Credit Flow Investor

Since stocks have been rallying from last July-Feb 2025, notice that claims have been flat. Unemployment rate (UR) follows.

Now that the stocks are in transition with market down -3% (by 3rd wk Dec) this year as opposed to +24% last year, and the recent hiccup Mar-Apr…claims start to rise again.

Even 2023 rise came from stocks -20% in 2022…

Initial Unemployment Claims also rising again…

Stocks continue rally to mid-July now…anticipating the cut….up on the rumor down on the news.

Spy will be 593 by 3rd week of May OB then small $20 pullback by end of month.

It will be a little bit above 600-605 by mid-Jul but not a new high.

DHI breaks out as predicted…

Also 2y Treasury got ahead of itself…now moving back to 12 week moving average…

by mid-Jun can return to 3.58…

Since last year…

waiting for first drop…

IT’S ALL ABOUT GROWTH NOW…NO MORE CPI.

FOCUS IS ON DROPS.

From April 29….

Proof of weakness….TECK stock…40 wkma X 100 wkma by next week…

AND 100 wkma super-cycle slope points down since March…

The Fed does not look ahead. It always looks back fighting ‘inflation’ now instead of worrying about next year.

But bonds have been quietly moving up since mid-March as growth has been dying. Short term inflation will have less and less effect on bonds moving forward.

Feb inflation in Europe was 1% but the bonds moved up anyway.

Bonds are still waiting for the first cut before ‘breaking out’. And eurodollar university says which I agree with

the Fed always does a flip-flop.

I have looked at consumer sentiment over the years and its basically useless.

BUT job sentiment appears to be the significant part of michigan sentiment before a recession…

Note how high this is BEFORE THE RECESSION!

The kid overstates everything BUT this job sentiment IS SIGNIFICANT.

JOB layoffs at government will account for less than 0.15% of payrolls

BUT this sentiment indicates the majority are now worried not just Federal workers.

growth dying…

IEF

200dma X 500 dma

Last 3 mo

ECB dropped 0.25 on Mar 6 and Apr 17…

You can judge weak economy by slope of XLE…

Construction -20% off peak….

Home builders/construction are the best indicators for the real estate cycle.

Now -20% off the peak Aug 2023.

Zillow now forecasts -1.7% drop in real estate 2025 (FIRST down year).

Bottom would be 2030….

Construction employment turns up first… ADP construction..

POSITIVE WEALTH EFFECT occurs when real estate starts slowly rising again at 4% per year after 2029.

This keeps a weak economy from slipping into recession. THE AGE OF BERNANKE:

1. THE TRIUMPH OF CAPITAL (and passive income) OVER LABOR.
2. Slow rise of real estate keeps economy slowly going.
3. Real estate is widely held.
4. Global real estate and capital marketplace now exists for the first time.
5. The construction-home builders know the real estate cycle better than anyone. Turns in the cycle are indicated there.
6. Beware massive perma-bear/nationalist propaganda which continues everywhere thanks to the internet.
7. The new cycle is 16 years up- slow at first. AND 5-6 years down…recession.
8. Everything is numbers and credentials.
9. Immigration keeps GDP rising with population.
10. Growth slowly dies as debts continue to mount. AND thereby GDP per capita falls.
11. No where do they discuss these strategies as they are politically unpalatable.
12. AND conspiracy sells although gov’t and its propaganda arms support everything above. And people are so distracted that they don’t listen to reality.
13. It all continues until money velocity hits 0 – 30-40 years from now. AND then direct lending will be entertained.