Worst.Case.Scenario. In 24 years, the ratio of wholesale inventories to sales has only been higher than the current 1.35x once - at the peak of the recession in the last financial crisis. Wholesale sales tumbled 1.3% MoM (worse than the -0.3% exp) and inventories rose 0.3% MoM while expectations were for a drop of 0.1% (inventories over sales difference rose from $143.6BN to $151.2BN in one month, a new record high.) And finally, automotive inventories rose to 1.78x sales - the highest since the crisis.
Keep stacking, despite tumbling sales...
Which leaves us firmly in the "recession imminent" section of the business cycle...
And there has never been a wider absolute spread between inventories and sales...
And as far as the automotive sector - that bubble may have a problem...
This cannot end well.