Sonu Varghese @sonusvarghese Twitter profile

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Sonu Varghese

8 months

🔥Hot off the press 🔥 Our 2024 Outlook 🙌 Not as contrarian as last year, when we said there’d be no recession and stocks would rebound. But in key areas we're still going against conventional wisdom. Take a read 👇 @CarsonResearch @RyanDetrick

Carson Investment Research Releases Its 2024 Market Outlook: Seeing Eye to Eye

Most strategists missed the underlying strength in the economy, leading to too much pessimism about stocks in what turned out to be a strong year.

www.carsongroup.com

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Sonu Varghese

@sonusvarghese

1 year

On yield curve inversion, and recessions, via @AQRCapital 1. It’s not worked in other countries. 2. Inversion is simply a sign of expected rate cuts. Curve inverted now because policy is tight, but expected to ease. Recession is not the only path to lower rates.

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Sonu Varghese

@sonusvarghese

3 years

Of the S&P 500's 26.9% price return in 2021, Earnings growth: 34.5% Multiple growth: -7.6% Via JPM Guide to Markets

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Sonu Varghese

@sonusvarghese

26 days

Another clue this is likely degrossing rather than a risk-off sell-off… the dollar index is down as well

Conor Sen

@conorsen

26 days

I would not have thought this combination of market movements was possible — definitely not downplaying the macro but this is more of a pure vol/Japan/tech event than anything:

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Sonu Varghese

@sonusvarghese

5 years

That didn't take long - hospitals sue to keep prices a secret. Part of their argument: “Some members worry about the ability of their websites to function at all with such a large file” Hard to put a large spreadsheet online! cc @Jesse_Livermore

Hospital Groups Sue to Block Price-Transparency Rule

Hospital groups sued to block a Trump administration rule forcing them to disclose secret rates, laying out the industry’s legal strategy to defeat the president’s central health-policy initiative.

www.wsj.com

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Sonu Varghese

@sonusvarghese

3 years

@M_C_Klein This part seems especially relevant to all the back n forth going on today

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Sonu Varghese

@sonusvarghese

9 months

CPI data was better than headline suggests 🧵 Headline up 0.1% m/m in Nov 3M: 2.2% (annualized) 6M: 3.1% 12M: 3.1% But this is all about shelter & its lags. CPI Ex Shelter: -0.5% m/m in Nov 3M: -2.5% 6M: 0.4% 12M: 1.4% (< 2% for 6 months) 👌 @CarsonResearch @RyanDetrick 1/

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Sonu Varghese

@sonusvarghese

6 months

10 years ago today I was part of one of the most amazing ceremonies … my US citizenship oath ceremony (which I highly recommend if ever you get a chance to watch). Unforgettable experience, and am ever grateful for America & its people 🙏🏿 The American Dream is my reality 🇺🇸

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Sonu Varghese

@sonusvarghese

5 months

Ouch, that was a hot inflation report 🔥 Headline: 1M: 0.4% 3M: 4.6% (annualized) 6M: 3.2% 12M: 3.5% But "core" problem remains shelter. CPI ex shelter 3M: 3.8% 6M: 2.1% 12M: 2.3% @CarsonResearch @RyanDetrick 1/

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Sonu Varghese

@sonusvarghese

21 days

The pushback begins … Amazing that several Fed governors likely aren’t even ready for a 25bps cut in September 🤦🏽‍♂️ This is going to be quite the push and pull between markets and the Fed over the next few weeks 👎 And if CPI is even a tad hotter than expected … brace

Sonu Varghese

@sonusvarghese

24 days

Markets pricing in 71% probability of a 50 bps cut in September. And ~ 112 bps of cuts in '24. Meanwhile, dot plot is at 2 cuts. If the Fed isn't inclined to do a 50 bps in September, they're gonna have to talk down the probability of that to zero over next 4 weeks 🤔

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Sonu Varghese

@sonusvarghese

7 months

A narrative shift with hotter than expected CPI 🧵 Blame this on 1) January price adjustments 2) Shelter Headline CPI 1M: 0.3% 3M: 2.8% (annualized) 6M: 3.3% (annualized) 12M: 3.1% CPI ex Shelter 1M: 0.1% 3M: 1.1% 6M: 2.1% 12M: 1.6% @CarsonResearch @RyanDetrick 1/

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Sonu Varghese

@sonusvarghese

3 years

@TheStalwart Reading Obama’s biography, it’s striking how much of the economic/financial decision making fell on Summers/Geithner. So all of this stuff sounds like an implicit defense of what they did in 2009-2010.

