Below is a brief excerpt transcribed from today's edition of The Macro Show hosted by Macro Analyst Christian Drake.

7 Charts: Is The U.S. Economy Slowing? - 04.04.2019 the cycle cartoon

These charts show the trends as we head further into the hardest comp of the U.S. economic cycle in 3Q. 

With durables, we have...

  1. Inventory to sales ratios are at cycle highs currently
  2. Durable Good prices are accelerating and
  3. Consumer attitudes towards Durable Goods are souring. This is from the University of Michigan survey asking consumers if they anticipate buying some high ticket consumer discretionary item in the form of durables. That's making new lows.

7 Charts: Is The U.S. Economy Slowing? - 9 12 2019 11 01 01 AM

7 Charts: Is The U.S. Economy Slowing? - 9 12 2019 11 01 47 AM

7 Charts: Is The U.S. Economy Slowing? - 9 12 2019 11 05 28 AM

This directly impacts the New Orders component of Manufacturing. As you can clearly see, consumer demand is souring and new orders are falling.

You can see the relationship of New Orders to actual Durable Goods. We use Durable Goods ex-Defense and Aircraft as your proxy series that most closely aligns with what households would be ordering or purchasing. As you can see we have a great deal of catching down to do as the grey line (Durable Goods ex-Defense & Aircraft) catches the black line (ISM Manufacturing New Orders).

So domestic demand is slowing on the industrial and manufacturing side.

Meanwhile, export orders are also hitting new cycle lows. These are the lowest since the Recession.

And on this next chart we're showing export orders versus Corporate Profits from abroad. And corporate profits are heading lower as we head further into the hardest comp of the cycle in 3Q.

7 Charts: Is The U.S. Economy Slowing? - 9 12 2019 11 07 04 AM

7 Charts: Is The U.S. Economy Slowing? - 9 12 2019 11 08 29 AM

7 Charts: Is The U.S. Economy Slowing? - 9 12 2019 11 09 29 AM


You're Leaving Hedgeye Risk Management...

By selecting this link, you are now leaving the Hedgeye Risk Management (“HRM”) website. The following website contains information concerning investment products managed by Hedgeye Asset Management (“HAM”), an affiliate of HRM, or a firm partnering with HAM, and is subject to HAM’s Privacy Policy. As a separate legal entity, all HAM asset management services are made independently by portfolio managers at HAM and, as such, funds may vary from HRM research.

HRM is not responsible for the accuracy or completeness of information on external websites. HRM does not make any representation regarding the advisability of investing in any investment product or any particular investment advisory. Any opinions or recommendations from linked websites are solely those of our affiliate and are not the opinions or recommendations of HRM.

HRM DOES NOT PROVIDE PERSONALIZED INVESTMENT ADVICE OR ENGAGE IN ANY ASSET MANAGEMENT SERVICE. LASTLY, THIS LINK IS NOT AN OFFER TO BUY OR A SOLICITATION TO SELL ANY SECURITY OR INVESTMENT PRODUCT, OR THE SOLICITATION OF ANY ADVISORY SERVICES.