Friday, June 26, 2020

Macro Update: You Heard Correctly, But No!

This week's macro update is going to be short and sweet. The Mrs. and I are heading out early afternoon to meet up with a 3-yr old who's ready for some serious Meemaw and Peepaw action this weekend.

For starters, our proprietary macro index didn't budge week over week. I.e., the two components that saw consequential (for scoring purposes) movement offset one another. The Chicago Fed Nat'l Activity Index turned positive while the S&P 500/Treasury bond ratio went negative. Bottom line, our index repeated last week's historically-low -51.92.

Of course other stuff jumped around a bit, but not enough to move their respective needles. 

"But Marty! Didn't I hear this morning that consumer spending picked up big time, even though personal income declined?" You ask. Answer: "You heard correctly, and, no, really, no..."

Here -- on our US Consumer Spending graph -- is what you heard:

Here -- on our other US Consumer Spending graph -- is what we saw:

Graph 1 being the month-on-month % change coming off of the worst month for consumer spending in a 100 years. Graph 2 being the actual number, i.e., reality...

Now, absolutely, rate of change on virtually everything we track is huge, and we'll be measuring that every step of the way going forward. That said, critical thinking -- taking into account, for example, the sustainability of personal income when literally government assistance makes up 30% of it, and its rate-of-change impact -- is, well, critical!

So much more I'd like to share, but have it here for today. I'll circle back Sunday evening with more.

Have a great weekend!

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