TSLA
Tesla
-- 355.840 NVDA
NVIDIA
-- 138.850 BABA
Alibaba
-- 124.730 INTC
Intel
-- 23.600 GRAB
Grab Holdings
-- 4.900 
With personal subjective opinions.
During the day, I described the reasons for the economic slowdown (especially in the US, which I particularly like 🇺🇸), but it seems that it takes a considerable amount of time and further in-depth research to know this for sure.
'Is there a sign of an economic slowdown in the United States?'
August 29, 2024
'Could the United States be facing an economic slowdown?'
The employment statistics for July released by the US Department of Labor on August 2 were unexpectedly weak, leading to increased concerns about a US economic slowdown, resulting in significant declines in stocks, a stronger yen, and lower interest rates.
Market volatility due to concerns about a US economic slowdown.
Due to the weak ISM manufacturing sentiment index on August 1 and the employment statistics on August 2, concerns about a US economic slowdown suddenly surged, and on the next business day, the S&P 500 index temporarily fell by 7.3% compared to the end of July, and the yield on US 10-year Treasury bonds, which was in the 4.0% range at the end of July, also temporarily decreased to the 3.6% range. The USD/JPY exchange rate fluctuated from the 150 yen level at the end of July to 141.70 yen on August 5, showing a strengthening of the yen and a weakening of the dollar. The Nikkei average stock price temporarily fell by 20.3% compared to the end of July, considering the impact of the sharp appreciation of the yen.
Until now, the US economy has remained in a moderate slowdown as inflation subsides, and there has been a trend of strong stock prices and a strong dollar due to the expectation of a soft landing. Therefore, the sudden market change in early August may have caused considerable panic among those who have just started investing, triggered by the new NISA and other initiatives.
However, it is necessary to take time to assess the trend of the US economy, not just based on one month's data, but by looking at multiple types of economic indicators to see if they are continuously deteriorating.
It takes time to determine an economic recession.
By the way, whether the US economy is expanding or contracting, the "Business Cycle Dates" that determine the phase of the economy are announced by a private institution called the National Bureau of Economic Research (NBER). However, this announcement has a low timeliness, and even if the economy enters a recessionary phase, it will not be announced until a considerable amount of time has passed. Therefore, careful analysis and consideration are required to determine the phase of the economy.
Generally, when the real GDP growth rate is negative for two consecutive quarters, it is considered to have entered a recessionary phase, which is called a "technical recession", but the official announcement is made by the NBER as the Business Cycle Dates.
When making predictions in the financial market, it is important to capture the turning point of the economic phase as early as possible, but as mentioned earlier, it takes time for the data to be available. Therefore, various studies have been conducted to try to detect the signs of a recession early. Among them, the "yield spread" has received the most attention.
In 2006, researchers from the New York Federal Reserve conducted a study.Economic analysis reportIt summarizes in (※it will transition to an external site), and concludes that the ability to predict the difference between the 10-year government bond yield and the 3-month government bond yield is high.
Figure 1 shows the movement of the difference between the medium and long-term interest rates subtracted from the 10-year government bond yield and the 3-month government bond yield. The interest rate difference fell into negative territory just before the recession period shown in shadow. In past movements, when long-term interest rates became lower than short-term interest rates, the so-called "reversal of the yield curve" occurred and the recession started 5 to 16 months later.
(Figure 1) Long-term and short-term interest rate spread and recession period in the United States
(Source: Created from Bloomberg data)
In addition to the interest rate differential, attention is also focused on the "Leading Economic Index" published by The Conference Board. Figure 2 shows the movement of the year-on-year change in the Leading Economic Index. Similar to the interest rate differential, there is a tendency for the Leading Economic Index to fall below the previous year's level and enter a recession 0 to 16 months later.
(Figure 2) Leading Economic Index and recession period in the United States.
(Source: Created from Bloomberg data)
By the way, regarding the current situation, the inversion of long and short interest rates in 1966 missed the recession entry, and the leading economic index has also missed the recession entry several times when it remained slightly negative.
Incidentally, in the current situation, the difference between long and short interest rates entered the negative range in November 2022, and the leading economic index compared to the same month of the previous year entered the negative range in July 2022, but it did not enter the recession phase even after nearly two years.
