E-commerce has been gaining traction for years. As an investment opportunity, there is substantial growth potential ahead. However, not all online retailers are created equal.
Join ProShares on June 29 to explore:
The latest index came in at 27, up 1 from last month's 26, indicating expansion in June. The future outlook increased to 37 this month from 33. Here is a snapshot of the complete Kansas City Fed Manufacturing Survey.
Many economies are now in advanced stages of economic reopening, but some are still struggling.
Like most risk assets, emerging market (EM) equities were hit hard by the pandemic, but they’ve made a remarkable rebound. From the low on 23 March 2020 to 18 June 2021, the MSCI Emerging Markets Equity Index gained 80%.
Growth stocks have lagged cyclicals so far in 2021, but we remain steadfast in our belief that secular growth is the key to generating long-term returns. In this piece, we discuss how we find attractive opportunities in the small cap universe.
The Fed meeting last week led to higher asset price volatility across asset classes.
This morning's seasonally adjusted 411K new claims, down 7K from the previous week's revised figure, was worse than the Investing.com forecast of 380K.
Over the past few months, economic recoveries have been uneven across regions and sectors.
The US birthrate fell to another record low in 2020, extending a trend which began in the mid-1960s, and this pattern is also happening in most other parts of the world.
Sir John Templeton famously said that “this time is different” are the four most dangerous words for investors.
This morning's release of the May New Home Sales from the Census Bureau came in at 769K, down 5.9% month-over-month from a revised 817K in April. The Investing.com forecast was for 870K. The median home price is now at $374.4K.
The wave of air rage as U.S. airlines attempt to return to normalcy while the pandemic subsides has reached unprecedented levels, according to data released Tuesday.
Investors are witnessing the “biggest U.S. fantasy trip of all time” in the stock market thanks to a clueless Federal Reserve, speedy stimulus and surprising success with Covid-19 vaccinations, according to Jeremy Grantham, financial historian and co-founder of the investment firm GMO.
New York Life Insurance recently celebrated its 175th anniversary. It is the largest mutual life insurance company in the U.S., with approximately $605 billion in assets under management. It is very committed to helping advisors deliver innovative solutions to help their clients achieve financial security in their retirement. Here today to talk about some of those solutions and the ways in which New York Life educates advisors is Dylan Huang.
This morning's release of the May Existing-Home Sales showed that sales fell to a seasonally adjusted annual rate of 5.8 million units from the previous month's 5.85 million. The Investing.com consensus was for 5.72 million. The latest number represents a 0.9% decrease from the previous month and its fourth in a row.
Chief Economist Scott Brown discusses current economic conditions.
Through the first half of 2021, fixed-income investors have been faced with their greatest fear: inflation.
It is possible that good data could be interpreted as bad news for the U.S. stock market at least in the near-term as strong economic data, especially on jobs, could prompt the Fed to unwind earlier.
All eight indexes on our world watch list posted gains through June 14, 2021. The top performer is France's CAC 40 with a gain of 18.9%, our own S&P 500 is in second is with a gain of 12.5% and Germany's DAXK is in third with a gain of 11.2%. Coming in last is China's Shanghai with a gain of 1.6%.
Managed futures strategies have historically delivered attractive returns over the long run with low equity correlations.
The Fed is talking about tapering its asset purchases.
Why consider volatility as a separate asset class? Because it is endemic.
Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) increased to +0.29 in May from –0.09 in April. Three of the four broad categories of indicators used to construct the index made positive contributions in May, and three categories improved from April. The index’s three-month moving average, CFNAI-MA3, rose to +0.81 in May from +0.17 in April.
Domestic business travel is well on its way to recovery. Forty percent of poll respondents said that business travel within the country where their firm is based has already resumed, while a third said that their company has either decided on a start date or is working toward a date.
The Fed made no changes to its interest rate or balance sheet policies; but some of the language in its statement was tweaked, reflecting recent hotter inflation data.
Japanese equities have long been overlooked by many global investors.
As Europe’s economy continues to recover from COVID-19, it appears the central bank will remain accommodative, but for how long?
"Travel on all roads and streets changed by +54.6% (+90.6 billion vehicle miles) for April 2021 as compared with April 2020. Travel for the month is estimated to be 256.5 billion vehicle miles." The 12-month moving average was up 3.2% month-over-month and down 6.5% year-over-year. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) was up 3.2% month-over-month and down 7% year-over-year.
The latest Conference Board Leading Economic Index (LEI) for May was up 1.3% from the April final figure of 113.0 and at a record high.