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Sonu Varghese

@sonusvarghese

3 months

The consumer is still in good shape 👍 In fact, most US households have come out ahead of inflation since the pandemic hit ... More in my new blog 👇 Sign up there for more from @RyanDetrick @CarsonResearch

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Sonu Varghese

@sonusvarghese

8 months

Some thoughts on CPI data 🧵 Disinflation is happening, but CPI is mostly about shelter. Headline CPI Last 3M: 1.8% (annualized) 6M: 3.3% 12M: 3.4% CPI Ex Shelter Last 3M: 0.1% 6M: 2.3% 12M: 1.8% Inflation is at 2% 🙏 @CarsonResearch @RyanDetrick 1/

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Sonu Varghese

@sonusvarghese

7 months

Another big productivity growth number w/ Q3 @ 3.2% 💪 Last 3 qtrs annualized: 3.9% 🔥 2020 - '23 Q1: 1.0% 2005 - '19: 1.5% 1996 - '04: 3.1% Potential game changer 🤞 With productivity growth, you can have strong wage growth & low inflation @CarsonResearch @RyanDetrick 1/

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Sonu Varghese

@sonusvarghese

5 months

Interesting details in the GDP data release today ... Manufacturing contribution to real GDP growth - Q4 '24: 85 bps (headline 3.4%) Q3: 92 bps (4.9%) Construction contribution - Q4: 26 bps Q3: 65 bps Yet, PMIs < 50 & LEI said "recession" 🤦‍♂️ @CarsonResearch @RyanDetrick

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Sonu Varghese

@sonusvarghese

5 months

Dovish details in Fed's dot plot 👇 Still projecting 3 cuts (2024), despite - Upgrading their 2024 GDP growth from 1.4% to 2.1% 💪 - Increasing core PCE projection from 2.4% to 2.6% - Raising nominal GDP growth expectation from 3.8% to 4.5% 😱 @RyanDetrick @CarsonResearch

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Sonu Varghese

@sonusvarghese

3 months

Good news on inflation 🙏 Looking at breadth of core PCE categories (178), there's progress. Even in 2024 👍 Share with 4%+ y/y inflation Dec '19: 10% Jun '22: 58% Dec '23: 42% Apr '24: 33% Share in deflation y/y Dec '19: 28% Jun '22: 13% Dec '23: 21% Apr '24: 30% More 👇

Ryan Detrick, CMT

@RyanDetrick

3 months

How is inflation looking? @sonusvarghese tales a look and things continue to improve. Nice blog to end the week. @CarsonResearch

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Sonu Varghese

@sonusvarghese

2 months

NVIDIA up ~7% today! Ignoring recent gyrations, what’s amazing is the incredible earnings growth driving returns. From 1/1/23-6/21/24, the stock is up 767%. 700%-pts is from earnings growth 🔥 More in my new blog 👇 @CarsonResearch @RyanDetrick

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Sonu Varghese

@sonusvarghese

18 days

PPI was soft & under the hood, wholesale/retailer margins aren't rising (PPI "trade services") Combine with forward-looking measures 👇 Consumer inflation expectations normal Business expectations normal Market expectations ~ 2% There's no inflation problem! @RyanDetrick

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Sonu Varghese

@sonusvarghese

8 months

Quite a year for markets & the economy 🙌 S&P 500 25%+ Real GDP growth > 2.5% UE rate < 4% Inflation lower A lot of focus on consumer strength (rightfully) 💪 But here’re 3 positive manufacturing stories going into 2024 👇 @CarsonResearch @RyanDetrick

3 Positive Manufacturing Stories to Take Into 2024

We’re just days away from closing out 2023, and from an economy and markets perspective, the year really couldn’t have gone better.

www.carsongroup.com

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Sonu Varghese

@sonusvarghese

3 months

A very welcome CPI report 🙏 Headline soft @ 0% 3M: 2.8% (annualized) 12M: 3.3% Core also soft @ 0.16% (2% annualized 🙌) 3M: 3.3% 12M: 3.4% Shelter continues to keep CPI elevated. Headline Ex Shelter @ -0.22% 3M: 1.7% 12M: 2.1% @CarsonResearch @RyanDetrick 1/

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Sonu Varghese

@sonusvarghese

4 months

Interesting week ... S&P 500 -3.1% Nasdaq: -5.5% But Dow Flat! 8 of 11 sectors outperformed the S&P 500. As did mid caps, small caps, and value. @RyanDetrick

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Sonu Varghese

@sonusvarghese

8 months

Good reasons to be jolly 🎅 - Stocks up - Gas prices down - Mortgage rates easing - Unemployment low - Home values higher - Savings accounts yield > 5% 🙂 Consumer confidence is rising 👏 More in my new blog 👇 @CarsonResearch @RyanDetrick End/

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Sonu Varghese

@sonusvarghese

2 years

@conorsen @kylascan Would add Chicago too, especially downtown and near north side. Chicago downtown is the fastest growing downtown in the nation

