"Shallow And Delayed" -- European De-Industrialization -- February 1, 2023

Yahoo!Finance morning brief: "shallow and delayed."

****************************
European De-Industrialization

Themes: link here. 

European de-industrialization:

• October 9, 2022 -- where this theme will be followed. 

We started talking about European de-industrialization last year (2022). The story is now being picked up by edgier sites and will eventually become a mainstream media business story. 

Biden got the message, signing off on two huge MAGA bills:

• "the chip act"
• "IRA" -- the inflation reduction act -- in fact, an end to the globalization movement that was begun under the Bill Clinton administration

The US has three advantages:

• an entrepreneurial spirit
• unlimited, inexpensive, accessible, multiple sources of energy
• relative to rest of world: population growing; young, smart workers

Now, this, today, link here: 

All That Recession Tallk? Whistling Past The Graveyard? -- November 7, 2022

Yahoo!Finance morning brief.

So I'm sitting on Yahoo Finance Live on jobs report Friday, almost in a state of disbelief. Non-farm payrolls rose by an impressive 261,000. That didn’t strike me as a recessionary print. Then an economist sitting next to me says he sees a recession in 2023 and a 2% rise in the unemployment rate.

Under Armour’s third quarter sucked last week, and so did the company’s forward guidance. And yet the stock was embraced by the market. Crocs had a solid quarter, but inventory ballooned. Red flag, says my former analyst self. The Street welcomed the quarter anyway. Etsy had a squishy quarter, and the market took it in stride. Same goes EBay. ‌

Then Starbucks reported an 11% same-store sales increase despite ever-inflating prices for its various coffees. Where is the recession there? ‌

"What we focus on is really: How do we sustain that ticket?" Starbucks CFO Rachel Ruggeri told me and Yahoo Finance's Brooke DiPalma in an interview. "Because it isn't just pricing, it's actually volume as well, we've seen our customers purchase more... so we're seeing increased volume." ‌

And Mastercard’s CEO Michel Miebach tells me there is nothing in his business that suggests recession is imminent. ‌

"Currently, based on the data that we have, there is no such indication [of a recession]," Miebach said. "The consumer is resilient, and that resilience will last. We have no indication that there is a near-term recession."

Probaby Needs To Be Fact-Checked -- July 8, 2022

Link here. And apparently wage pressure is not particularly noteworthy.

A very, very strange recession, indeed.

One can only assume it's all that stimulus money since 2020 that is still working its way thorough the economy.

Jobs: Wow, Wow, Wow -- Exceeds Expectations -- Not Stagflation, Yet -- July 8, 2022

Jobs report: expectations and analysis. The WSJ. Before the numbers are reported.

Jobs, actual: 372,000! Wow, wow, wow.

• Link here.
• Market will collapse. Put more pressure on Fed to keep raising rates.
• Participation rate: pretty much unchanged, around 62%.
• Interest rate has moved up. Ten-year treasury at 3.07% yield.  
• Unemployment rate stays unchanged at 3.6%. 
• Steve Liesman does not see report at inflationary.
• "some recession that we're having" (agree completely)
• a recession with 3.6% unemployment and 372,000 jobs added? 
• certainly not stagflation yet
• suddenly not worried about recession 

Re-posting from July 6, 2022: 

US recession: unfortunately for most, this article is behind a paywall.

• it's a very, very long article
• written by one of the better WSJ analysts; generally doesn't write but rather edits
• "If the US is in a recession, it's a very strange one."

The U.S. economy has experienced 12 recessions since World War II, and each one included two features: Economic output contracted and unemployment rose.

Today, something highly unusual is happening. Economic output fell in the first quarter and signs suggest it did so again in the second. Yet the job market showed little sign of faltering during the first half of the year. The jobless rate fell from 4% last December to 3.6% in May.

It is the latest strange twist in the odd trajectory of the pandemic economy, and a riddle for those contemplating a recession. If the U.S. is in or near one, it doesn’t yet look like any other on record.

Analysts sometimes talked about “jobless recoveries” after past recessions, in which economic output rose but employers kept shedding workers. The first half of 2022 was the mirror image—a “jobful” downturn, in which output fell and companies kept hiring. Whether it will spiral into a fuller and deeper recession isn’t known, though a growing number of economists believe it will.

Krugman: Paul -- also doesn't see definition of stagflation holding up which requires a high unemployment rate, and the 10-year Treasury yield is falling. Fast. Today: the yield is below 2.8% -- at 2.794% -- recall: 3% yield for the TYT is the threshold for disaster -- CNBC talking heads.

Krugman posted a FRED graph to support his case. I won't post the link; not worth the time. But six months to a year from now economists will declare a recession or not.