Gero Patterer

Macro Research Analyst | CFA, Data Science, Finance | An investment narrative without data is just a fairy tale

[Gero Patterer @GeroPatterer]

@Claudia_Sahm Wishing you and your family a lot of strength and you a speedy recovery 💪❤️🙏

[Gero Patterer @GeroPatterer]

@_TruthOutThere Yes indeed. It’s the 2001 cycle.

[Gero Patterer @GeroPatterer]

@Claudia_Sahm S&M of Macro🙂👍

[Gero Patterer @GeroPatterer]

Very good thread on financial stress indicator.

[Fabian Wintersberger @f_wintersberger]

Looks as if 5.5% isn't a stressful rate, isn't it?

BUT: What if I told you that such a 'stress indicator' doesn't forecast stress until it actually happens? 🧵

Usually, these stress indices look at various economic data to determine whether financial stress exists in the current economy at the moment.

1/

[Darren Sissons @KiwiPMI]

Good luxury sector discussion with @AnitaSharma

Worth your time. 👇👇👇

[Gero Patterer @GeroPatterer]

@yang_youngbin Market was pricing in 7 rate cuts at one point. The consensus narrative of the beginning of the year is breaking down again.

[Gero Patterer @GeroPatterer]

Strong growth in ISM Services.
But you cannot have it both ways. Above trend growth and low inflation.
Look at Prices 64! (56.7 prior month). If the trend continues inflation will accelerate again.

[Gero Patterer @GeroPatterer]

@yang_youngbin 금리를 더 올리지않을거 같은대요, 그냥 “하이어 퍼 롱거” :)

[Gero Patterer @GeroPatterer]

2/4
Forward looking indicators such as initial claims and continuing claims are still slightly below pre pandemic trend.

[Gero Patterer @GeroPatterer]

@economakase @INArteCarloDoss

[Gero Patterer @GeroPatterer]

@economakase Goldman의 금융상황지수 맞죠? 신기한 관계네요.

[Gero Patterer @GeroPatterer]

Relax guys. GDPNow estimate jumped to 4.2% (from 3.0%), due to Manufacturing ISM (49.1 vs 47.1 prior).

Look at Consumption (PCE). Do you really think consumption can double, when wage increases are falling (look at ECI)?

[Gero Patterer @GeroPatterer]

@lisaabramowicz1 4.6% is the number. That’s why Claudia was so confident in yesterday’s interview.

[Gero Patterer @GeroPatterer]

1/3

Sahm rule preview for tomorrow.

We are light years away from triggering the 0.5 threshold.

Although consensus for tomorrow is a slight uptick in unemployment (from 3.7% to 3.8%), the Sahm indicator would still fall, as the 3.9% print of October falls out of the calculation.

[Gero Patterer @GeroPatterer]

2/3

Just to show how far away from triggering the rule we are, we would need a gigantic uptick to 4.6% tomorrow to trigger the 0.5% threshold.

[Gero Patterer @GeroPatterer]

Great chart from Joey. Just adding a potential explanation for the gap.

Inside the black box are the deficit of US (blue) and Germany (Orange) during the same time as Joey's chart.

The US just ran a more than three times higher deficit (% of GDP) compared to Germany since 2020.

[Joey Politano 🏳️‍🌈 @JosephPolitano]

US and EU Q4 GDP data is now in, which means it's time for another update to the G7 growth chart

Here's each country's cumulative increase in real GDP, since just before the pandemic:

🇺🇸 +8.9%
🇨🇦 +4.5% (thru Q3)
🇮🇹 +2.9%
🇬🇧 +1.4% (thru Q3)
🇫🇷 +1.4%
🇩🇪 +0.4%
🇯🇵 +0.2% (thru Q3)

[Gero Patterer @GeroPatterer]

@libertniko Who would have thought a year ago that Italy and Spain would be the hope of Europe, while Germany being the problem child.

[이코노마카세 @economakase]

■ 기업도 빈부격차에 시달린다

S&P500의 선행 어닝은 팬데믹 이후 고점을 회복한 반면(오른쪽), 러셀은 그보다 한참 아래에(왼쪽) 있습니다.

(출처는 맨 아래)

[Gero Patterer @GeroPatterer]

@LLLJT1 🙏

[Gero Patterer @GeroPatterer]

1/9

🧵The two different economies within the US.

While 12m forward earnings of the S&P 500 recovered to the level of the Covid reopening high (right chart), the 12m forward earnings of the Russel 2000 are still way below the Covid reopening high (left chart).

[Gero Patterer @GeroPatterer]

@LordChurdgrieve 🙏

[Gero Patterer @GeroPatterer]

3/9

In order to beat earnings, S&P 500 companies would need to grow earnings by more than +4.5% yoy, whereas a beat for Russel 2000 companies only need earnings to come in above -3.8% yoy.