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Sonu Varghese

@sonusvarghese

10 months

Huge productivity gain for Q3: +4.7% (2.2% y/y) 💪 Since 2020, productivity: 1.4% 2010-2019 trend: 1.2% Could be a game-changer for the economy & inflation. If it continues ... Wage growth = Productivity + Inflation + Change in Labor Share Mid-late '90s saw strong wage

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Sonu Varghese

@sonusvarghese

9 months

Fed laid out their reaction function in the dots ... 3 cuts in '24 assuming 2.4% core PCE 4 (more) cuts in '25 w/ core PCE @ 2.2% Markets pricing in 6 cuts in '24. Not far-fetched given dots & expected inflation. Plus some (low) odds for slower growth🤔 Core PCE @ 2% (3M/6M)

Ryan Detrick, CMT

@RyanDetrick

9 months

Excellent summary by @sonusvarghese of the quickly evaporating inflation problem and what it means for the Fed. Think ✂️ @CarsonResearch

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Sonu Varghese

@sonusvarghese

6 months

CPI inflation was firmer but positives under the hood 🤞 Headline - Feb: 0.4% 3M: 4.0% (annualized) 6M: 3.2% 12M: 3.2% It really is about shelter 🤦‍♂️ CPI ex shelter - 3M: 2.9% 6M: 1.8% 12M: 1.8% Which is ... not too bad 🤔 @CarsonResearch @RyanDetrick 1/

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Sonu Varghese

@sonusvarghese

13 days

@talmonsmith 🤔

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Sonu Varghese

@sonusvarghese

8 months

All this 👇, plus Gas prices falling Mortgage rates falling Oh .. and you can still get 5%+ in those savings accounts. For now ... Things in place for consumer confidence to continue rising.

Americans are Feeling More Jolly

It’s been a puzzle as to why Americans seem to be in a funk, despite strong economic growth, low unemployment, rising incomes (even after adjusting for inflation), and even strong consumption trends.

www.carsongroup.com

Ryan Detrick, CMT

@RyanDetrick

8 months

How bad are things? Stocks at all-time highs Gold at all-time highs Home values at all-time highs Bonds up 5% for the yr after a historic two yr bear Net wealth at all-time highs Debt relative to incomes no where near historic highs Things appear to be better than most think.

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Sonu Varghese

@sonusvarghese

10 months

Something striking 👍 CPI ex shelter is running at 1.5% y/y Last 3M: 1.6% (annualized) Last 6M: 1.6% And yes, this includes food & energy. This is probably as representative as it can get for inflation faced by majority of US households i.e. 66% of whom are homeowners.

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Sonu Varghese

@sonusvarghese

2 months

Good news on personal incomes 💪 Last 3M (annualized) Disposable income: +4.9% Employee comp: +5.8% PCE inflation: +2.4% Since Feb '20 Disposable income: +26% Employee comp: +25% Inflation:+18% Real income ex transfers 3M: +2.5% Feb '20: +6% @CarsonResearch @RyanDetrick 1/

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Sonu Varghese

@sonusvarghese

11 months

A better CPI report than the headline suggests 🤔 Headline CPI - 1M: 0.4% 3M: 4.9% (annualized) 12M: 3.7% Drag from energy is done. But we're seeing disinflation elsewhere, including groceries. Also, lower gas prices = softer Oct CPI @CarsonResearch @RyanDetrick 1/

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Sonu Varghese

@sonusvarghese

4 months

The Carson LEI for the US still points to above trend growth, and far from recession. Much more in my new blog 👇 @CarsonResearch @RyanDetrick

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Sonu Varghese

@sonusvarghese

9 months

Some thoughts on the payroll report 🧵 Solid employment + Solid wage growth + Normal hours = Strong aggregate incomes (+4.7% annualized last 3M)💪 With inflation pulling back, that means strong real incomes (~ +2.8% annualized last 3M) 👌 @CarsonResearch @RyanDetrick 1/

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Sonu Varghese

@sonusvarghese

1 year

The S&P 500 is up 20% from its October low, after falling 25%. Leaving it 10% below the Jan 3rd, 2022 peak (volatility math!). What next? @RyanDetrick (who's been calling the Oct low for a while now) has a great piece on the @CarsonResearch blog.

