Commodities

The Bureau of Labor Statistics released the August Consumer Price Index data this morning. The year-over-year non-seasonally adjusted Headline CPI came in at 1.31%, up from 0.99% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 1.74%, up from 1.57% the previous month and below the Fed's 2% PCE target.

The Federal Reserve has changed its inflation policy. Here’s what it may mean for markets.

Portfolio managers Taizo Ishida and Michael Oh, CFA, explore the growth drivers for Asia's new economy sectors, including how to measure and assign potential future value of intangible assets.

Emerging markets overall felt a dose of optimism in August amid hopes for a COVID-19 vaccine, continued easy monetary policy globally and improving economic data pointing toward recovery. Our emerging markets equity team breaks down the key trends, news and events it has an eye on, and shares its latest market outlook.

Seven reasons Americans are “nowhere near as alienated from their democratic system” as Germans in the 1920s.

We hear numerous market strategists talk about stocks which are going up because “there is no alternative” to owning them. In the Wall Street vernacular, this goes by the phrase TINA.

Throughout the second half of 2020, a deterioration within the U.S. Dollar has been among the primary themes in focus, and understanding the Dollar’s impact on the positions in our portfolios is important.

The legendary fund manager, Bob Rodriguez, doesn’t like either stocks or bonds, but he explains the particular strategy he is pursuing for buying hard assets.

As against the widely touted long-run, expected real returns from equities of 6.5%, we show that the true expectation for global stocks is in the range of 4.5 to 5%.

Supply is getting tight. Helium is notoriously difficult and expensive to store, for the very good reason that it escapes every known container over time.

This commentary has been updated to include this morning's release of Nonfarm Employment. August's 1.37M increase in total nonfarm payrolls had revisions that resulted in 39K fewer jobs than previously reported. The Investing.com consensus was for 1.4M jobs gained and the unemployment rate to decrease to 9.8%.

Franco-Nevada is the world’s largest gold royalty and streaming company. This means the firm invests in gold and mines, but indirectly, the idea being to provide investors with exposure to gold prices and gold exploration while limiting the risks of investing directly in mining companies.

The U.S. International Trade in Goods and Services, also known as the FT-900, is published monthly by the Bureau of Economic Analysis with data going back to 199 and details U.S. exports and imports of goods and services. Today's headline number of -63.56B was more negative than the Investing.com forecast of -58.0B.

Join the Nasdaq Dorsey Wright (NDW) analyst team to discuss market developments through a technical lens and highlight areas to monitor in the coming weeks. Topics Include: Updated support levels for the S&P 500 as it hits new all-time highs, timely commentary on the commodities space as it continues to demonstrate strength, and material sector pivots as we near the month of September.

The Federal Reserve convenes a major economic symposium in late August each year in Jackson Hole, Wyoming, the popular ski resort. Lots of Fed officials, banking big-wigs and other financial market players attend each year, along with a collection of media correspondents who pay thousands of dollars to be there.

Why there’s still value in a value allocation.

You know it’s a bubble when you have to edit the Y axis on all of your charts because valuations have broken above every historical peak, and estimated future market returns have fallen beyond the lowest points in history, including 1929.

As of August 31, the 10-year note is 20 basis points above its historic closing low of 0.52%, reached on August 4.

While listening to Rob Arnott on a recent Morningstar podcast, I became enamored with something that Arnott was emphatic about. He pointed out that the structural advantage of being a contrarian isn’t being smarter. Every winning purchase in the stock market comes as an opportunity cost to the seller.

Bullion is benefiting from the dollar’s weakness coupled with continued risk hedging, and a breach of the $2,000 mark will “fan the flames of interest.”

This morning the Institute for Supply Management published its monthly Manufacturing Report for August. The latest headline Purchasing Managers Index (PMI) was 56.0, an increase of 1.8 from 54.2 the previous month. Today's headline number was above the Investing.com forecast of 54.5 percent.

The August US Manufacturing Purchasing Managers' Index conducted by Markit came in at 53.1, up 1.8 from the 50.9 final July figure. Markit's Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.

Many investors are looking for emerging signs of a return to normalcy from the coronavirus crisis. While there are many indicators to choose from, we’ve assembled a group of signals, with the help of big data, that may point the way.

