I summarised the key point of market observation recently
Basically I judge U.S economy is facing risk of slowing down on growth
Not only the threatening of Coronovirus, also movement of Economic supply become slowing Last week EU many countries, besides Italy and Spain have sank into Coronovirus
( COVD-19) disater, Germany, Spain, France, UK have been warned by expected large growth of infected numbers also, their country leaders subsequently implement ban policy nationwide.
Recently Market slump for 20% because the view to EU economy decline in following 6 months.Traditionally, US- EU have sum of trade business we can see exports of US- EU and US- China for comparision :
US- EU exports 2.5 times China's, it explain in last 2 weeks financial market continue suffering sell-off on concerning US badly effected by EU
https://www.census.gov/
the latest Non-Manufacturing ISM® Report On Business on Febuary
registered 57.3 percent, which is 1.8 percentage points higher than the January reading of 55.5 percent.
but it seems not to be strong wall for defending US economy from risk of slowing down
Let's take a look of US Non-Manufacturing ISM constitutes :
Accommodation & Food Services; Management of Companies & Support Services; Mining; Finance & Insurance; Real Estate, Rental & Leasing
Because the ( COVD-19) virus officially threaten US people common living, usually recreation activities ( restaurants, movie theater and mall) expected to be decreased a lot. It is evidenced that IHS Markit US Services PMI sharply down 4% on Feb with forecast view. US service sector amounted to 70% of GDP output, I think it is bad sign worth of being noticed for US economy
Another point need to follow is current of US employment
Although unemployment rate down to lowest 3.5%. The growth rate of job openings start to decline, especially for Jan-Feb 2020 sharply reduced to 250,000 only from highest 7,361,000 last Oct. It'll surpress 2020 family income for long-term and Fortune 500 companies revenue growth would be limited possibly, which all discourage the tendency of soaring up again after
late Feb market meltdown. (U.S. BUREAU OF LABOR STATISTICS)
The discrepency rate on loan portfolio of commercial banks 違約貸款
we can see the rate of real estate loan is slowly down ( health )
conversly, default rate in credit card slowly up ( bad and need to follow )
Despite serious concern for ( COVID-19) virus attack on first half 2020, at the meanwhile.US economy demand still perform steady since last November
let's see the several indicators in order
Real estate industry keep recover from lowest since end of 2019
and made MBS ( mortage backed securites ) slowing increase
House price increase MoM
Net percentage of domestic banks tightening standards for commercial and industrial loans to large and middle-market firms
In 2019 the commercial loan approved by banks once decrease obviously, in Jan 2020
There's sign show that the bank loan approved for business activities seems recover slightly
Despite serious concern for ( COVID-19) virus attack on first half 2020, at the meanwhile.
US economy demand still perform vital that give chances to survive under double strike of disease prevaiing and economic supply downing from the peaks. Is it the time market really turned into bear ? We still wait for further 3 months more business and economic data released so that can be determined ( It makes no difference that family portfolio already changed to cash)BR
York
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