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Sonu Varghese

@sonusvarghese

3 months

@talmonsmith “Don’t take Trump literally”

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Sonu Varghese

@sonusvarghese

9 months

Powell really didn't push back on a dovish dot plot 🎅 Members project 3 rate cuts in 2024. Rate projections - 2024: 4.6% (vs 5.1% in Sep) 2025: 3.6% (vs 3.9%) Comes on the back of lower core PCE estimates 2024: 3.2% 2025: 2.4% @CarsonResearch @RyanDetrick 1/

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Sonu Varghese

@sonusvarghese

7 months

New all-time high on the S&P 500 price index 🙌 First since Jan 3rd, 2022. A lot's happened since then 😱 Fed Funds rate was 0-0.25%; now 5.25-5.50% 10-year yield was 1.63%; now 4.13% Real 10-year yield was -0.97%; now 1.80% UE rate was 4.1%; now 3.7% Prime-age employment

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Sonu Varghese

@sonusvarghese

5 months

Single-family housing activity💪 Starts: +35% y/y (Feb '24) Permits: +30% Multi-family struggling. But single-family is ~ 40% of residential investment in GDP Total units under construction up 45% from 2019 average And we're talking about when, not if, rate cuts will come 🙌

Ryan Detrick, CMT

@RyanDetrick

5 months

Building permits up 1.9% and at a six month high. Single family permits highest since May '22. Permits are a nice leading indicator and yet another sign of a healthy overall economy.

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Sonu Varghese

@sonusvarghese

1 year

@awealthofcs Dare we say the T word?

Bespoke

@bespokeinvest

1 year

CPI and PPI have fallen faster than they went up.

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Sonu Varghese

@sonusvarghese

4 months

New record high for S&P 500 not the same as prior high 👇 On 3/28 YTD price return: 10.2% EPS growth: 3.1%-pts (pp) P/E change: 7.1 pp 5/15 YTD: 11.3% EPS: 5.3 pp P/E: 6.0 pp New record powered by earnings growth! But its about margins 👇 @CarsonResearch @RyanDetrick 1/2

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Sonu Varghese

@sonusvarghese

3 years

@TheStalwart So thankful that he is nowhere close to the policy making apparatus now. And to think he could’ve been - what a bullet dodged.

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Sonu Varghese

@sonusvarghese

4 years

This is the 10th bear market for the S&P 500 (price index) since 1950. Few notes on the nine previous ones 👇 1/

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Sonu Varghese

@sonusvarghese

4 months

Soft but not too soft Strong but not too strong 👌 That was the story of the April jobs report 🧵 Payrolls +175k in April Last 3 months avg: +242k 2023 Feb-Apr avg: +237k 2019 avg: 166k Soft, but not weak! @CarsonResearch @RyanDetrick 1/

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Sonu Varghese

@sonusvarghese

8 months

Excellent data day, incl. inflation but also incomes/consumption/investment 👌 PCE inflation basically at Fed's target 😊 Headline PCE Last 3M: 1.4% 6M 2.0% 12M: 2.6% Core PCE 🙌 3M: 2.2% 6M: 1.9% Core Services ex Housing 3M: 2.3% 6M: 2.6% @CarsonResearch @RyanDetrick 1/

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Sonu Varghese

@sonusvarghese

9 months

Consensus right now for 2024 - Markets: average returns Economy: soft growth/mild recession We have a slightly different take, which @RyanDetrick and I will talk about tomorrow (Tuesday, 12/19 @ 1pm CT) Register 👇 @CarsonResearch @CarsonGroupLLC

Florian Kronawitter

@fkronawitter1

9 months

🇺🇸 Thirteen economists, NO ONE has acceleration on their bingo card So guess that's what we'll get... h/t @darioperkins

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Sonu Varghese

@sonusvarghese

24 days

Markets pricing in 71% probability of a 50 bps cut in September. And ~ 112 bps of cuts in '24. Meanwhile, dot plot is at 2 cuts. If the Fed isn't inclined to do a 50 bps in September, they're gonna have to talk down the probability of that to zero over next 4 weeks 🤔

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Sonu Varghese

@sonusvarghese

2 months

To @RyanDetrick 's point 👇 From 12/31/22 - 6/20/24, NVIDIA is +795% Of which Earnings growth: +715%-pts Multiple growth: +80%-pts This year has been more about multiple growth YTD (6/20): 164% Earnings: +71%-pts Multiples: +93%-pts Class of its own versus the other "Mag 6"

Ryan Detrick, CMT

@RyanDetrick

2 months

Always a fun Friday night when I can join @contessabrewer on @LastCallCNBC . We talked about what else? $NVDA!