U.S. pork plants are slowing down, threatening to derail the biggest rally pig farmers have seen in years and potentially raising costs for meat giants such as JBS SA.
The latest Manufacturing Index came in at 30.7, down 1.8 from last month's 31.5. The 3-month moving average came in at 37.5, down from 39.2 last month. Since this is a diffusion index, negative readings indicate contraction, positive ones indicate expansion. The Six-Month Outlook came in at 69.2, up 16.5 from the previous month's 52.7.
We begin with last week’s surprising report on inflation in May, which saw consumer prices rise the most in 13 years.
Let's take a look at major sectors in the ETF world since February 21, 2020. All but two sectors, hotels and airlines, have recovered since then. Retail has bounced back the fastest, while hotels and airlines are still lagging. Individuals are returning to travel rapidly as more vaccines are administered.
From the ocean to the mountains, remote work fueled an unprecedented boom for vacation homes across the U.S.
Chicken-sandwich fever means poultry is pacing U.S. food inflation in the meat case.
Month-over-month nominal sales in May was down 1.35% but was up 28.15% YoY. Real Retail Sales, calculated with the seasonally adjusted Consumer Price Index, decreased by 1.98% and was up 22.13% YoY.
The National Association of Home Builders (NAHB) Housing Market Index (HMI) is a gauge of builder opinion on the relative level of current and future single-family home sales. It is a diffusion index, which means that a reading above 50 indicates a favorable outlook on home sales; below 50 indicates a negative outlook. The latest reading of 81 is down slightly from last month.
Commodities prices have been moving higher this spring amid rising demand and rising inflation expectations globally as economies emerge from the pandemic.
The Census Bureau's Advance Retail Sales Report for May was released this morning. Headline sales came in at -1.35% month-over-month to two decimals and below the Investing.com forecast of -0.8%. Core sales (ex Autos) came in at -0.66% MoM.
This morning's release of the May Producer Price Index (PPI) for Final Demand was at 0.8% month-over-month seasonally adjusted, up from a 0.6% increase last month. It is at 6.6% year-over-year, up from 6.2% last month, on a non-seasonally adjusted basis. Core Final Demand (less food and energy) came in at 0.7% MoM, unchanged from the previous month and is up 4.8% YoY NSA. Investing.com MoM consensus forecasts were for 0.6% headline and 0.5% core.
This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions at 17.4 was a decrease of 6.9 from the previous month's 24.3. The Investing.com forecast was for a reading of 23.
I spoke with Staley Cates, the vice chairman of Southeastern Asset Management, on the value opportunities he sees in the U.S. and abroad, and why his firm’s process has generated superior returns for its partners/investors.
The latest Fed balance sheet shows a total net worth that is 127% above the 2009 trough. The nominal Q1 net worth is up 3.8% from the previous quarter and up 23% year-over-year.
COVID made demographic challenges even more complicated, but that hasn't slowed demand for houses in the U.S.
To get the facts, sometimes you need to look beneath the surface.
The investment opportunities are constantly changing as economic reopenings roll on.
A brief monthly update on what's happening in the municipal bond market.
I’ve been writing about the possibility of higher inflation for months, and now it looks to have finally made landfall. The headline consumer price index (CPI) came in at 5% year-over-year, the highest in over a decade.
Here is a table showing the annualized change in Headline and Core CPI, not seasonally adjusted, for each of the past six months. Also included are the eight components of Headline CPI and a separate entry for Energy, which is a collection of sub-indexes in Housing and Transportation. We can make some inferences about how inflation is impacting our personal expenses depending on our relative exposure to the individual components.
With the post-pandemic US economy on the mend, a new threat has emerged: inflation.
Let's do some analysis of the Consumer Price Index, the best-known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U.
We've updated our monthly workforce analysis to include last Friday's Employment Report for May. The unemployment rate inched fell to 5.8%, and the number of new nonfarm jobs (a relatively volatile number subject to extensive revisions) came in at 559K.
We've updated this series to include the May release of the Consumer Price Index as the deflator and the monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $43,904, down 6.1% from 45-plus years ago.
The Bureau of Labor Statistics released the May Consumer Price Index data this morning. The year-over-year non-seasonally adjusted Headline CPI came in at 4.99%, up from 4.16% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 3.80%, up from 2.96% the previous month and above the Fed's 2% PCE target.
Given recent history, policymakers would be unwise merely to hope for a best-case scenario in which a strong and quick economic recovery redeems the enormous run-up in debt, leverage, and asset valuations.
