Now is not the time to consider changing inflation targets.
Over the past couple of decades, I’ve told clients many very important things. Most of them are timeless, which is why I find myself saying the same things repeatedly. Here are the top 10, and I’ve saved my most important for last.
Gold has historically performed well during stagflation, a period of high inflation and high unemployment.
The memory-chip sector, famous for its boom-and-bust cycles, had changed its ways.
Personal income (excluding transfer receipts) in December rose 0.27% and is up 5.3% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, real personal income (excluding transfer receipts) MoM was up 0.21% and was up 0.3% year-over-year.
Optimism is increasing on Wall Street, with investors hoping for a “soft landing” in the economy.
While tech investors have plenty of issues to worry about as the sector heads into a key week for corporate earnings, one notable headwind from last year has eased in recent months: the dollar.
Bitcoin is set for its best January since 2013 on bets that monetary tightening and the crypto-sector crisis are both ebbing.
Jerome Powell and Wall Street are headed for another face-off this week as the Federal Reserve seeks to slow its inflation-fighting campaign without signaling a readiness to stop.
Investors have little confidence in US stocks even after this month’s surge, fearing weak corporate earnings could drag them back down.
With the release of Friday morning's report on December's personal incomes and outlays, we can now take a closer look at "real" disposable personal income per capita. At two decimal places, the nominal 0.22% month-over-month change in disposable income comes to 0.17% when we adjust for inflation. This is a decrease from last month's .28% nominal and 0.18% real change. The year-over-year metrics are 2.71% nominal and -2.20% real.
The BEA's Personal Income and Outlays report for December was published on Friday morning by the Bureau of Economic Analysis. The latest headline PCE price index was up 0.05% month-over-month (MoM) and is up 5.02% year-over-year (YoY). Core PCE (YoY) dropped to 4.42%, still well above the Fed's 2% target rate.
The National Association of Realtors released the December data for its pending home sales index. According to the National Association of Realtors®, "Pending home sales increased in December for the first time since May 2022 — following six consecutive months of declines."
In stock investing there’s a management style called “growth at a reasonable price” or GARP. It seeks to achieve steadier results by avoiding both expensive growth stocks and beaten-down value stocks.
Since its launch in November, ChatGPT has been a smash hit. To explore the benefits of airline deregulation in the U.S., we sought the help of the AI content generator.
Elon Musk’s response to wavering demand and recession risk is pretty clear: slash prices, keep increasing capacity and try to continue growing even if it means sacrificing profit margin in the short term.
The Federal Reserve’s preferred inflation measures eased in December to the slowest annual paces in over a year while consumer spending fell, helping pave the way for policymakers to further scale back the pace of interest-rate hikes.
Investors are chasing European stocks at the fastest pace in nearly a year, while US equity inflows remain muted amid concerns of a recession, according to Bank of America Corp.
It is believed that during stagflation, investors tend to turn to gold as a safe haven asset as the economic and financial conditions are uncertain. Additionally, gold is seen as a hedge against inflation, as its value is not tied to any currency or government.
The current debt ceiling debate in Congress is a great reminder that investors should always prepare for the unexpected and invest in companies that are durable enough to withstand a range of economic scenarios.
The Atlanta Fed Flexible CPI is a price series developed by the Atlanta Fed to capture the price of items that change the most frequently.
Review the latest portfolio strategy commentary from Mike Gibbs, managing director of Equity Portfolio and Technical Strategy.
As Royce Investment Partners, the pioneers of small cap investing, celebrate their 50th anniversary, Chuck Royce and Chris Clark take a look at the past 50 years to provide a take on what they have learned and how it guides their views on what is yet to come for the asset class.
Donors were again very generous in their support of their favorite charities in 2022 despite inflation and poor performance across the financial markets.
For Americans with a New Year’s resolution to trade in their gas furnace or water heater for climate-friendly heat pumps, a word of caution: Generous Inflation Reduction Act rebates for home electrification took effect on Jan. 1, but they won’t actually be available to homeowners until year’s end or 2024 at the earliest, according the US Department of Energy.