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Sonu Varghese

@sonusvarghese

4 months

Encouraging CPI report in April😌 Headline: 0.3% m/m (0.4% expected) 3M: 4.6% (annualized) 6M: 3.7% 12M: 3.4% Core: 0.3% m/m 3M: 4.1% 6M: 4.0% 12M: 3.6% CPI still elevated by shelter 🤔 Also, auto insurance added 6 bps to April m/m core CPI @CarsonResearch @RyanDetrick 1/

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Sonu Varghese

@sonusvarghese

13 days

S&P 500 up 17.5% YTD on 8/16 2.2% off record high (7/16) But, NTM EPS moved up & now contributes more to YTD return YTD: 17.5% EPS growth: 9 %-pts Multiple: 7.5 pp Dividends: 1 pp Margin expansion a big driver of EPS growth, and returns @RyanDetrick @CarsonResearch

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Sonu Varghese

@sonusvarghese

11 months

Good riddance September! But we did get a lot of great economic data to end the month. 🧵 Last 3 months (annualized) - Core PCE inflation: 2.2% Core services ex housing: 3.4% Rate hike probabilities Nov: < 15% Dec: < 40% Fed is done 🙏 @CarsonResearch @RyanDetrick 1/

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Sonu Varghese

@sonusvarghese

9 months

From Dec 31st, 2018 through Dec 13th, 2023, the S&P 500 gained over 100%! Stocks doubled over 5 years, amid - A worldwide pandemic - Highest inflation in 40+ years - Surging rates What could be next? New blog 👇 @CarsonResearch @RyanDetrick

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Sonu Varghese

@sonusvarghese

5 months

Via PPI data ... Core PCE likely softer than core CPI, thanks to softer motor vehicle insurance 🤞 But some heat will come from portfolio management, thanks to higher stock prices (esp y/y) 🤦‍♂️ Also, retail/wholesale margins starting to improve (comes from PPI - trade

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Sonu Varghese

@sonusvarghese

6 months

New blog looking at how the economy is working for lower income workers 👇 Balance sheets look better across income groups 👍 Real wage growth has been stronger for non-managers, vs managers. Both accelerating recently 🤞 @CarsonResearch @RyanDetrick

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Sonu Varghese

@sonusvarghese

2 months

Great news with June shelter inflation rising at the slowest pace in 3 years 🥂 What's amazing is how shelter is still propping up CPI 🤦‍♂️ Headline CPI 3M: 1.1% (annualized) 6M: 2.8% 12M: 3.0% CPI ex shelter 🙌 3M: -0.5% 6M: 1.6% 12M: 1.8% @CarsonResearch @RyanDetrick

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Sonu Varghese

@sonusvarghese

1 year

Fed leaves rates unchanged, but big shifts in their projections. They increased their 2023 GDP growth projection from 1% to 2.1% 💪 2024: Up from 1.1% to 1.5% Clearly acknowledging a stronger economy, which also means higher rates for longer! @CarsonResearch @RyanDetrick 1/

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Sonu Varghese

@sonusvarghese

11 months

Finally, soft data catching up to hard data 👍 September ISM PMI - Headline: 49.0 (+1.4) Production: 52.5 (+2.5) New orders: 49.2 (+2.4) Employment: 51.2 (+2.7) Prices down 4.6 points to 43.8 👌 Meanwhile, manufacturing production up 2% YTD (Aug). @RyanDetrick about time 😁

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Sonu Varghese

@sonusvarghese

6 months

Unemployment rate rose from 3.7% to 3.9% That was due to higher UE rates for young workers 16-19 yrs: 10.6 to 12.5% 20-24: 5.9 to 7.2% 25+: 3.2% unchanged Prime-age employment participation rate up to 80.7% Higher than at any point from Jul '01 - Feb '20 💪 @RyanDetrick

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Sonu Varghese

@sonusvarghese

1 year

- PMIs ticking higher (no sign of bank stress in comments) - New home sales & single family starts/permits rising - Oil & food prices moving down = real income growth - Auto sales up 7% in March & highest level since Jun ‘21 😱 Things are … ok? @RyanDetrick @CarsonResearch

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Sonu Varghese

@sonusvarghese

11 months

All in all, good riddance to August & September. 🥂 for Q4 starting, albeit with a shutdown 🤦‍♂️ But seasonality moves in the bulls favor as we gear up for Q4. Perhaps more so when Aug-Sep are down. More from @RyanDetrick 👇 /End

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Sonu Varghese

@sonusvarghese

2 months

Kudos to @employamerica @IrvingSwisher for nailing May core PCE @ +0.08% 🙌 Looking at breadth of core PCE categories (178), there's lot of progress. Even in 2024 👍 Share with 4%+ y/y inflation Dec '19: 10% Jun '22: 58% Dec '23: 42% May '24: 35% Share in deflation Dec '19:

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Sonu Varghese

@sonusvarghese

4 years

The 2020 stock market recovery should not be surprising given the V-shaped recovery in corporate profits, which are now higher than they were at the end of 2019 (h/t @lhamtil ). Thread on what drove this, using sectoral balances & Levy-Kalecki 👇 1/

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Sonu Varghese

@sonusvarghese

4 months

The Q1 GDP report masked underlying strength. Cyclical investment is rebounding 👍 But don’t discount the fact the consumer remains strong 🙌 More in my new blog 👇 Sign up there for our weekly newsletter @CarsonResearch @RyanDetrick

Underlying Economic Growth Is Strong, and Here Are 5 Reasons Why

Headline GDP growth in the first quarter disappointed, but underlying growth was actually quite strong. The good news is that the cyclical areas of the economy are seeing strong growth despite the...

www.carsongroup.com

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Sonu Varghese

@sonusvarghese

2 months

There's always a question about luck when it comes to investing, and how much it matters. @RyanDetrick and I spoke to Prof. Jeremy Siegel about this recently, and my latest blog is about how to positively expose yourself to luck while investing 👇

How Does One Positively Expose Themselves to Luck While Investing?

