Early Thursday, amid a global flight-to-safety, 10-year US yields touched 2.345%, just a shade above the lows hit during the late-March growth scare. 30-year yields fell to the lowest since January 2018. Subsequently, the flash read on the Markit US manufacturing PMI for May came in at 50.6, just barely above contraction territory, well below estimates (52.6) and the lowest since September of 2009. New orders fell to 49.7 versus 53.5 in April. The services and composite gauges were disappoint
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5 thoughts on “Misery.

  1. Trying to reconcile this with what Charlie said yesterday and am seeing a fuzzy picture…..Tough second guessing him though based on recent prognostications .

  2. You can think the China/US trade spat will abate. The problem is that recent news suggests it is not going to be that fast a resolution- even if Xi meets Trump at the G-20 in June and there is a reset, there has been 2 months of damage to sentiment and the scars to confidence are becoming grave- even if the problems are somewhat resolved. Throw in the idea that if China is solved Trump may still turn on Europe and Japan on autos and other trade and you have a recipe for a nice correction in risk assets and likely a continued slowdown in the US and world economy.

  3. BofA: “The Fed has abandoned both the hiking cycle and balance sheet run-off.”
    Fed Assets
    1/15/19 $4,050 billion
    2/13/19 $4,028 billion
    3/13/19 $3,971 billion
    4/10/19 $3,936 billion
    5/15/19 $3,864 billion

    I guess that’s what it looks like when the Fed abandons the balance sheet run-off.

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