Unlike oil, physical products in agricultural markets become useless in time. Hogs and cattle cannot be stored indefinitely for a variety of reasons.
The S&P 500 is currently trading at about 2,800. If earnings fall by an average amount, the index could drop another 22%.
With its deep insight into the state of economy, used car prices are a great response if you ever find yourself at an economist’s party playing “desert island indicator.”
The current reading of the Baa-Treasury spread, the dashed line, is consistent with a recession. The chart shows there were no false signals in the past 20 years.
Based on history, we should expect slow growth and high unemployment until at least this fall.
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