The title was actually a question I put to Professor Jeremy Siegel when Chief Market Strategist Ryan Detrick and I hosted him on a live Facts vs Feelings episode recently.

www.carsongroup.com

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Sonu Varghese

@sonusvarghese

13 days

Probability of Fed cutting 50 bps in Sep fell from 75% on Aug 5 to 25% on Aug 16 But S&P 500 rallied 7% as we got +ve data 👇 8/8: +2.3% (Claims) 8/13: +1.7% (PPI) 8/15: +1.6% (Claims, Retail Sales) Markets still expecting ~ 100 bps cuts in '24 @CarsonResearch @RyanDetrick

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Sonu Varghese

@sonusvarghese

4 months

Well, the duct tape held throughout the flight 🙌 Some really good duct tape it is, considering it’s holding together part of the engine pod! Glad it can be used in a pinch when screws aren’t available …

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Sonu Varghese

@sonusvarghese

1 month

Obvious parallels between 2024 & 1968 (incl Chicago as Dem convention venue) So '68 redux? 1968 was a crazy year but we also saw monetary & fiscal tightening (tax hikes, spending cuts), and ... S&P 500 +11% New blog 👇 @CarsonResearch @RyanDetrick

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Sonu Varghese

@sonusvarghese

1 year

Atlanta Fed Q2 GDP nowcast at 2.4%. - Final demand at 2.5% - No drag from residential investment! If nowcast is right, we'd have: - 2.6% real GDP growth over the past year (> than pre-pandemic growth) - 3.6% UE rate While Fed Funds > 5% 🤷‍♂️ @CarsonResearch @RyanDetrick

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Sonu Varghese

@sonusvarghese

1 month

Why inflation is heading lower even as growth remains fairly strong 👇

Skanda Amarnath

@IrvingSwisher

1 month

Thru Q2, productivity growth likely ran ~2.5% year-over-year Outside of recession-distorted periods, productivity growth tends to be highest in the US during periods most closely aligned w/ full employment. Full employment can support both equity and efficiency over time.

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Sonu Varghese

@sonusvarghese

3 months

One thing that came out of today's labor report: aggregate income growth ~ 6% annualized over the past 3 months. That's strong, but not red-hot. also suggests strong nominal GDP growth. Much more in my new blog 👇 @CarsonResearch @RyanDetrick

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Sonu Varghese

@sonusvarghese

1 year

Been saying the economy will avoid a recession this year, and stocks will rebound. But we're also thinking about risks & this new blog gets into a big one: energy prices. Shoutout to @IrvingSwisher for their amazing work🙏 @CarsonResearch @RyanDetrick

Thinking About Risks to The Outlook

We started the year believing the economy would avoid a recession and that markets would rebound, and everything that’s happened since has mostly reinforced that view, which we outlined in our...

www.carsongroup.com

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Sonu Varghese

@sonusvarghese

7 months

Some serious factor rotation! In one day, the Blackrock U.S. Equity Factor Rotation ETF $DYNF has seen inflows of $1.9 bil ... More than twice the net flows into all the Bitcoin ETFs IYKYK

James Seyffart

@JSeyff

7 months

Update for day 10 of the #Bitcoin ETF Cointucky derby. Volumes and flows are both slowing down a bit. Another slight negative day on flows. Total net flows stand at +$744 million. $IBIT likely crosses 2 billion in assets today

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Sonu Varghese

@sonusvarghese

1 year

100 trading days into the year! The momentum is good, given the 7%+ return for the S&P 500 through the first 100 days of the year. Even better: Nasdaq at a 52-week high. Great piece by @RyanDetrick

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Sonu Varghese

@sonusvarghese

7 months

👇 is the real "dry powder" Plus, households (aggregate) became less levered in 2023 Household debt grew $988 Bil Disposable income grew $1.33 Tr In 2019 Household debt grew $601 Bil Disposable income grew $430 Bil

Ryan Detrick, CMT

@RyanDetrick

7 months

The economy is growing 'only because consumers are maxing out their credit cards' is one we hear all the time. Again, look at the data, it simply isn't true. Credit card debt as a % of available credit is 24%, right back to pre-Covid levels. Another gem from @sonusvarghese

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Sonu Varghese

@sonusvarghese

9 months

👇 And even if you ignore the whole "excess savings" concept .... Household holdings of cash/liquid equivalents (checking + saving + money market funds) are ~ $2.7 Tr above what you'd expect with the pre-pandemic trend. And ~ $1.4 Tr above trend if you take out MMFs.