The advance estimate for Q4 GDP, to one decimal, came in at 2.9% (2.89% to two decimal places), a decrease from 3.2% (3.24% to two decimal places) for the Q3 third estimate. With a per-capita adjustment, the headline number is lower at 2.52% to two decimal points.
US dollar cycles are long.
There’s a price to be paid for being early in investing even if you get the broader story right, as US stock market bears are learning the hard way.
The US economy grew faster than forecast into the end of 2022, but there were signs of slowing underlying demand as the steepest interest-rate hikes in decades threaten growth this year.
Focusing on high quality and liquidity when taking risk in portfolios will be key in 2023, as pressure on monetary policy remains intense.
The latest index came in at -1, up 3 from last month's revised figured, indicated a slower pace of decline compared to December. The future outlook declined to 3. All figures are seasonally adjusted. Here is a snapshot of the complete Kansas City Fed Manufacturing Survey.
Having oscillated between anticipating another 50-basis-point interest-rate increase by the Federal Reserve next week or a downshift to 25 basis points, traders have settled solidly on the latter, guided both by Fed officials’ comments and by media reports.
Exxon Mobil Corp., Chevron Corp., Shell Plc, TotalEnergies SE and BP Plc reaped almost $200 billion collectively last year but fears of an economic slowdown, plunging natural gas prices, cost inflation and uncertainty over China’s re-opening are dimming the outlook for 2023.
Checking your 401(k) account balance is a little less painful these days.
This morning's release of the December new home sales from the Census Bureau came in at 616K, up 2.3% month-over-month from a revised 602K in November. The Investing.com forecast was for 617K. The median home price is now at $442K.
Investors are still recovering from the municipal market beatdown of 2022, but the current higher absolute yield levels provide an attractive “re-entry” point for municipal market investors.
It is possible, contrary to the predictions of most economists, that the US will get through this disinflationary period and make the proverbial “soft landing.”
If you believe in the Milton Friedman adage that inflation is always and everywhere a monetary phenomenon, then you should also believe that the Federal Reserve can stop increasing interest rates. Now.
When we think about generating income for our clients, for over 30 years we’ve thought the most efficient way to do this is to blend the two key risks of fixed income into one portfolio.
The Northern Trust Economics team shares its outlook for key markets in the month ahead.
The US Purchasing Managers Composite Index (PMI) increased in January to 46.6 from 45 in December, representing a slowing economy but slightly less pessimistic than expected and better than the month before.
U.S. equities finished mixed in a lackluster trading session, as Q4 earnings season shifted into a higher gear today.
As of January 23, the price of regular and premium gas were up 11 and 9 cents each, respectively, from the previous week. According to GasBuddy.com, Hawaii has the highest average price for regular at $4.94 and Texas has the cheapest at $3.05. The WTIC end-of-day spot price for crude oil closed at $81.62 and is up 1.8% from last week.
Joe Biden entered the Oval Office with relatively low approval ratings.
America's subsidies for domestic EVs have created new tensions with Europe.
The first and easiest leg of the bursting of the bubble we called for a year ago is complete.
The Federal Reserve’s quantitative-tightening program risks being propelled toward an early end as US politicians bicker in Washington over raising the national debt limit, according to some economists and bond-market participants.
The popping of the bubble in US stocks is far from over and investors shouldn’t get too excited about a strong start to the year for the market, warns Jeremy Grantham, the co-founder and long-term investment strategist of GMO.
Stubborn inflation means more interest-rate increases are coming from the Federal Reserve and that sounds like great news for banks.
Cathie Wood’s flagship strategy is on course for one of its best months on record, joining assets across Wall Street that are so far defying gloomy expectations for the year ahead in emphatic style.
The Loomis Sayles Investment Grade Sector Team shares their expectations for the IG corporate bond market in 2023.
First, the good news: we estimate that real GDP grew at a solid 2.8% annual rate in the fourth quarter.
