Consumer weakness + energy rebound, stagflation concerns are starting to rise; risks to the U.S. economy are dragging risk assets
At present, the macro environment is still relatively unfavorable for risk assets overall, as I mentioned in my macro framework this week: the expectations are basically in line.
Last week’s consumption data unexpectedly weakened, which in itself sparked concerns about the economy running into a slowdown. At the same time, crude oil has broken through and held above $90, increasing inflation expectations. Taken together, these factors are leading to heightened expectations for a mild stagflation scenario—this is the current macro pain point.
Going forward, in terms of consumption, watch the earnings reports of several major consumer stocks in the U.S. This week on Tuesday is Home Depot, Wednesday is Target and Lowe’s, and Thursday is Walmart. And as of now, Home Depot’s earnings report shows that U.S. consumer conditions are being downgraded. While it’s not a full-on breakdown or “runaway” slowdown, the risks are gradually expanding.
Next, this week’s real estate data + initial jobless claims + PMI + corporate consumption data. If, in addition, subsequent earnings from Target, Lowe’s, and Walmart also reflect a real downgrade in consumption, then expectations for U.S. economic weakness—even the risk of a hard landing—will increase significantly. If energy prices remain above $90 this week as well, then expectations for mild stagflation will inevitably become the market’s main focus.
One more point to note: theoretically, economic weakness would suppress rate-hike signals for September. But if weakness turns into a hard landing—meaning consumption data shows a cliff-like deterioration—and this coincides with high oil prices, then even if the rate-hike signals are weakened, it would still be unfavorable for risk markets, especially.
On the other hand, if economic data and earnings reports are not as bad, that could provide a relief signal to the market and gradually improve conditions. That said, everyone should pray a bit that the yen doesn’t break back above 160 this week—otherwise macro headwinds combined with expectations of tighter liquidity would make risk markets pretty bleak! #比特币永续合约资金费率创20个月新高
At present, the macro environment is still relatively unfavorable for risk assets overall, as I mentioned in my macro framework this week: the expectations are basically in line.
Last week’s consumption data unexpectedly weakened, which in itself sparked concerns about the economy running into a slowdown. At the same time, crude oil has broken through and held above $90, increasing inflation expectations. Taken together, these factors are leading to heightened expectations for a mild stagflation scenario—this is the current macro pain point.
Going forward, in terms of consumption, watch the earnings reports of several major consumer stocks in the U.S. This week on Tuesday is Home Depot, Wednesday is Target and Lowe’s, and Thursday is Walmart. And as of now, Home Depot’s earnings report shows that U.S. consumer conditions are being downgraded. While it’s not a full-on breakdown or “runaway” slowdown, the risks are gradually expanding.
Next, this week’s real estate data + initial jobless claims + PMI + corporate consumption data. If, in addition, subsequent earnings from Target, Lowe’s, and Walmart also reflect a real downgrade in consumption, then expectations for U.S. economic weakness—even the risk of a hard landing—will increase significantly. If energy prices remain above $90 this week as well, then expectations for mild stagflation will inevitably become the market’s main focus.
One more point to note: theoretically, economic weakness would suppress rate-hike signals for September. But if weakness turns into a hard landing—meaning consumption data shows a cliff-like deterioration—and this coincides with high oil prices, then even if the rate-hike signals are weakened, it would still be unfavorable for risk markets, especially.
On the other hand, if economic data and earnings reports are not as bad, that could provide a relief signal to the market and gradually improve conditions. That said, everyone should pray a bit that the yen doesn’t break back above 160 this week—otherwise macro headwinds combined with expectations of tighter liquidity would make risk markets pretty bleak! #比特币永续合约资金费率创20个月新高