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US High Yield Spread

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Euro Area High Yield Spread

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10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity

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University of Michigan: Inflation Expectation

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Note

The spread between the High Yield index and the 10 year government yield is widening in the US and EU. This happens when debt investors fear a slow down or recession and increase the interest rate to compensate for the higher risk of non-payment that might happen for lower grade companies during a downturn. the Spread between the US 10YT adn 2YT indicates a recession looming when it is negative. UoM inflation expectation remains at above 5%. This is the level of inflation consumers expect for the next 12 months. this is what the FED is trying to bring down by raising rates.

5-Year, 5-Year Forward Inflation Expectation Rate

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Euro Area Mfg PPI vs Euro to Dollar exchange rate

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S&P 500 vs Jobless Claims vs Fed Funds Rate

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Note

On the left, The S&P 500 and jobless claims reacted negatively as the first FED Funds rate hikes were implemented. Recently the stock market rallied on a belief that Powell had finally turned dovish and rate hikes might be nearly over. This is unlikely. The FED will not relent until they see inflation data respond. On the right Euro Area PPI (inflation) has gone vertical while the Euro is near parity, but strengthening recently vs the dollar.

Total Business: Inventories to Sales Ratio

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Multi-Series Graph - Leading Indicators

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Note

On the left, the Inventory to Sales Ratio is on the rise, but still at relatively low levels. On the right, housing starts were rising while mortgage rates were at very low levels. As mortgage rates have skyrocketed to +5% housing starts have begun to collapse On the right US housing Starts, and the 30 year mortgage rate. As Mortgage rates went vertical this year into 5+ territory Housing Starts have begun to fall.

US PPI Index - Total and for Plastics Materials & Resins

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Chicago Fed National Financial Conditions Index

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Nominal Broad U.S. Dollar Index

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Multi-Series Graph - Leading Indicators

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US Industrial Production: Total Index

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Manufacturing Sector: Labor Productivity

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Job Openings: Total Nonfarm

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New Privately-Owned Housing Units Started: Total Units

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Multi-Series Graph - Leading Indicators

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Multi-Series Graph - Leading Indicators

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Multi-Series Graph - Leading Indicators

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US PPI Index - Total and for Plastics Materials & Resins

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Multi-Series Graph - Leading Indicators

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Multi-Series Graph - Leading Indicators

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Retail Sales: Building Materials and Supplies Dealers

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Multi-Series Graph - Leading Indicators

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Multi-Series Graph - Leading Indicators

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Multi-Series Graph - Leading Indicators

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Multi-Series Graph - Leading Indicators

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Multi-Series Graph - Leading Indicators

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Multi-Series Graph - Leading Indicators

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Nonfarm Private Payroll Employment for Construction

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Orders: Construction: Permits Issued: Dwellings / Residential Buildings for the Euro Area (19 Co...

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