The Milwaukee Company’s Economic Briefing Report is a weekly summary of economic indicators that have the potential of impacting stock and bond markets.  Readings associated with a high level of risk for a number of the indicators listed below could suggest an elevated risk of a U.S. recession, and therefore a higher level of market risk.

Comments on this week’s report:

  • Treasury yield spreads remain historically narrow with the 10-year minus 2-year spread sitting at 0.16% and the 10-year minus 3-month spread sitting at 0.21%.
  • Housing starts plunged to its lowest level in over two years and dropped its year-over-year change from -6.83% to -10.91%. Housing starts should be closely monitored as it heads towards a high level of risk.
  • The growth in housing prices (measured by the Case-Shiller Composite Home Price Index) is slowing down as it marks its 9th consecutive monthly drop in its year-over-year rate, yet it still is growing at a fairly strong 4.16%.
  • Growth in new orders of durable goods dropped from a trailing twelve-month growth rate of 5.56% to 3.49%, but still indicates a low level of risk.
  • The Chicago Fed National Activity Index (CFNAI) for production and income dropped into high risk territory as it fell from 0.8 to -0.45. However, the composite CFNAI three-month moving average still remains at a low level of risk.
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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