Eurodollar University

New information from various sources all around the US service sector shows a downturn taking hold in that segment with employment signals turning more and more negative. It confirms the ongoing and more decisive bull steepening continuing to take shape in the Treasury market. Even mainstream sources are having to cover the fact there is something big happening when you can see it in services.Eurodollar University's Money & Macro AnalysisCNN A key part of America’s economy has shifted into reversehttps://www.cnn.com/2024/07/07/economy/stocks-week-ahead-services-sector-slow-restaurants-stores/index.htmlFRB Philadelphia August 2024 Nonmanufacturing Business Outlook Surveyhttps://www.philadelphiafed.org/surveys-and-data/regional-economic-analysis/nbos-2024-08Fifth District Survey of Service Sector Activityhttps://www.richmondfed.org/region_communities/regional_data_analysis/surveys/service_sectorTexas Service Sector Outlook Surveyhttps://www.dallasfed.org/research/surveys/tssos/2024/2408https://www.eurodollar.universityTwitter: https://twitter.com/JeffSnider_EDU

Germany is facing an alarming economic crisis, with consumer sentiment and business expectations plummeting. The podcast delves into the impact of the struggling U.S. economy on European markets and reveals contrasting forecasts from optimistic Bundesbank predictions and dire PMI reports. Insights into the deteriorating IFO Business Climate Index illustrate the severity of the situation, while fears of a global recession loom large, particularly due to trends in the U.S. and China.

The podcast dives into the shocking 30% drop in shares of Temu's parent company, revealing the turbulence in China's consumer market. It discusses the struggles that Chinese firms face amid government attempts to manipulate market rates. The conversation also critiques the ineffectiveness of recent rate cuts by the People's Bank of China, raising concerns about weak demand and declining inflation. Overall, it paints a troubling picture of China's economic challenges and their potential global impacts.

Nouriel Roubini, a famed economist known for his crisis forecasts, joins Janet Yellen, the former Federal Reserve chair and current Treasury Secretary. They dive into the surprising realities behind low interest rates, suggesting they're not just manipulated by governments but rather reflect deeper economic truths. The conversation critiques common misconceptions about monetary policy and emphasizes the need to understand interest rates as signals of market conditions rather than mere tools of manipulation.

Jay Powell's recent speech at Jackson Hole took an unexpected sales pitch approach, revealing deeper economic issues. The discussion critiques the Fed's struggles to maintain public confidence amidst unexpected economic data, like rising layoffs and falling demand. There's concern over the effectiveness of potential interest rate cuts on consumer behavior and stability. Additionally, the conversation highlights major missteps in central bank policies and the urgent need for honesty about the current economic climate.

Jerome Powell, the prominent leader of the Federal Reserve, reveals troubling signs in the US economy, including rising unemployment. He discusses the implications of recent monetary policy decisions, like rate cuts that may not bring relief as expected. Powell also examines the risky behaviors of Japanese banks chasing higher yields in US junk debt, highlighting market vulnerabilities. With recession fears on the rise, the talk dives into crucial economic indicators and the shifting landscape faced by investors and workers alike.

Central banks are in panic mode, enacting emergency rate cuts as unemployment rises and the economy falters. Historical patterns reveal that these cuts often signal the onset of recessions. The podcast highlights the Fed's slow reactions to past downturns, raising concerns about current economic signs. With inflation complicating matters, the urgency of central banks to adapt signals a troubling economic landscape.

Macy's struggles reflect discrepancies in the U.S. labor market. Despite positive hiring reports, consumer spending is declining, raising concerns for retailers. Recent data revisions show a significant drop in job growth, highlighting a troubling trend. The speakers emphasize the importance of the Quarterly Census of Employment and Wages in understanding the true state of the labor market and warn of potential economic downturns.

Gold prices are soaring to record highs, driven by safe haven demand amid rising global economic uncertainty. While stocks seem to rally, concerns about a potential recession and stagnating interest rates loom large. The contrast between optimistic equity markets and troubling trends in energy prices raises questions about future economic stability. As diesel demand hits a low and the Fed hints at possible rate cuts, the relationship between gold and stocks becomes increasingly complex, highlighting diverging investor sentiments.

The discussion dives into the alarming decline in US consumer confidence, suggesting it signals a looming economic downturn. Experts argue that ignoring this trend as a mere 'vibe-cession' overlooks the mathematical and historical evidence. The episode critiques traditional economic indicators while stressing the vital role of public sentiment in forecasting unemployment rates. As consumer confidence plummets, predictions of skyrocketing unemployment emerge, challenging conventional wisdom about the health of the economy.