The problem with speculation is that there’s usually a gap between the underlying risk and the inevitable outcome.
In the weeks since the ChatGPT artificial intelligence tool took the world by storm, Nvidia Corp. has emerged as Wall Street’s preferred pick for traders seeking to profit from its potential.
The death of the cheap-money era is redrawing Corporate America’s earnings map - upending a decade of Wall Street wisdom over which stocks are the bargain buys or the high fliers of tomorrow.
Investors, economists and journalists have been talking incessantly about recession for the better part of the past year, and they’re all tired of it.
2022 was a year of disappointment and negative surprises as economies faced the consequences of geopolitical turmoil and central banks fighting inflation.
U.S. stocks are extending a late last-week rally, with Q4 earnings season set to shift into high gear.
The latest Conference Board Leading Economic Index (LEI) for December was down 1% from the November final figure of 111.6, marking the 10th consecutive MoM decline.
We got consumer price reports for many European countries this week.
So far, my 2023 investing looks just like 2022: lots of waiting.
Advisors can illustrate the risks in single-stock positions by educating their clients on the historical evidence that demonstrates diversification is the prudent strategy.
Is the Fed trying to wean the markets off monetary policy?
Ray Dalio, founder of the world’s largest hedge fund, has one.
The world’s leading CEOs, politicians, and various do-gooders were in Davos, Switzerland, this week, discussing ways to solve our collective problems and create opportunities for their own companies. The most important conversations were off the record and many of the public speeches were simply performance art.
A January survey conducted by Bank of America shows that 91% of money managers believe China will “fully reopen” in 2023. That’s a significant increase from December 2022. Growth expectations for the country are also at a 17-year high.
Market watchers on Wall Street attribute this week’s stock selloff to the insidious threat of recession.
The yield on the 10-year note ended January 20, 2023 at 3.48%, the two-year note ended at 4.14%, and the 30-year at 3.66%.
Federal Reserve officials, heartened by an inflation slowdown, are poised to slow the pace of their interest-rate hikes for a second straight meeting and debate how much more they need to tighten to get prices under control.
After a year that brought a surprise surge in interest rates, the biggest stock drop since 2008 and a halt to major deals, plenty of finance executives lined up at the World Economic Forum’s annual meeting to say they now see reasons to be upbeat.
Treasury Secretary Janet Yellen has declared that the US has hit its federal debt limit, kicking off an intense political battle that puts the global financial system at risk.
Federal Reserve Vice Chair Lael Brainard said interest rates will need to stay elevated for a period to further cool inflation that’s showing signs of slowing but is still too high.
U.S. equities are higher, as the markets look to get back to their winning ways after a two-day losing streak.
I've updated this series to include the December release of the consumer price index as the deflator and the monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $47,438, down 8.6% from 45-plus years ago. Hourly earnings are below their all-time high after adjusting for inflation.
Investors may be able to lock in higher yield levels notes Doug Drabik, Managing Director, Fixed Income Research and Nick Goetze, Managing Director, Fixed Income Solutions.
The lag effect of monetary policy changes will surprise the Fed as the fiscal “pig” of stimulus begins to exit the economic “python.”
This morning's release of the December existing home sales showed that sales fell slightly to a seasonally adjusted annual rate of 4.02 million units from the previous month's 4.08 million. The Investing.com consensus was for 3.96 million. The latest number represents a 1.5% decrease from the previous month and its eleventh in a row. December saw a 34.0% decrease YoY.
Jeff and Ron Muhlenkamp review what happened in 2022 regarding inflation, interest rates, the housing market, supply disruptions, energy problems, and foreign currency turbulence.
December's ZHVI came in at $357,319, slightly up from the previous month by 0.01% and up 10.8% YoY. After adjusting for inflation, the real figures are -0.77% MoM and 3.02% YoY.
The Northern Trust Economics team shares its outlook for growth, inflation, employment, and interest rates.
2022 was a difficult year for bond investors, but the combination of high inflation and tighter Fed policy should keep yields elevated, creating materially stronger fixed income returns in the new year.
