SPY - Recessionary Data Creeping Up While The AI Bubble Tops

2024-06-28 06:54:50 ET

Summary

• Early signs of recession: Weekly jobless claims rising, continuing jobless claims hitting cycle highs, new manufacturing orders falling below expectations.
• GenAI bubble burst: Stocks like Micron dropping, potential bubble burst in GenAI theme stocks, Nvidia experienced sharp intraday reversal.
• Potential market implications: Combination of recession and bubble burst could lead to sharp drop in S&P500, similar to dot-com bubble burst, with potential housing market bubble burst and sovereign debt crisis adding to uncertainty.

The newly released economic data is pointing to the early signs of a recession. The average weekly claims for unemployment are trending higher, well above the cycle lows. The continuing jobless claims are hitting cycle highs - the highest levels since December 2021. The new manufacturing orders for non-defense goods ex air transport, which is a leading indicator, fell by -0.6% in May, well below expectations. ...

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