Attention is focused on the pace of increase in the unemployment rate.
In the midst of that, the "Sour Rule" started to attract attention around the end of 2023. The "Sour Rule" is a concept devised by Mr. Sour, a former economist at the FRB, which states that a 3-month moving average of the US unemployment rate rises by 0.5% or more from the lowest point in the past 12 months, indicating the beginning of a recession. Figure 3 shows the changes in the unemployment rate according to the Sour Rule.
(Figure 3) Sour Rule and recession phase
(Source: Created from Bloomberg data)
This number started to rise slightly towards the end of 2023, attracting attention. Afterwards, concerns about a recession increased rapidly when the change in the unemployment rate according to the Sour Rule exceeded 0.5% in the employment statistics for July released on August 2.
However, we should carefully consider whether it is a recession or not. It is not possible to determine whether the Sour Rule reliably indicates a recession without a sufficient amount of time passing. While it indicates that the pace of increase in the unemployment rate is slightly accelerating, it is important to calmly check economic indicators while maintaining a moderate level of caution and to determine whether this is a continuous trend or if other data besides employment is also deteriorating.
(Mitsui Sumitomo Trust Bank Marketing Planning Department Ayako Sera)
Go to the Market Column List
This document contains the views of the author and does not necessarily reflect our outlook. The data in this document is obtained from various sources, but does not guarantee accuracy or completeness. Also, it provides economic and financial information based on the data available at the time of creation, and is not intended as investment solicitation. We ask that customers make the final decision about investment on their own judgment.
Author Introduction
Reiko Sera
Ayako Sera
Mitsui Sumitomo Trust Bank Market Strategist
August 29, 2024
'Could the United States be facing an economic slowdown?'
The employment statistics for July released by the US Department of Labor on August 2 were unexpectedly weak, leading to increased concerns about a US economic slowdown, resulting in significant declines in stocks, a stronger yen, and lower interest rates.
Market volatility due to concerns about a US economic slowdown.
Due to the weak ISM manufacturing sentiment index on August 1 and the employment statistics on August 2, concerns about a US economic slowdown suddenly surged, and on the next business day, the S&P 500 index temporarily fell by 7.3% compared to the end of July, and the yield on US 10-year Treasury bonds, which was in the 4.0% range at the end of July, also temporarily decreased to the 3.6% range. The USD/JPY exchange rate fluctuated from the 150 yen level at the end of July to 141.70 yen on August 5, showing a strengthening of the yen and a weakening of the dollar. The Nikkei average stock price temporarily fell by 20.3% compared to the end of July, considering the impact of the sharp appreciation of the yen.
Until now, the US economy has remained in a moderate slowdown as inflation subsides, and there has been a trend of strong stock prices and a strong dollar due to the expectation of a soft landing. Therefore, the sudden market change in early August may have caused considerable panic among those who have just started investing, triggered by the new NISA and other initiatives.
However, it is necessary to take time to assess the trend of the US economy, not just based on one month's data, but by looking at multiple types of economic indicators to see if they are continuously deteriorating.
It takes time to determine an economic recession.
By the way, whether the US economy is expanding or contracting, the "Business Cycle Dates" that determine the phase of the economy are announced by a private institution called the National Bureau of Economic Research (NBER). However, this announcement has a low timeliness, and even if the economy enters a recessionary phase, it will not be announced until a considerable amount of time has passed. Therefore, careful analysis and consideration are required to determine the phase of the economy.
Generally, when the real GDP growth rate is negative for two consecutive quarters, it is considered to have entered a recessionary phase, which is called a "technical recession", but the official announcement is made by the NBER as the Business Cycle Dates.
When making predictions in the financial market, it is important to capture the turning point of the economic phase as early as possible, but as mentioned earlier, it takes time for the data to be available. Therefore, various studies have been conducted to try to detect the signs of a recession early. Among them, the "yield spread" has received the most attention.
In 2006, researchers from the New York Federal Reserve conducted a study.Economic analysis reportIt summarizes in (※it will transition to an external site), and concludes that the ability to predict the difference between the 10-year government bond yield and the 3-month government bond yield is high.
