More economic indicators are now indicating a moderate level of (and some a high level of) risk as what is anticipated to be a prolonged trade war between the U.S. and China weighs on such indicators as Industrial Production, New Orders of Durable Goods, and Chicago Fed National Activity Index: Production and Income.

Comments on this week’s report:

  • The spread between the 10-year treasury yield and the 2-year treasury yield remains vary narrow at 0.19%, while the 10-year minus 3-month spread is inverted at -0.21% and indicates a high level of risk.
  • Real GDP (which is adjusted for inflation) was revised slightly downward but continues to grow at a strong year-over-year rate of 3.18%, and does not indicate any sign of risk.
  • Core Personal Consumption Expenditures (PCE), a measure of inflation, continues to grow at a relatively low year-over-year rate of 1.57% when compared to the Fed’s 2.0% target, and indicates a moderate level of risk.
  • Corporate profits are growing at a very strong 11.15% year-over-year rate, however, this may be overstated due to the -12.70% drop it experienced a year ago (as indicated in its 3-year trend).
Please Note: Due to various factors, including changing market conditions, this content may no longer be reflective of current opinions or positions. This report is for informational purposes only and should not be regarded as a substitute for independent research and personalized investment advice.

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