-risking efforts made the SPXs early rebound attempts futile, and it ended the day down another 1.5%.
In addition, yesterdays CoreLogic 20-city house price index rebounded (+0.13%), raising concerns that price pressures have bottomed out and begun to accelerate, with housing prices, ISM service prices and used car prices rebounding and crude oil prices at $90 The high points increase the possibility of CPI rebounding at the end of the year and in the first quarter of 2024.
The excess savings accumulated during the epidemic have finally begun to be exhausted. Only the top 20% of households have not used up their excess savings. Loan delinquency rates have begun to rise. Student loan repayments will restart on October 1. The Federal Reserve maintains high interest rates. Factors such as Longer Time have caused the market to have many doubts about the outlook for consumer spending, causing consumer-related stocks to join the ranks of interest-rate-sensitive stocks and lag significantly.
Synchronized weakness in bonds and stocks has made common risk parity strategies perform poorly so far this month, exacerbating the risk-off tone and adding pressure for forced selling; SPX market breadth has fallen sharply, with only about 40% of stocks in above the 200-day moving average, while stocks, bonds, CDS and emerging market FX fell in tandem, further emphasizing the cash is king theme in 2023; additionally, unlike cryptocurrencies, cross-asset volatility has begun have risen again, with the recovery in equity VIX and interest rate volatility being the most obvious, having rebounded to pre-summer highs.
Looking ahead, with the interplay of factors such as short-term oversold markets, a tricky quarter-end, ongoing UAW strikes and government shutdown risks, price action is expected to be very volatile, and there may not be much relief in early October. We still recommend Take a cautious/bearish approach to risk.
You can search for SignalPlus in the Plugin Store of ChatGPT 4.0 to get real-time encryption information. If you want to receive our updates immediately, please follow our Twitter account @SignalPlus_Web3, or join our WeChat group (add assistant WeChat: SignalPlus 123), Telegram group and Discord community to communicate and interact with more friends.
SignalPlus Official Website：https://www.signalplus.com