Despite reaching all-time highs above $2,000 per troy ounce this summer, gold prices might still have room to run, according to Franklin Equity Group’s Steve Land. In addition, he shares some reasons why the current environment could present new opportunities for gold-focused miners to redefine themselves as stronger businesses.

Asset managers and others are furious over a proposed DOL rule that they say is based on a flawed and unsupported assumption that ESG funds give up financial returns in favor of “non-pecuniary” rewards.

In a new quarterly letter to GMO clients, head of asset allocation Ben Inker highlights the sea change in the utility of government bonds and Matt Kadnar, member of GMO’s Asset Allocation team, weighs in on today’s low bond yields.

In response to the unprecedented fiscal stimulus, investors have turned to perceived “safe havens,” specifically gold, to hedge their portfolios against the prospect of runaway inflation. But does history support this belief?

Key Takeaways

• Worst quarter of growth may be followed by the best
• More records in store for the equity market
• Highs and lows for oil while gold soars on uncertainty

The Fed updated its monetary policy framework, moving to a flexible average inflation target. That means that the central bank will target an average inflation rate of 2% (as measured by the PCE Price Index) over time.

The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, rose to 51.2 in August from 51.9 in July, which is in expansion territory. Values above 50.0 indicate expanding manufacturing activity.

The Federal Reserve just tweaked how it thinks about inflation, and this could have a huge impact on gold and gold mining stocks. But Fed Chair Jerome Powell’s speech raises the question yet again if we’re even measuring inflation accurately in the U.S.

With cyclical stocks rebounding, portfolio manager Russ Koesterich emphasizes that being discerning is key.

During the coronavirus downturn and rebound, US growth stocks outpaced value stocks by a record margin. Now growth stocks seem expensive, but that depends on how you look at it.

Personal Income (excluding Transfer Receipts) in July rose 1.03% and is down 1.7% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, Real Personal Income (excluding Transfer Receipts) MoM was up 0.71%. The real number is down 2.7% year-over-year.

The Fed is about to bestow more gifts on the market, stoking a new phase in the risk rally, according to Morgan Stanley Investment Management portfolio manager Jim Caron.

The Census Bureau has posted the Advance Report on Durable Goods New Orders. This series dates from 1992 and is not adjusted for either population growth or inflation. Let's now review Durable Goods data with two adjustments.

With multiple future scenarios as to how climate change may play out, there are also multiple potential consequences in store for investments. This post takes a detailed look at climate-change risk management.

This week, we continue with a bullish tilt toward equity positioning as the SPDR S&P 500 ETF (SPY) and the QQQ Trust (QQQ) trade at new all-time highs.

Since the inflation cocktail is closely related to value stock outperformance, we are very excited about our future value investing possibilities.

With today's release of the June S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index saw no change month over month which is cut to -0.09% with inflation adjustment.

Despite reaching record highs earlier this month, gold remains attractively valued, according to our framework.

In the minutes of the July 28-29 FOMC meeting, participants expected no change in policy rates anytime soon, but officials saw a need for more clarity regarding the likely path, such as adopting output-based forward guidance.

Although many suggest that wealth inequality is attributable to globalization and technological advancements, what they miss is the role of speculative finance and the complicity of the central bank in driving this process.

Led by some moderation in the growth of production- and employment-related indicators, the Chicago Fed National Activity Index (CFNAI) declined to +1.18 in July from +5.33 in June. Three of the four broad categories of indicators used to construct the index made positive contributions in July, but all four categories decreased from June. The index’s three-month moving average, CFNAI-MA3, rose to +3.59 in July from –2.78 in June.

The number of Americans filing for initial jobless claims this week spiked above 1 million, while the number of deaths attributed to COVID-19 remains above 1,000 a day. But there was much else to celebrate.

Far from signaling its imminent demise as the main global reserve currency, the greenback's sharp depreciation is to be expected in the current macroeconomic context. The forces that could erode the dollar's hegemony remain slower-moving and farther off.

Berkshire unexpectedly announced that, as of the end of the second quarter, it held a $565 million position in Barrick Gold, the world’s second largest producer of the metal.

Treasury bond yields have been drifting quietly lower since early June. But there is more going on beneath the surface than it might seem at first glance. Real yields—nominal yields less inflation—have declined steeply into negative territory. While nominal yields are near record-low levels from the deep economic decline, inflation expectations are picking up.

Emerging countries have been in the midst of a crisis that is not of their own making. A great majority of these countries are navigating the crisis fairly well.

