Conference Board Leading Index MoM Prints At -0.1% (NOT Screaming Impending Recession, But Fed Manning The Bilge Pumps!)

The Conference Board leading index printed at -0.1% MoM indicating a slow but expanding economy through early 2020.

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But Jerome Powell and The Federal Reserve are manning the economic bilge pumps just in case.

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Yes, The Fed will be trying to pump liquidity into the economic ship in case it takes on too much salt water.

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“Man the pumps!!!”

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Trade Fog! UK Industrial Production Falls 1.8% YoY In August, China’s Offshore Currency Goes Bananas And Gold Price/ Volatility Rises, V2X Volatility Goes Haywire

This is an update on key economic news relating to US/China trade and UK/EU Brexit talks. Better known as Trade Fog … or simply “The Fog.”¬†

On the Brexit side, the UK avoided recession by posting of 0.3% in August. Unfortunately, UK industrial production tanked to -1.8% YoY signaling a slowdown for the UK economy.

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On the China/US trade arm wrestling match, China’s offshore currency is showing volatility as even the NBA is getting caught up in the trade scuffle.

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The volatility surface for the CNH is quite steep.

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Of course, trade fog helps assets such as gold to rise.

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The volatility surface for gold is similar to that of the Chinese offshore currency.

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Trade fog (or trade vacillation) is on the rise as seen in this chart of V2X volatility.

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The V2X index is above its various historic moving averages.

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As Brexit negotiation crawl along and the US meets with China or tariffs, we continue to see “The Fog” until Brexit and tariffs are finalized. Throw in Federal Reserve policy errors and we have a party!

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US Average Hourly Earnings (3 Mo Avg) Highest Since President GWBush, Home Price Growth Lowest Since 2012 (Housing Bubble Redux?)

Unlike the housing bubble and “The Big Short” years of 2005-2007, when home price growth was greater than average hourly earnings growth, we are now in the opposite situation: slowing 2% YoY home price growth and the highest average hourly earnings growth rate since 2008 and President George W. Bush.

Home price growth is slowing …

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As average hourly earnings growth rises to its highest level since 2008 and George “Dubya” Bush.

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Using a different home price growth index (FHFA Purchase Only) and an average hourly earnings for the majority of Americans, you can see where home price growth exceeds average hourly earnings growth starting in 1998 and ending in 2006 (the “Big Short” bubble) and the QE3-induced home price bubble starting in 2012 to today.

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Between HUD’s National Homeownership Strategy of 1995 and The Fed’s quantitative easing (particularly QE3). the US Federal government is doing the “housing bubble dance.”

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US Trade Weighted Broad Dollar Index Hits All-time High!

The US Trade Weighted Broad Dollar Index just hit an all-time high!

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Meanwhile, President Trump keeps needling Powell and The Fed to lower interest rates, but Trump can’t seem to make Powell his.

Meanwhile. Powell’s Jackson Hole speech is helping to push down the 2-year Treasury yield.

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The 10Y-3M Treasury curve slope fell to -43 basis point on the China/Fed (Ched?) fistfight.

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And the Treasury/Swap curves remain … Ched’d?

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Meanwhile, Powell and Fed Fans are in Jackson Hole Wyoming doing “Talk, talk.”