By New Deal Democrat
It's a slow week, with the big news coming on Friday with the release of Q4 GDP.
In the meantime, here are a few things to consider:
1. In 2015, 5 things moved in lockstep: Chinese stocks, US stocks, oil prices, industrial commodity prices, all down, and the US$, up. Those trends may be abating.
First of all, the Chinese stock market, which has been unwinding a bubble, has given back about 75% of its gain:
That's 2400 points down from the peak, about 800 left to give back the entire 2014-15 surge. There's no guarantee the bottom will arrive at 1999, but that's not a bad target.
2. Industrial commodities haven't retreated nearly as much as oil:
These have gone more or less sideways since November.
Yesterday I pointed out that the spot index for the US$ is also up less than 5% YoY, for the first time since late 2014.
2. Yay new home sales, but don't get too excited:
This series is heavily revised, usually away from an extreme high or low reading. I suspect last February's high is going to hold for this cycle.
3. While we might get a negative GDP print, the weakness in the economy is very concentrated. The broader economy is holding up pretty well. That's not a recession.
So says Prof. Tim Duy. It's nice to have someone of such high status and academic credentials agree with my point of view.