This month, economists upgraded their forecasts for US GDP growth in 2023.
But they lowered their projections for 2024.
As we saw last week, manufacturing recession is here, and forecasts are now reflecting that reality.
Inflation estimates have been coming down.
The Fed’s Beige Book sentiment indicators (based on the language used) signal softer economic activity.
Source: Oxford Economics
Existing home sales were very weak in December, …
… down 36% in 2022. This is the biggest annual decline in decades.
Homes are taking longer to sell, with deals closing below the final list price.
The Conference Board’s index of leading indicators worsened again last month.
This index has never declined this much in six months without a recession (the index goes back to the late 1950s).
Healthcare inflation is about to surge as wage growth in the sector accelerates.
The Q4 GDP growth was stronger than expected.
Housing investment remains a substantial drag on the GDP.
Economic weakness in December and multiple leading indicators signal weaker US growth ahead.
– GDP vs. financial conditions:
Here is the Chicago Fed’s national activity index.
Durable goods orders rose sharply in December, …
driven by aircraft orders (such as Boeing’s 250 aircraft orders from United Airlines).
The broad money supply has not registered a year-over-year decline like this in decades, which should help cool inflation.
Market Data
US corporate profits are at risk this year as the economy weakens.
All eyes are on this chart of the S&P 500.
Who owns the US equity market?
The global GDP in 2022:
Is 4100 the next stop for the S&P 500?
Quote of the Week
Earnings don’t move the market; it’s the Federal Reserve Board… focus on the Central Banks, and focus on the movement of liquidity… most people in the market are looking for earnings and conventional measures. It’s liquidity that moves markets.
– Stanley Druckenmiller, American investor, former hedge fund manager, and philanthropist.
Picture of the Week
Colle Santa Lucia, in the Italian Dolomites
All content is the opinion of Brian J. Decker
