Inflation figures surprised to the upside. The Consumer Price Index rose 0.9% in October (+6.2% year over year), up 0.6% (+4.6% year over year) excluding food and energy. Gasoline rose 6.1% (+49.6% year over year). Used vehicle prices rose 2.5% (+26.4% year over year).
Its National Young Readers Week! Whether your favorite childhood author was C.S. Lewis or Judy Blume, you likely remember the joy of reading your favorite book and turning through the pages of witty rhymes and colorful illustrations. I know for me, the times spent reading with my three daughters will always be some of my fondest memories.
As expected, the Federal Open Market Committee (FOMC) announced it would begin reducing (“tapering”) the monthly pace of asset purchases – currently $120 billion – by $15 billion per month but could go faster or slower depending on economic conditions.
As was widely expected, the Federal Open Market Committee announced the tapering of its monthly pace of asset purchases. The criteria for the lift-off in short-term interest rates is more stringent, but as Chair Powell admitted in his press conference, reaching full employment by the second half of next year is “certainly within the realm of possibility.”
This month marks 30 years since the release of the Disney Classic, Beauty and the Beast! Those fondly recalling the film probably remember the iconic songs and cast of household objects that came to life; but the moral of the story is to not be deceived by appearances. Ironically, this same message is quite applicable for investors.
As expected, the advance estimate of 3Q21 Gross Domestic Product showed a sharp slowing in growth. More timely data suggest that the economy regained some momentum into early 4Q21. Still, there are important questions regarding the labor market, inflation pressures, and Federal Reserve policy over the near term.
Earnings reports were mixed. Bond yields declined, as market participants generally expect the Fed to raise short-term interest rates earlier to get inflation under control.
Jeepers Creepers! It’s hard to believe that Halloween is just days away, and as the month of October comes to a close investors will be anxiously awaiting the release of the jobs report next Friday. There has been some ‘toil and trouble’ in the labor market due to the vast number of jobs available yet an inability to fill the openings.
Treasury reported a federal budget deficit of about $2.8 trillion (about 12% of GDP) for FY21. Barring a major unforeseen event, the deficit will fall considerably next year. By itself, that will be a negative for GDP growth, but a further strengthening in private-sector demand should more than offset that.
Expectations of the Fed’s liftoff in short-term interest rates have continued to inch forward and bond yields have moved moderately higher. However, investors remain optimistic, looking beyond recent concerns (the delta variant and supply chain and labor issues).
Tomorrow is National Dictionary Day! Whether spoken or written, the power of words is undeniable. And as your Investment Strategy Team, we choose ours wisely, as to not create confusion when communicating our views.
There was another “disappointing” gain in nonfarm payrolls in September (up 194,000, vs. a median forecast of +500,000), but it’s not as bad as it looks. Less hiring at the start of the school year resulted in a decline in (adjusted) education jobs.
While unlikely to occur, a default on U.S. debt would have serious impacts for global financial markets. Learn more.
As we sit atop our prosperous peak, admiring the views of the fastest economic growth since 1984, the best start to a bull market and the record-breaking quarter of earnings growth, it’s wise to remember that not too long ago we began our uphill journey from the depths of the COVID-19 ravine. Often, the best views come after the hardest climbs.
Chief Economist Scott Brown discusses the latest market data.
Following the strong performance in the first half of the year, economic growth was bound to moderate in the second half. Growth is still expected to be strong by historical standards. Yet, it may be disappointing for some investors.
Review the latest Weekly Headings by CIO Larry Adam.
In a win (but not a complete victory) for “team transitory,” the Consumer Price Index rose less than expected in August (+0.3%, up just 0.1% excluding food and energy). Areas that were running hot a few months ago (used cars, vehicle rentals, car insurance, airfares) retreated.
In addition to football, this fall will be eventful for our team of monetary policymakers at the Federal Reserve. Quarterbacked by Chairman Powell, the Fed will draft its route to easing its accommodative stance now that the economic recovery has put some points on the scoreboard.
As of the end of August, the index's year-to-date gains exceed 20%.
“We have production bottlenecks and supply shortages in every economic recovery,” says Raymond James Chief Economist Scott Brown, but those issues – and inflation – are expected to ease with time.
From school bells to the bells of New York Stock Exchange—the ringing of bells often signifies the beginning and/or conclusion of an event.
Optimism around GDP growth, employment and earnings has, for now, outweighed worries related to COVID-19 variants.
Chief Economist Scott Brown discusses current economic conditions.
Raymond James Chief Investment Officer Larry Adam examines the current investing environment through the lens of classic games.
The CPI rose more than expected in April, adding to inflation worries.
The markets continue their upward trend, supported by accommodative fiscal policy from the Federal Reserve, strong gross domestic product (GDP) numbers and solid earnings reports.
Today marks 100 days since President Biden was sworn into office, a time often referred to as the ‘honeymoon period’ for a new president’s tenure.
Review the latest portfolio strategy commentary from Mike Gibbs, managing director of Equity Portfolio & Technical Strategy.
On Monday, the Treasury Department is expected to report a March budget deficit of about $658 billion, bringing the 12-month total to nearly $4.1 trillion, about 19% of GDP. Proponents argue that the added spending, with more to come, will help to ensure the recovery.
As a backdrop, we’ll bring a bit of scientific language to our analysis this quarter as we celebrate the amazing feats of our scientific brothers and sisters.
As the pandemic recedes and the economy reopens, we can expect strong job growth in the months ahead.
