SPY - SP500: Major Deflationary Warning - Rents Are Collapsing

2024-02-05 04:24:07 ET

Summary

• The New Tenant Rent Index fell by 4.74% in Q4/23, more than in 2008, and this signals a deflationary recession.
• The New Tenant Rent Index leads the shelter inflation, which accounts for 44% of core CPI; thus, core CPI could turn negative by early 2025.
• We are likely near the peak in the S&P 500 for this cycle.

Deflationary shock coming?

Deflationary shock happens when inflation turns negative, and that's usually associated with a deep recession and a financial crisis, for example the 2008 Great Financial Crisis and the Great Depression....

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