The overall risk of the economy is moderately higher than it has been more recently as the CFNAI three-month average remains below zero and the spread between the 10-year treasury and the 3-month treasury inverts for the first time since 2007 (i.e. before the housing market crash).

Comments on this week’s report:

  • Treasury yield spreads remain historically narrow with the 10-year minus 2-year spread sitting at 0.16%.  Meanwhile the spread between the 10-year minus 3-month inverted for the first time since 2007 as it dropped from 0.08% to -0.03%.
  • The University of Michigan’s Consumer Sentiment Index remains historically high however it has dropped 5.92% over the trailing twelve months, indicating a moderate level of risk.
  • Corporate profits have increased at a year-over-year rate of 11.15%, up from 6.15% the month prior and continues to show no sign of risk.
  • Housing starts struggle to gain traction as its year-over-year growth rate dropped from -4.57% to -9.92%, marking its fifth consecutive month of negative year-over-year growth.
  • The core Personal Consumption Expenditure (PCE) price index, a measure of inflation, recognized a reduction in its year-over-year growth rate, dropping from 1.95% to 1.79%.  However, the index still indicates 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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