We call them narratives, memes, or mind viruses.
The best start to a year for bond returns is helping fuel an unprecedented debt-sale bonanza by governments and companies around the world of more than half a trillion dollars.
Macro hedge funds, which look at economic trends and take advantage of dislocations across asset classes, had a banner year in 2022.
Bond traders were once deemed so powerful and all-knowing that Tom Wolfe described them as the “Masters of the Universe” in his classic 1987 novel “The Bonfire of the Vanities” that used Wall Street as its backdrop.
Whatever one’s favored terminology for describing the current moment, there is widespread agreement that we are facing unprecedented, unusual, and unexpected levels of uncertainty, auguring a future of crisis, instability, and conflict.
The Loomis Sayles Emerging Markets Debt Sector Team shares their views on growth, corporate defaults and inflation.
Month-over-month nominal sales in November was down 1.15% and up 6.02% YoY. Real retail sales, calculated with the seasonally adjusted CPI, decreased by 1.07% and was down 0.38% YoY.
US retail sales fell by the most in a year and business equipment production slumped, raising concerns that the economy is losing momentum under the weight of tighter Federal Reserve policy.
Inflation
Are Inflation Targets Still On Point?
Now is not the time to consider changing inflation targets.
The 10 Most Important Things I Tell Clients
Over the past couple of decades, I’ve told clients many very important things. Most of them are timeless, which is why I find myself saying the same things repeatedly. Here are the top 10, and I’ve saved my most important for last.
Stagflation! Is NOW the time to buy Precious Metals?
Gold has historically performed well during stagflation, a period of high inflation and high unemployment.
Historic Crash for Memory Chips Threatens to Wipe Out Earnings
The memory-chip sector, famous for its boom-and-bust cycles, had changed its ways.
The Big Four: Real Personal Income in December
Personal income (excluding transfer receipts) in December rose 0.27% and is up 5.3% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, real personal income (excluding transfer receipts) MoM was up 0.21% and was up 0.3% year-over-year.
A “Soft Landing” Scenario – Possibility Or Fed Myth?
Optimism is increasing on Wall Street, with investors hoping for a “soft landing” in the economy.
Dollar's Decline Is a Rare Nasdaq Tailwind as Earnings Loom
While tech investors have plenty of issues to worry about as the sector heads into a key week for corporate earnings, one notable headwind from last year has eased in recent months: the dollar.
Bitcoin Barrels Toward Historic January as Crypto Market Jumps by $280 Billion
Bitcoin is set for its best January since 2013 on bets that monetary tightening and the crypto-sector crisis are both ebbing.
Fed's Wall Street Clash Sets Stage for Powell’s Hawkish Message
Jerome Powell and Wall Street are headed for another face-off this week as the Federal Reserve seeks to slow its inflation-fighting campaign without signaling a readiness to stop.
Stocks Are Poised to Hit New Lows This Year, Survey of Investors Shows
Investors have little confidence in US stocks even after this month’s surge, fearing weak corporate earnings could drag them back down.
Real Disposable Income Per Capita Continued to Inch Up in December
With the release of Friday morning's report on December's personal incomes and outlays, we can now take a closer look at "real" disposable personal income per capita. At two decimal places, the nominal 0.22% month-over-month change in disposable income comes to 0.17% when we adjust for inflation. This is a decrease from last month's .28% nominal and 0.18% real change. The year-over-year metrics are 2.71% nominal and -2.20% real.
PCE Price Index: December Headline at 5% YoY
The BEA's Personal Income and Outlays report for December was published on Friday morning by the Bureau of Economic Analysis. The latest headline PCE price index was up 0.05% month-over-month (MoM) and is up 5.02% year-over-year (YoY). Core PCE (YoY) dropped to 4.42%, still well above the Fed's 2% target rate.
Pending Home Sales Increased 2.5% in December, Ending Six-Month Slide
The National Association of Realtors released the December data for its pending home sales index. According to the National Association of Realtors®, "Pending home sales increased in December for the first time since May 2022 — following six consecutive months of declines."
