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Keep Pushing, You've Got This!

Updated: Aug 31

Happy Market Update!

Tim, enough of the doom and gloom! Fine. Let’s dive into charts this week: Why won’t we see a recession? Hold on. Hold on. This is not one of my usual tricks. Seriously, check this out. We are getting some surprises to the upside on earnings. Typically, there is no recession when this happens. Well, this isn’t going to make you read my newsletters.

More positiveness? Well, with all the rain, the fields were too wet for football. So Jackson decided to crush a swim meet! He won 3 first place ribbons. But I know for a fact he came in 2nd two times. When I demanded he be made whole, I was told he has to race against a boy above his age group, and he won in his age group. So you agree, he came in 2nd! If this continues, I’ll never get him into varsity in 8th grade. What is this planet coming to? I told Jackson Dairy Queen was not for 2nd place! Oh my God, people. Settle down. I’m kidding about DQ. Even I’m not that mean. (Probably. Maybe.)

Enough of the rosy forecast from me! That even made my stomach turn. Remember that inflation from last year (that has not stopped by the way), the dollar was moving up dramatically. Well this chart is from Jan 2022. My largest take away is that we built a base at the 100-ish level and the past 2 weeks, it’s moving back up. Well crap. Man do I need a vacation. But wait! That would be expensive.

And yes, I’m not done with talking about taxes! We are feeling the pinch together. So email me. Complain to me! I love it. I’d buy tea if I could afford it so we could dump it in the local reservoir. (Or these days in the grass since it’s raining cats and dogs). According to Axios (snip-it below from where I saw this), the average tax refund is down 8%. I had to pay…so I didn’t impact this number. But if you got less, I’m sure it’s DC taking great care of YOU. Anyone know of a class to learn tar and feathering? Takeaway? How about this: Overall, the IRS has refunded about $24.3 billion less so far in 2023 than it had refunded at the same point in 2022. Maybe everyone is just late doing taxes. HA!

Meanwhile, Tim back to what’s coming: remember that pesky 10yr-3month yield spread? Still negative. It even reached a new record low just 2 weeks ago at -1.88. We are just off those lows at -1.69 but even this chart says “holy cow!” (That’s for my older Cubs fans. And no, I do not like the Cubs.) And don’t sweat this chart! All you need to see is that when the blue line drops below the horizontal black line, a gray line appears shortly after that. The gray line? Recession. So yes, it’s coming.

If this terrifies you, don’t let it. The Fed says that we will have a soft landing and minor recession coming at best. “But Tim, what do you think?” Well, this is the lowest spread on record? And this has been negative now since October and hovering just above 0 since the middle of last summer? No chance in hell the Fed gets this right…remember they were the ones telling us inflation was transitory.

This afternoon, there was discussion that the debt ceiling might have a solution! So stocks rallied! Good for our 401ks and IRAs. Did we think it would end any other way? It’s not over…but this should not be a surprise. Stocks like to see anything that will help it move up. Great! But again, don’t let DC make you think it was ever not going to get raised. See last week’s newsletter…but this is for the worry warts out there. I especially like the Jamie Dimon use if “probably”. Hahahaha But drama sells in this country.

Speaking of drama, and of people who like to hear themselves talk…and no, I don’t mean me. Come on, newsletter fans! Think better of me, please. Look at this list. This week we had or still have a total of 14 Fed members speaking. Even I don’t want to go listen to these people speak. That’s right…it’s because there won’t be charts.

Just stop talking. Seriously, shut the hell up.

10yr: Today we are looking at a daily chart from Jan 1. Each candlestick is one day. My red arrow clearly shows we are moving sideways. Probably because of these yahoo’s speaking all the time…and literally doing not enough to help. But you can see towards the right, we are getting short moves up and down. So we are not fully bored here at the office. I’d lock loans if the 10yr breaks above 3.61. By the way, did you notice that once again, last week, we bounced off that 3.36 orange horizontal line? Good Lord.

MBS: Same sideways movement. Yawn.

Listen, I’m all for my kid winning. Hell, I’m all for the right person winning. So I only kind of joke about coming in 2nd. He wasn’t far off from winning both races…and I’m pretty sure the other kid was 2 years older. If you don’t know much about young kids, 4 and 6 are WAY different. But it should push him. Why? Because the first thing he asked me in all 3 races (he flat out won the 3rd one), was if he won. I told him no twice. He took it like the champ he is. But guess what? He finished first in freestyle and shaved off 10% of his fastest time. When was the last time you shaved off 10% of a time in exercise? I don’t remember either. But he popped his head up and asked if he won, I said you did! He said “cool”. And walked by. Yeah son, that was cool.

Tim Lindsey

Originating Branch Manager

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