Ryan Detrick, CMT

@RyanDetrick

9 months

Although it probably doesn't even make sense to look at 'excess savings' anymore, the bottom line is there are a few ways to look at it. @sonusvarghese breaks it down here and safe to say households still have at least $1T in extra savings stored up.

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Sonu Varghese

@sonusvarghese

9 months

@_SofiaBaig_ Would be interesting if it was framed as “would you still want prices to go down if it meant a recession that increased the likelihood of you losing your job”?

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Sonu Varghese

@sonusvarghese

23 days

Claims data reduce left tail risk, which is why equities rallied Non-seasonally adj. data 👇 Initial claims are low (~ 2022-'23) Insured unemployment rate (cont. claims as % of covered employment) a tick above 2018-'19 Hiring is down, but layoffs still low 👍 @RyanDetrick

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Sonu Varghese

@sonusvarghese

4 months

Thoughts on the Fed meeting in my new blog ... Ultimately, Fed keeps their eye on the big picture: inflation has eased but remains elevated. One way to look at it is distribution of PCE categories 👇 @CarsonResearch @RyanDetrick

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Sonu Varghese

@sonusvarghese

1 year

Big upward revision to Q1 GDP, from 1.3% to 2%. A big upward revision in net exports (more export growth, less import growth). But services spending also revised higher, from 2.5% to 3.2% in Q1. Domestic demand: 3.5% (3.3% prior) @CarsonResearch @RyanDetrick 1/

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Sonu Varghese

@sonusvarghese

1 year

"If my stock portfolio is rising and home prices are climbing, I don't feel like I need to be saving as much." Neil Dutta @RenMacLLC makes a great point about savings rates & net worth. 1980s-2000s: Savings rates fell as net worth rose 2010s: Period of balance sheet repair

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Sonu Varghese

@sonusvarghese

6 months

@Ritholtz Not to mention the fact that there’s an unconditional 15% probability of anything happening in markets every year!

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Sonu Varghese

@sonusvarghese

5 months

Retail sales 🔥 +0.7% in March, despite lower auto sales +3.2% in Q1 (annualized) Thanks to surging online sales. Control group sales +1.1% in March +5.6% in Q1 💪 Meanwhile ... CPI - commodities ex food and energy: -1.4% in Q1 (annualized) @CarsonResearch @RyanDetrick

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Sonu Varghese

@sonusvarghese

6 months

$NVDA is simply in a class of its own 😱 From 1/1/22 - 2/21/24, returns were driven by earnings growth for the S&P 500 & Mag 7 (some not so magnificent btw) But $NVDA on steroids 🔥 Of its 130% return Earnings: +231%-pts Multiples: -101%-pts @RyanDetrick @CarsonResearch

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Sonu Varghese

@sonusvarghese

1 year

"I think the biggest mistake you can make in macro is just assuming that relationships in the economy are stable from one cycle to the next." This Facts vs Feelings episode that @RyanDetrick & I got to do with Neil Dutta of @RenMacLLC was 👌

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Sonu Varghese

@sonusvarghese

8 months

Our biggest active bet in 2023 was overweighting cash & being significantly underweight duration. Even post-SVB. Looking back, it was bang on top of our 2023 outlook &. came right out of our call for no recession in 2023. Note: OW equities was the biggest bet in our

Ryan Detrick, CMT

@RyanDetrick

8 months

The @CarsonResearch team came into this year expecting no recession, OW equities and expected a nice rally. We are more proud of our bond call though. We were UW bonds and had no treasuries with a little intermediate bonds at the start of '23. We expected a stronger economy

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Sonu Varghese

@sonusvarghese

1 year

The recession keeps getting delayed. Consumption up 0.8% in April, double expectations. Real consumption up 0.5% ~ 6% annualized rate. Goods spending jumped (autos), but even services running strong. Real consumption still slightly > trend. @RyanDetrick @CarsonResearch 1/

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Sonu Varghese

@sonusvarghese

11 months

Cracked! Pump prices are holding steady despite surging oil prices. And they could be heading lower, which will be another tailwind for real incomes. Here’s a new blog on why 👇 @CarsonResearch @RyanDetrick

That’s Cracked! Consumers May See Relief at the Pump Despite High Oil Prices

The problem with rising energy prices is that they can adversely impact the economy in several different ways.

www.carsongroup.com

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Sonu Varghese

@sonusvarghese

1 year

This blog has been a while coming ... discussing our own custom leading economic index, which we developed over a decade ago. Read how it's different from the Conference Board's version, and what it's telling us today. @RyanDetrick @CarsonResearch

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Sonu Varghese

@sonusvarghese

1 year

Headline CPI: 0.1% m/m Core CPI: 0.4% Over the past 3 months (annualized) Headline: 2.2% (lowest since Nov '20) Core: 5.0% Households experience headline inflation. So, households are seeing real income gains & keeping consumption humming. But Fed focused on core.

