Control Panel: Signal? Noise?

Since the Federal Reserve held the fed funds rate stable in June, the markets predict one, and possibly two, additional rate raises in 2023, followed by rate cuts in 2024.

Last week was quiet. There was little market action and it was more likely to be noise than signal.

The trade was slightly risk-off and the Fear & Greed Index declined to Greed.

The Conference Board Leading Economic Index® (LEI) for the U.S. continued to fall in May as a result of deterioration in the gauges of consumer expectations for business conditions, ISM® New Orders Index, a negative yield spread, and worsening credit conditions. The US Leading Index has declined in each of the last fourteen months and continues to point to weaker economic activity ahead. Rising interest rates paired with persistent inflation will continue to further dampen economic activity.

But the economy is still growing. Waiting for the next recession has been like waiting for Godot.

Initial unemployment claims are rising but the level is still very low. There are still about 2 job openings for every unemployed person seeking work.

The METAR for next week is partly sunny. There’s no “new news” to push the market so there could be some noise.