Observations
Retail sales
Like in case of inflation, the US retail sales have been gradually cooling off over the past year. The recent two readings brought negative surprises, but it also was no more than fluctuations around the falling trend.
Defensive stocks
Q3 financial reporting released by Verizon on the 24th of October mirrored a typical picture for large telecommunication companies: their revenues and profits are stable and well predictable. Verizon’s EPS came in 3% higher than expectations, AT&T beat expectations both in sales and profits.
Eight questions on US debt
The dramatic fall of US debt prices leads to multiple questions about the nature of ongoing processes in the US economy. As often happens at moments of surging market fluctuations investors are seeking an explanation far beyond where logic resides. We are highlighting several aspects of the current US government debt market.
GDP growth and Retail Sales
The US statistics that came in in July-August 2023 are revealing resistivity if the US economy to the high-rate environment. The real GDP, as of June 2023, is 7.6% higher than in June 2019. The Atlanta Fed GDP nowcasting is showing 5.8% of projected growth for Q3. Part of this growth is a result of low rates in 2021-2022 when the US fixed investments were at their highest level over the past 15 years. In this review we are investigating another phenomenon – a shift in Retail Sales cycles and its influence on GDP growth.
The Fed spectrometer
FOMC members are showing increasing disagreement on the projected path of monetary policy.
ADP report
The ADP report which was released on July 6th led to a controversial reaction. The number of signed new job contracts unexpectedly surged to near 500k for June versus normal level somewhere between 200k and 300k.