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Sonu Varghese

@sonusvarghese

2 years

Not only did foreigners want dollar claims, they were even happy to get almost zero yield for them - and entirely covered America’s $860B current account deficit in 2021. A fascinating read from ⁦ @M_C_Klein ⁩

Last Looks at the Pre-War World (3): The Return of "Exorbitant Privilege"?

Americans financed large trade deficits as well as large net purchases of valuable foreign investments in 2021 by printing money and by issuing low-yielding safe assets.

theovershoot.co

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Sonu Varghese

@sonusvarghese

7 months

This 👇 Real incomes ex transfers up 3.1% y/y. Running at 4.3% annualized pace over the last 3 months 💪 It's not about more credit-fueled spending!

RenMac: Renaissance Macro Research

@RenMacLLC

7 months

Not a crazy consumer. For all the talk about consumers dipping into savings and going off the rails with credit cards, real incomes ex transfers rose 3.1% while consumer spending rose 3.2%. Indeed, the saving rate rose a touch last year. Consumers are supported by income growth.

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Sonu Varghese

@sonusvarghese

6 months

This 👇 Auto sales more important than ISM PMI

RenMac: Renaissance Macro Research

@RenMacLLC

6 months

Unit auto sales strengthened to 15.81 million units SAAR in February, according to data from Wards. This unwinds the decline seen last month. At any rate, it's unit auto sales, not the ISM Manufacturing PMI, that gets booked into the US GDP bean-count. Have a great weekend.

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Sonu Varghese

@sonusvarghese

4 months

About the hot April PPI number, which Powell calls "mixed" 🧵 Headline: 0.5% m/m (2.2% y/y) Ex food/energy: 0.5% (2.4%) M/M data thrown off by revisions 👇 March Headline PPI Prior: 0.2% Revised: -0.1% March Core Prior: 0.2% Revised: 0.0% @CarsonResearch @RyanDetrick 1/

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Sonu Varghese

@sonusvarghese

16 days

Initial claims 👍 with low layoffs Insured unemployment rate in line with 2023 & 2018-2019 But doesn't mean risks aren't rising & tight policy not having an impact 👇 Production of business equipment pulled back in July & has eased since 2022 @RyanDetrick @CarsonResearch

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Sonu Varghese

@sonusvarghese

16 days

Bostic changes his tune … Now open to a cut in September, warning the Fed “can’t be late” “Waiting does bring risk”

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Sonu Varghese

@sonusvarghese

2 months

S&P 500 up 17%+ YTD As @awealthofcs pointed out 2020 +18.4% '21 +28.8% '22 -18.2% '23 +26.3% Don't miss the markets best years & limit upside 🤔 But that's what protection strategies with buffers & caps do. New blog 👇 @CarsonResearch @RyanDetrick

Don’t Miss the Best Years of the Market and Lock into Poor Outcomes

The stock market has been on a tear for more than 18 months now, with the S&P 500 up 44% from December 31, 2022 to July 8, 2024.

www.carsongroup.com

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Sonu Varghese

@sonusvarghese

3 years

Such a great interview of @jam_croissant by @choffstein ... definitely recommend a listen.

Cem Karsan - The Market Voting Machine (S4E1)

My guest this episode is Cem Karsan, Founder and Senior Managing Partner of Aegea Capital Management. Cem began his career in the pits, and so we begin our con

podcasts.apple.com

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Sonu Varghese

@sonusvarghese

4 months

The bears are back in town! And @RyanDetrick tackles them in this new blog 🙌 Great read 👇

The Bears Are Back, Why That’s a Good Thing

Some well-known bears are back in the news, with their usual dour predictions, from a recession coming soon to an outright 65% market crash.

www.carsongroup.com

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Sonu Varghese

@sonusvarghese

5 months

This 👇 In nominal terms, GDI +4.6% y/y in 2023 +4.1% y/y in 2019 2024 GDI was strong despite 80 bps drag from net interest payments by corporations (record -32% y/y drop even with higher rates)🤷‍♂️ Corporate profits would be even stronger if you backed out Fed's "losses"!

Ryan Detrick, CMT

@RyanDetrick

5 months

Remember when they told us GDI was a major worry? It just came in at 4.8%, the best in two years. Avg of real GDP and GDI? 4.1%, again the best in two years. Hopefully this comes off as obvious, but this isn't a bad thing.

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