Growth Pains
In stock investing there’s a management style called “growth at a reasonable price” or GARP. It seeks to achieve steadier results by avoiding both expensive growth stocks and beaten-down value stocks.
I Asked ChatGPT to Write About Airline Deregulation in the U.S. Here’s How It Went
Since its launch in November, ChatGPT has been a smash hit. To explore the benefits of airline deregulation in the U.S., we sought the help of the AI content generator.
Panasonic Sees Potential for Another EV Battery Plant in US
Elon Musk’s response to wavering demand and recession risk is pretty clear: slash prices, keep increasing capacity and try to continue growing even if it means sacrificing profit margin in the short term.
Key Inflation Gauge Cools Further, Paving Way for Smaller Fed Rate Hike
The Federal Reserve’s preferred inflation measures eased in December to the slowest annual paces in over a year while consumer spending fell, helping pave the way for policymakers to further scale back the pace of interest-rate hikes.
Investors Flock to European Stocks Leaving US Behind, BofA Says
Investors are chasing European stocks at the fastest pace in nearly a year, while US equity inflows remain muted amid concerns of a recession, according to Bank of America Corp.
Stagflation! Is Now the time to buy Precious Metals
It is believed that during stagflation, investors tend to turn to gold as a safe haven asset as the economic and financial conditions are uncertain. Additionally, gold is seen as a hedge against inflation, as its value is not tied to any currency or government.
Elephant in the Room
The current debt ceiling debate in Congress is a great reminder that investors should always prepare for the unexpected and invest in companies that are durable enough to withstand a range of economic scenarios.
Are Inflation Targets Still On Point?
Now is not the time to consider changing inflation targets.
Things in Atlanta are Dropping Like a Stone
The Atlanta Fed Flexible CPI is a price series developed by the Atlanta Fed to capture the price of items that change the most frequently.
Weekly Market Guide
Review the latest portfolio strategy commentary from Mike Gibbs, managing director of Equity Portfolio and Technical Strategy.
Small Cap Pioneers Share Their Investing Principles
As Royce Investment Partners, the pioneers of small cap investing, celebrate their 50th anniversary, Chuck Royce and Chris Clark take a look at the past 50 years to provide a take on what they have learned and how it guides their views on what is yet to come for the asset class.
Charitable Giving, Looking Back and Forward
Donors were again very generous in their support of their favorite charities in 2022 despite inflation and poor performance across the financial markets.
Looking for Inflation Reduction Act Rebates to Go Green? Get Ready to Wait
For Americans with a New Year’s resolution to trade in their gas furnace or water heater for climate-friendly heat pumps, a word of caution: Generous Inflation Reduction Act rebates for home electrification took effect on Jan. 1, but they won’t actually be available to homeowners until year’s end or 2024 at the earliest, according the US Department of Energy.
Q4 Real GDP Per Capita: 2.5% Versus the 2.9% Headline Real GDP
The advance estimate for Q4 GDP, to one decimal, came in at 2.9% (2.89% to two decimal places), a decrease from 3.2% (3.24% to two decimal places) for the Q3 third estimate. With a per-capita adjustment, the headline number is lower at 2.52% to two decimal points.
The Buck Stops Here
US dollar cycles are long.
GDP and Jobs Show the Stock Market Bears Are Still Early
There’s a price to be paid for being early in investing even if you get the broader story right, as US stock market bears are learning the hard way.
US Economy Shows Slowdown Signs After Growing 2.9% Last Quarter
The US economy grew faster than forecast into the end of 2022, but there were signs of slowing underlying demand as the steepest interest-rate hikes in decades threaten growth this year.
European Outlook: Less Downside Now, But Caution Still Warranted
Focusing on high quality and liquidity when taking risk in portfolios will be key in 2023, as pressure on monetary policy remains intense.
