Macro Economic Update

GDP growth of +3.7% in July 2026 reflects the current momentum of the US economy.

The LEI at 149.85 (+0.20% MoM) signals the near-term economic direction. Sustained declines warn of slowdown risk.

The US dollar at 101.87 reflects global demand for dollar assets and influences import prices, commodity markets, and US exports.

Commodity prices as proxied by the GSCI reflect global demand conditions and supply pressures. Rising GSCI feeds into PPI and eventually CPI.

Gold at $4,168 reflects safe-haven demand, real interest rate expectations, and dollar strength. Strong YoY gains signal elevated uncertainty.

Bitcoin at $86,245 serves as a risk sentiment indicator. Its performance relative to gold signals the market's risk appetite.

CPI at 3.7% YoY in August 2026. The Fed's 2% target remains well above the current inflation rate.

PPI at 4.6% YoY is a leading indicator of consumer inflation. Rising producer prices typically pass through to CPI within 1–3 months.

Consumer sentiment at 48.1 reflects household outlook on finances and the economy. Readings below 70 historically precede spending pullbacks.

Inflation expectations at 4.0% matter enormously — the Fed monitors this closely. De-anchoring above 4% historically forces more aggressive policy response.

AAII sentiment is a contrarian indicator. Extreme bearishness (>50%) historically marks near-term market bottoms; extreme bullishness (>55%) warns of complacency.

Manufacturing PMI of 54.5 indicates the factory sector is in expansion. Manufacturing has outsized influence on employment and capital expenditure cycles.

Services PMI at 55.4 covers the dominant segment of the US economy. Sustained readings below 50 signal broad economic contraction.

Industrial production at 103.07 (+0.02% MoM) reflects the health of manufacturing, mining, and utilities. A key real-economy gauge alongside ISM surveys.

Retail sales +1.14% MoM in August 2026 reflect the consumer's willingness to spend. Consumer spending drives ~70% of US GDP — retail trends are the economy's pulse.

Payrolls of +29k in September 2026. Sustained prints below 100k/month signal labor market deterioration; above 200k signals robust demand for workers.

Vehicle sales at 16.38M SAAR are a discretionary spending bellwether. Pre-pandemic average was ~17M SAAR — levels significantly below that indicate consumer caution.

The Manheim index at 208.20 is a leading indicator for used-car CPI. Rising used car prices add directly to core CPI with a 1–2 month lag.

New home supply at 8.5 months signals a buyer's market with excess inventory. Sustained oversupply puts downward pressure on new home prices.

Mortgage rates at 7.28% remain at historically restrictive levels. Meaningful housing recovery requires rates well below 6%.

Unemployment at 4.2% is softening gradually. A move above 4.5% would significantly raise recession risk assessments.

Initial claims of 197,000K and continuing claims of 1,701,000K. Watch for sustained initial claims above 260k as the threshold for labor market deterioration.

The yield curve has un-inverted to +0.45% — normalizing from prolonged inversion. Watch whether steepening accelerates.

HY OAS at 3.24% indicates calm credit markets with tight spreads — risk appetite is healthy. Spreads above 8% historically signal systemic stress.

Put/Call ratio at 0.78. As a contrarian indicator: extreme fear (ratio >1.2) often marks near-term bottoms, while complacency (ratio <0.5) can precede corrections.

S&P 500 trading at 26.3x. Elevated P/E ratios reduce the margin of safety and make equities more vulnerable to earnings disappointments or rate shocks.