A SURPRISING START TO THE KEVIN WARSH ERA 2/3

08 Jul

A SURPRISING START TO THE KEVIN WARSH ERA 2/3

Posted by BearBull Group In Investment Insight 0 comment

The US manufacturing sector demonstrated surprise structural strength in Q2, with the ISM and S&P Global PMIs peaking at multi-year highs of 54.0 and 55.3 respectively. While tech and automotive demand anchored this production momentum, the massive consumer services engine nearly stalled out. Squeezed by elevated fuel prices, discretionary spending on travel and leisure plummeted, dropping the Services PMI down to a marginal 50.7 in May before a minor, event-driven June bounce to 51.3. Meanwhile, corporate input price pressures eased slightly but remained historically bloated.

Key Points

Economic resilience will fade in Q2
The stagflation anticipated for Q2 is materializing
The momentum of the services PMI is a cause for concern
The job market is weakening and returning to a downward trend
The Fed enters a new era under Kevin Warsh
Inflation stabilizes at high levels over the summer
Rising volatility and bond yields
Investors’ sustained enthusiasm for the dollar
The surprising paradox of the stock market

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