Kansas City Fed Manufacturing Survey: Activity Was Flat
The latest index came in at -1, up 3 from last month's revised figured, indicated a slower pace of decline compared to December. The future outlook declined to 3. All figures are seasonally adjusted. Here is a snapshot of the complete Kansas City Fed Manufacturing Survey.
Why the Fed Should Raise Rates by Half a Percent
Having oscillated between anticipating another 50-basis-point interest-rate increase by the Federal Reserve next week or a downshift to 25 basis points, traders have settled solidly on the latter, guided both by Fed officials’ comments and by media reports.
Big Oil Faces Headwinds After Record $199 Billion Profit Haul
Exxon Mobil Corp., Chevron Corp., Shell Plc, TotalEnergies SE and BP Plc reaped almost $200 billion collectively last year but fears of an economic slowdown, plunging natural gas prices, cost inflation and uncertainty over China’s re-opening are dimming the outlook for 2023.
Popular 401(k) Funds Rebound After Tanking in 2022
Checking your 401(k) account balance is a little less painful these days.
New Home Sales Up 2.3% in December
This morning's release of the December new home sales from the Census Bureau came in at 616K, up 2.3% month-over-month from a revised 602K in November. The Investing.com forecast was for 617K. The median home price is now at $442K.
Municipal Bonds: Is it Safe to Get Back in the Water?
Investors are still recovering from the municipal market beatdown of 2022, but the current higher absolute yield levels provide an attractive “re-entry” point for municipal market investors.
Economists Finally Have a Good Excuse for Being Wrong
It is possible, contrary to the predictions of most economists, that the US will get through this disinflationary period and make the proverbial “soft landing.”
The Case for the Federal Reserve to Pause Right Now
If you believe in the Milton Friedman adage that inflation is always and everywhere a monetary phenomenon, then you should also believe that the Federal Reserve can stop increasing interest rates. Now.
The Outlook for Income: Balancing Rates and Credit in 2023
When we think about generating income for our clients, for over 30 years we’ve thought the most efficient way to do this is to blend the two key risks of fixed income into one portfolio.
Global Economic Outlook: Run-of-the-Mill
The Northern Trust Economics team shares its outlook for key markets in the month ahead.
US PMIs Show the Fed Walking a Fine Line
The US Purchasing Managers Composite Index (PMI) increased in January to 46.6 from 45 in December, representing a slowing economy but slightly less pessimistic than expected and better than the month before.
Stocks Lack Direction in Choppy Trading
U.S. equities finished mixed in a lackluster trading session, as Q4 earnings season shifted into a higher gear today.
Weekly Gasoline Prices: Regular and Premium Increase for 4th Consecutive Week
As of January 23, the price of regular and premium gas were up 11 and 9 cents each, respectively, from the previous week. According to GasBuddy.com, Hawaii has the highest average price for regular at $4.94 and Texas has the cheapest at $3.05. The WTIC end-of-day spot price for crude oil closed at $81.62 and is up 1.8% from last week.
What Would an Early Biden Departure Mean for Markets?
Joe Biden entered the Oval Office with relatively low approval ratings.
From Inflation Reduction To Trade Friction
America's subsidies for domestic EVs have created new tensions with Europe.
After a Timeout, Back to the Meat Grinder!
The first and easiest leg of the bursting of the bubble we called for a year ago is complete.
Debt-Limit Fight Risks Early End to Fed Quantitative Tightening
The Federal Reserve’s quantitative-tightening program risks being propelled toward an early end as US politicians bicker in Washington over raising the national debt limit, according to some economists and bond-market participants.
Jeremy Grantham Warns of a 17% Plunge in the S&P 500 This Year
The popping of the bubble in US stocks is far from over and investors shouldn’t get too excited about a strong start to the year for the market, warns Jeremy Grantham, the co-founder and long-term investment strategist of GMO.
The 2 Trillion Reasons Why Fed Tightening Isn't So Scary
Stubborn inflation means more interest-rate increases are coming from the Federal Reserve and that sounds like great news for banks.
