The material in each presentation has been prepared by the respective participant for informational purposes only, and does not, nor does it intend to, provide tax, legal, accounting, or investment advice. This information is of a general nature and does not address the circumstances of any particular individual or entity. You should consult a qualified advisor on your situation to answer specific questions.
In the past, ISM new orders had often indicated a recessionary trend.
Above you can see we are approaching the pandemic lows of ISM new orders.
On a brighter note, it does not appear to be as weak as it was during the financial crisis of 2008.
Another observation is that this indicator tends to be leading, as it dipped below 50 in 2007 PRIOR to the crisis. This makes ISM an important indicator to watch.
Although unemployment is low, this trend will slowly drain US bank accounts.
In a way, the Fed wants to see less spending, but the pandemic stimulus caused a bloating of savings rates as well as spending.
At the same time, interest rates continue to rise, and the 10-year Treasury is near a 14-year high
Consumer confidence in both Europe and the US remain below pandemic lows.
The depletion of spending power is showing up in spending habits as well.
This may spill over into the holiday season, as consumers remain concerned about gas prices and inflation.
Container rates are normalizing to pre-pandemic levels, this illustrates demand destruction of the consumer combined with a shift out of the “stay at home and order stuff on Amazon” economy.
This is one of the first “positive” signs that higher rates are beginning to effect demand and slow things down.
Investors are remaining passive in ETF investments despite outflows out of active funds.
The strength of ETF investing even during uncertain times illustrates confidence in financial markets as a whole, but lack of confidence in professional money manger’s ability to navigate these markets.