Research Affiliates discusses the increase in portfolio tactical shifts and recent research efforts supporting the All Asset strategies in today’s evolving investment environment.

There are numerous factors which can cause the price of gold to rise significantly, but I don’t believe inflation fears are the main driver behind gold’s recent surge. I believe it has much more to do with uncertainty and fears surrounding the COVID-19 pandemic. But I’m getting ahead of myself.

Initial claims for unemployment benefits fell below one million for the first time since mid-March (20 weeks). However, unadjusted claims had already dipped below that level a week earlier. Unadjusted claims totaled 831,000.

The overall economic outlook depends on the virus, efforts to contain it, and the degree of fiscal support. We’ve had a sharp- but-partial rebound in May and June, following a steep decline in March and April. The pace of improvement is expected to moderate. The impact of the pandemic has not been felt evenly.

When it comes down to it, there are a few key macro variables that are highly correlated with the relative performance of value vs growth – most of them measuring the reflationary impulse in the system in different ways.

The price of gold had its first down week since early June, ending a spectacular nine-week rally. The yellow metal briefly fell below $1,900 an ounce on Wednesday as stocks neared their all-time closing high and the 10-year Treasury yield jumped on record supply.

There are five evolving growth themes that could generate considerable economic value over the next five to 10 years.

This year our annual summertime report, “Charts for the Beach”, visually highlights newsworthy issues that aren’t yet in the news.

The equity rally has been dominated by technology and other growth companies, some of which have valuations that already reflect earnings that are two years out, Wien said.

Jeffrey Gundlach, who famously predicted Donald Trump’s victory in 2016, said that the president will defeat the presumptive Democratic nominee, Joe Biden, in November. He also dimmed the expectations of fixed-income investors when he said to avoid short- and long-term bonds.

Many investors seem to have misperceptions when it comes to Russia’s economy and the companies located there. Our Emerging Markets Equity Institutional Portfolio Manager Nicole Vettise explains how Russia’s economy offers investors a mix of old and new industries, and compelling areas of investment opportunity as a result.

This week we drill down on the trends in the US equity market as the SPDR S&P 500 ETF (SPY) puts the February highs in its sights. The trends across the major market ETFs remain to the upside.

Many investors are looking for emerging signs of a return to normalcy from the coronavirus crisis. While there are many indicators to choose from, we’ve assembled a group of signals, with the help of big data, that may point the way.

Some emerging markets have been coping with the COVID-19 crisis better than others, and their economies are in different stages of recovery. Our emerging markets equity team highlights a few—and offers thoughts on why the pandemic has accelerated some existing fundamental and technological trends.

We have a big economic calendar with reports on inflation, small business optimism, retail sales, consumer confidence, and unemployment claims. I expect the data to continue occupation of the back seat.

All that remained, as Andrew Jackson left office, was to segregate the Treasury’s money balances by having the funds held in regional sub-Treasury, independent depositories not linked to any private or state-chartered bank. What would get in the way would be the first presidential campaign argued on the question of race.

For the week, airlines stocks increased 9 percent, its best weekly performance since early June. Wheels up!

Russian stocks, as measured by the MOEX Russia Index, turned positive for the year on Tuesday of this week after plunging 30 percent due to the pandemic. This puts them slightly behind the S&P 500...

The 30 most economically damaged industry categories could be de-listed before tomorrow’s market open, and it would hardly shave more than a few percentage points off the S&P 500.

Gold could extend gains as governments and central banks respond to slowing growth with vast amounts of stimulus.

Despite the drumbeat of narratives about the reversal of the growth trade and even some advocating for outperformance on the part of small cap value, the bigger picture trends have not changed.

Investors love ETFs, especially during these uncertain times.

The Loomis Sayles Alpha Strategies Team answers three questions on corporate health, regime models and opportunities in emerging markets.

In 1832, Martin Van Buren helped Andrew Jackson decide precisely when he would end the charter for the Second Bank of the United States – the only American central bank of issue before the establishment of the Federal Reserve.

Broader equity market returns serve as a poor proxy for an average stock’s return as well as that of a buy-and-hold strategy’s expected outcomes. A much larger proportion of all stocks contribute negatively to overall market’s lifetime returns.

Loomis Sayles Portfolio Manager Ashish Chugh provides an update on emerging market equities and the impact COVID-19 has had on them recently.