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Where would the first signs of US fiscal stress appear in markets?
1) Tailing Treasury auctions, lower bid-to-cover ratios, or softer demand from interest rate-sensitive buyers.
2) Rating agencies issuing opinions about the deteriorating US fiscal situation.
3) The term premium trending higher.
Our latest chart book looking at demand and supply of Treasuries is available here.
Source: FFUNDS, Haver, Apollo Chief Economist 
Source: Bureau of Public Debt, Haver Analytics, Apollo Chief Economist 
Source: Bureau of Public Debt, Haver Analytics, Apollo Chief Economist 
Source: SIFMA, Haver Analytics, Apollo Chief Economist 
Source: CBO, Haver Analytics, Apollo Chief Economist 
Source: Treasury, BEA, Haver Analytics, Apollo Chief Economist 
Source: FFUNDS, Haver, Apollo Chief Economist 
Source: IMF, Apollo Chief Economist. Note: Data as of Q2 2023. 
Source: FFUNDS, Haver, Apollo Chief Economist 
Source: Treasury, Haver Analytics, Apollo Chief Economist 
Source: Treasury, FRB, Haver Analytics, Apollo Chief Economist 
Source: Treasury, OMB, Haver Analytics, Apollo Chief Economist. Note: OMB estimates 10-year yield at around 3.5% in the next 10 years. 
Source: Bloomberg, Apollo Chief Economist 
Source: Apollo Chief Economist See important disclaimers at the bottom of the page.
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Capital market activity has increased significantly since the Fed meeting in December, with more issuance in IG and HY in January, February, and March, see charts below.
More M&A activity, more IPO activity, tighter credit spreads, and higher stock prices all contribute to stronger GDP growth and higher inflation over the coming quarters.
Source: Pitchbook LCD, Apollo Chief Economist. Note: GCP means general corporate purpose, which means making or financing any payment for working capital, capital expenditures, or any other general corporate purpose. 
Source: Pitchbook LCD, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The consensus has been lowering the likelihood of a US recession over the next 12 months, see chart below.
Source: Bloomberg, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The number of people going to Broadway shows has been rising faster than normal in recent weeks, likely driven by the strong labor market and strong household gains in financial wealth and housing wealth.
Source: Internet Broadway Database, Apollo Chief Economist See important disclaimers at the bottom of the page.
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Looking at the average age of highways, streets, and power facilities, US infrastructure has never been in worse shape than it is at the moment, see chart below.
Source: BEA, Apollo Chief Economist See important disclaimers at the bottom of the page.
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In 2023 it was all about the Magnificent Seven. Then it was the Fabulous Four. But now it is turning out that the story is actually a lot more complicated, see charts below.
Source: Bloomberg, Apollo Chief Economist 
Source: Cargurus.com, Apollo Chief Economist See important disclaimers at the bottom of the page.
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After the Fed started raising rates in March 2022, coverage ratios began to move lower, see chart below, and after the Fed turned dovish at the November 2023 FOMC meeting, coverage ratios have started to rebound.
The bottom line is that the strong economy and strong earnings combined with very easy financial conditions are helping companies manage their balance sheets, including high debt levels.
Source: Pitchbook LCD, Apollo Chief Economist See important disclaimers at the bottom of the page.
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After the 2008 financial crisis, one out of 20 homes for sale was a new home. Today, one out of three homes for sale is a new home, see chart below.
The source of the current low inventory of existing homes for sale is the lock-in effect, as homeowners with low mortgage rates are unwilling to sell their homes and buy a new one at a much higher mortgage rate.
Source: NAR, Census, Haver Analytics, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The Fed’s estimate of where interest rates will be in the long run has started to move higher, likely driven by the muted response of the economy so far to Fed hikes and by structural changes in deglobalization, energy transition, and defense spending.
Source: FOMC, St. Louis Fed, Apollo Chief Economist See important disclaimers at the bottom of the page.
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The median size of new single-family homes peaked at 2,473 square feet in 2016.
Today, the size of new homes being built is 2,237 square feet, see chart below.
Source: Census Bureau, Haver Analytics, Apollo Chief Economist See important disclaimers at the bottom of the page.
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