Figure 1 shows the movement of the difference between the medium and long-term interest rates subtracted from the 10-year government bond yield and the 3-month government bond yield. The interest rate difference fell into negative territory just before the recession period shown in shadow. In past movements, when long-term interest rates became lower than short-term interest rates, the so-called "reversal of the yield curve" occurred and the recession started 5 to 16 months later.
(Figure 1) Long-term and short-term interest rate spread and recession period in the United States
(Source: Created from Bloomberg data)
In addition to the interest rate differential, attention is also focused on the "Leading Economic Index" published by The Conference Board. Figure 2 shows the movement of the year-on-year change in the Leading Economic Index. Similar to the interest rate differential, there is a tendency for the Leading Economic Index to fall below the previous year's level and enter a recession 0 to 16 months later.
(Figure 2) Leading Economic Index and recession period in the United States.
(Source: Created from Bloomberg data)
By the way, regarding the current situation, the inversion of long and short interest rates in 1966 missed the recession entry, and the leading economic index has also missed the recession entry several times when it remained slightly negative.
Incidentally, in the current situation, the difference between long and short interest rates entered the negative range in November 2022, and the leading economic index compared to the same month of the previous year entered the negative range in July 2022, but it did not enter the recession phase even after nearly two years.
Attention is focused on the pace of increase in the unemployment rate.
In the midst of that, the "Sour Rule" started to attract attention around the end of 2023. The "Sour Rule" is a concept devised by Mr. Sour, a former economist at the FRB, which states that a 3-month moving average of the US unemployment rate rises by 0.5% or more from the lowest point in the past 12 months, indicating the beginning of a recession. Figure 3 shows the changes in the unemployment rate according to the Sour Rule.
(Figure 3) Sour Rule and recession phase
(Source: Created from Bloomberg data)
This number started to rise slightly towards the end of 2023, attracting attention. Afterwards, concerns about a recession increased rapidly when the change in the unemployment rate according to the Sour Rule exceeded 0.5% in the employment statistics for July released on August 2.
However, we should carefully consider whether it is a recession or not. It is not possible to determine whether the Sour Rule reliably indicates a recession without a sufficient amount of time passing. While it indicates that the pace of increase in the unemployment rate is slightly accelerating, it is important to calmly check economic indicators while maintaining a moderate level of caution and to determine whether this is a continuous trend or if other data besides employment is also deteriorating.
(Mitsui Sumitomo Trust Bank Marketing Planning Department Ayako Sera)
Go to the Market Column List
This document contains the views of the author and does not necessarily reflect our outlook. The data in this document is obtained from various sources, but does not guarantee accuracy or completeness. Also, it provides economic and financial information based on the data available at the time of creation, and is not intended as investment solicitation. We ask that customers make the final decision about investment on their own judgment.
Author Introduction
Reiko Sera
Ayako Sera
Mitsui Sumitomo Trust Bank Market Strategist
Data could not be pasted.
Same rules and others.
As of the end of August, the situation has been changing rapidly since September.
"Hey! We've avoided an economic downturn!" "We've entered an economic downturn from today!"
If people knew something like this, the market would be in great confusion and panic.![]()
![]()
💦
We have no choice but to watch the current situation by looking at the history of old candlestick charts.![]()
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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介護ばかりで心身壊れ鬱病（強迫性障害）の枯葉のおばちゃん('ω')投資は一心になれるので救いにもなってます。犬🐶好き❤️
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🎙️Discussion: 1. How will tariff policies affect the movement of key assets such as U.S. stocks, gold, and Bitcoin? 2. Given this context,
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J_M_RIN : The author is quite similar to my thoughts. I am watching out for a rapid decline in short-term interest rates rather than a yield curve inversion. In a soft landing scenario, stocks have historically shown growth with a gradual decline in short-term interest rates providing a tailwind.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
181338057犬心久美子 OP J_M_RIN : Thank you for your comment. It will be helpful for my studies. I appreciate it.
J_M_RIN 181338057犬心久美子 OP : 3ケ月金利の急激な落ち込みは要警戒です、ファンダ的にその可能性は低いと思いますが観察はしておいたほうが良いと思います![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
181338057犬心久美子 OP : Thank you to everyone who has liked it