Cathie Wood's ARKK Is Well on Way to One of Its Best Months Ever
Cathie Wood’s flagship strategy is on course for one of its best months on record, joining assets across Wall Street that are so far defying gloomy expectations for the year ahead in emphatic style.
IG Outlook: Positive Technicals, Deteriorating Fundamentals
The Loomis Sayles Investment Grade Sector Team shares their expectations for the IG corporate bond market in 2023.
Rearview Mirror OK, Collision Ahead
First, the good news: we estimate that real GDP grew at a solid 2.8% annual rate in the fourth quarter.
Pushing Your Luck
The problem with speculation is that there’s usually a gap between the underlying risk and the inevitable outcome.
Nvidia to Win Big From ChatGPT Hype, Wall Street Predicts
In the weeks since the ChatGPT artificial intelligence tool took the world by storm, Nvidia Corp. has emerged as Wall Street’s preferred pick for traders seeking to profit from its potential.
Amazon Is a Value Stock in Topsy-Turvy New World of Investing
The death of the cheap-money era is redrawing Corporate America’s earnings map - upending a decade of Wall Street wisdom over which stocks are the bargain buys or the high fliers of tomorrow.
Don't Get Disoriented by Recession-Talk Fatigue
Investors, economists and journalists have been talking incessantly about recession for the better part of the past year, and they’re all tired of it.
Fed Up: Can the Fed Accommodate the Market?
2022 was a year of disappointment and negative surprises as economies faced the consequences of geopolitical turmoil and central banks fighting inflation.
Stocks Adding to Friday's Rally, Flood of Earnings Data Looms
U.S. stocks are extending a late last-week rally, with Q4 earnings season set to shift into high gear.
CB LEI: 10th Consecutive Decline in December, Recession Signal Continues
The latest Conference Board Leading Economic Index (LEI) for December was down 1% from the November final figure of 111.6, marking the 10th consecutive MoM decline.
Common and Unique Threads of European Inflation
We got consumer price reports for many European countries this week.
Why I’m Waiting for the Fed to Pivot
So far, my 2023 investing looks just like 2022: lots of waiting.
Fortune Doesn’t Always Favor the Bold: The Perils of Concentrated Stock Positions
Advisors can illustrate the risks in single-stock positions by educating their clients on the historical evidence that demonstrates diversification is the prudent strategy.
Monetary Policy. Is The Fed Trying To Wean Markets Off Of It?
Is the Fed trying to wean the markets off monetary policy?
A Powerful New Tool Transforms How Billionaires Give Fortunes Away
Ray Dalio, founder of the world’s largest hedge fund, has one.
Slow Change Speeds Up
The world’s leading CEOs, politicians, and various do-gooders were in Davos, Switzerland, this week, discussing ways to solve our collective problems and create opportunities for their own companies. The most important conversations were off the record and many of the public speeches were simply performance art.
Fund Managers Are Betting On China Stocks And Commodities As The Country Reopens
A January survey conducted by Bank of America shows that 91% of money managers believe China will “fully reopen” in 2023. That’s a significant increase from December 2022. Growth expectations for the country are also at a 17-year high.
US Market Watchers Are Fretting Over the Biggest January Options Expiry in a Decade
Market watchers on Wall Street attribute this week’s stock selloff to the insidious threat of recession.
Treasury Snapshot: January 20, 2023
The yield on the 10-year note ended January 20, 2023 at 3.48%, the two-year note ended at 4.14%, and the 30-year at 3.66%.
Fed Set to Slow Rate Hikes Again and Debate How Much Further to Go
Federal Reserve officials, heartened by an inflation slowdown, are poised to slow the pace of their interest-rate hikes for a second straight meeting and debate how much more they need to tighten to get prices under control.
Wall Street Spreads New Year Cheer With Upbeat Davos Outlook
After a year that brought a surprise surge in interest rates, the biggest stock drop since 2008 and a halt to major deals, plenty of finance executives lined up at the World Economic Forum’s annual meeting to say they now see reasons to be upbeat.
What the US Debt-Ceiling Battle Means for Your Money
Treasury Secretary Janet Yellen has declared that the US has hit its federal debt limit, kicking off an intense political battle that puts the global financial system at risk.
Fed's Brainard Favors High Rates for Some Time to Cool Inflation
Federal Reserve Vice Chair Lael Brainard said interest rates will need to stay elevated for a period to further cool inflation that’s showing signs of slowing but is still too high.
Stocks Higher Heading into the Weekend
U.S. equities are higher, as the markets look to get back to their winning ways after a two-day losing streak.
Middle-Class Hourly Wages as of December 2022
I've updated this series to include the December release of the consumer price index as the deflator and the monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $47,438, down 8.6% from 45-plus years ago. Hourly earnings are below their all-time high after adjusting for inflation.
New Year Opens Window of Opportunity for Bond Investors
Investors may be able to lock in higher yield levels notes Doug Drabik, Managing Director, Fixed Income Research and Nick Goetze, Managing Director, Fixed Income Solutions.
The Lag Effect Of The Fiscal Pig & Economic Python
The lag effect of monetary policy changes will surprise the Fed as the fiscal “pig” of stimulus begins to exit the economic “python.”
Existing-Home Sales: Retreat for 11th Consecutive Month
This morning's release of the December existing home sales showed that sales fell slightly to a seasonally adjusted annual rate of 4.02 million units from the previous month's 4.08 million. The Investing.com consensus was for 3.96 million. The latest number represents a 1.5% decrease from the previous month and its eleventh in a row. December saw a 34.0% decrease YoY.
Quarterly Letter – January 2023
Jeff and Ron Muhlenkamp review what happened in 2022 regarding inflation, interest rates, the housing market, supply disruptions, energy problems, and foreign currency turbulence.
Zillow Home Value Index: December Update
December's ZHVI came in at $357,319, slightly up from the previous month by 0.01% and up 10.8% YoY. After adjusting for inflation, the real figures are -0.77% MoM and 3.02% YoY.
A Not-So-Fresh Start
The Northern Trust Economics team shares its outlook for growth, inflation, employment, and interest rates.
Strategic Income Outlook: Was This a Crazy Year or What?
2022 was a difficult year for bond investors, but the combination of high inflation and tighter Fed policy should keep yields elevated, creating materially stronger fixed income returns in the new year.
Payden & Rygel 2023 Macro Outlook: Macro Memes & Mind Viruses
We call them narratives, memes, or mind viruses.
Global Bond Sales Off to Record Start of Nearly $600 Billion
The best start to a year for bond returns is helping fuel an unprecedented debt-sale bonanza by governments and companies around the world of more than half a trillion dollars.
Macro Hedge Funds Had a Banner Year. Can They Stage an Encore?
Macro hedge funds, which look at economic trends and take advantage of dislocations across asset classes, had a banner year in 2022.
Even the Masters of the Universe Are Stumped
Bond traders were once deemed so powerful and all-knowing that Tom Wolfe described them as the “Masters of the Universe” in his classic 1987 novel “The Bonfire of the Vanities” that used Wall Street as its backdrop.
Sleepwalking on Megathreat Mountain
Whatever one’s favored terminology for describing the current moment, there is widespread agreement that we are facing unprecedented, unusual, and unexpected levels of uncertainty, auguring a future of crisis, instability, and conflict.
EM Debt Outlook: China Takes Center Stage
The Loomis Sayles Emerging Markets Debt Sector Team shares their views on growth, corporate defaults and inflation.
The Big Four: December Real Retail Sales Continue to Decline
Month-over-month nominal sales in November was down 1.15% and up 6.02% YoY. Real retail sales, calculated with the seasonally adjusted CPI, decreased by 1.07% and was down 0.38% YoY.
Weak US Retail Sales, Factory Data Heighten Recession Concerns
US retail sales fell by the most in a year and business equipment production slumped, raising concerns that the economy is losing momentum under the weight of tighter Federal Reserve policy.