Let's take a closer look at Friday's employment report numbers on Full and Part-Time Employment.
Disappointing returns for healthcare stocks through the market’s recovery from the pandemic have raised concerns about the sector.
The latest monthly employment report showed a gain of 559K nonfarm jobs, which consists of a gain of 556K service-providing jobs and a gain of 3K goods-producing jobs.
Over the past year, a surge of investors drove high-yield bond prices back to pre-pandemic levels.
The recovery is now over; a new global economic expansion has begun.
As some of you know already, I was in Miami this past weekend attending Bitcoin 2021.
The latest JOLTS report (Job Openings and Labor Turnover Summary), with data through April, is now available.
The headline number for May came in at 99.6, down 0.2 from the previous month. The index is at the 49th percentile in this series.
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 -68.9B was at the Investing.com forecast.
Far from signaling the return of significant inflation, temporary price increases are exactly what one would expect in a recovery following an economic shutdown.
Crisis investments may yield a lasting boost to productivity, while Australia's restrictions pose a lingering risk.
This commentary has been updated to include Friday morning's release of Nonfarm Employment. May's 559K increase in total nonfarm payrolls had revisions that resulted in 27K more jobs than previously reported. The Investing.com consensus was for 650K jobs gained and the unemployment rate to fall to 5.9%.
According to data provided by The Block, mining revenue on the Ethereum blockchain topped $2.35 billion in May—a new all-time high—compared to $1.45 billion for Bitcoin. Transaction fees alone contributed over $1 billion.
The surge in early retirements spurred by the pandemic is increasing inequality among Baby Boomers in the U.S., with older Black workers without a college degree more likely to be forced to exit the labor market prematurely, a study showed.
As more people are getting vaccinated and economic conditions return to normal, Franklin Equity Group’s Jonathan Curtis says the digital transformation themes that accelerated during the COVID-19 crisis are still just getting started.
The Institute of Supply Management (ISM) has now released the May Services Purchasing Managers' Index (PMI). The headline Composite Index is at percent 64, up 1.3 from 62.7 last month and an all-time high. Today's number came in above the Investing.com forecast of 63 percent.
The May US Services Purchasing Managers' Index conducted by Markit came in at 70.4 percent, up 5.7 from the final April estimate of 64.7 and a record high.
Israel health officials have found a probable link between Pfizer Inc. and BioNTech SE’s coronavirus vaccine and dozens of cases of heart inflammation in young men following the second dose of the vaccine, the Health Ministry said late Tuesday.
As special purpose acquisition companies come under growing scrutiny, one basic calculation that was off the mark for some of them is calling into question all other projections: the interest income the companies said they expected to earn on their cash.
In 2021, municipal (“muni”) bonds have been a tough asset class to manage due to overwhelming demand and limited supply in the market.
Here is the latest update of a popular market valuation method using the most recent Standard & Poor's "as reported" earnings and earnings estimates and the index monthly average of daily closes for the past month.
A cyberattack on JBS SA, the largest meat producer globally, forced the shutdown of all its U.S. beef plants, wiping out output from facilities that supply almost a quarter of American supplies.
Americans are shedding their masks, buying concert tickets and booking vacations like it’s 2019. But there’s one thing that’s doesn’t appear to be going anywhere as the pandemic fades: remote work.
Once ideas about how to manage the economy become entrenched, it can take generations to dislodge them. Something big usually has to happen to jolt policy onto a different track. Something like Covid-19.
Inflation is likely to remain high in 2021. The primary source of price pressures is the rebound in commodity prices after their sharp collapse last year.
This morning the Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for May. The latest general business activity index came in at 34.9, down 2.4 from 37.3 in April. All figures are seasonally adjusted.
This morning the Institute for Supply Management published its monthly Manufacturing Report for May. The latest headline Purchasing Managers Index (PMI) was 61.2, an increase of 0.5 from 60.7 the previous month and in expansion territory. Today's headline number was above the Investing.com forecast of 60.9 percent.
The May US Manufacturing Purchasing Managers' Index conducted by Markit came in at 62.1, up 0.5 from the 60.5 final April figure. Markit's Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.
Why commodity markets have done so exceptionally well
The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, jumped to 75.2 in May from 72.1 in April, which is in expansion territory and its highest since 1973. Values above 50.0 indicate expanding manufacturing activity.
Natural herd immunity in predominantly young emerging markets populations looks set to offset slower vaccine rollouts, setting the stage for a resurgence in economic growth.
The saga of local public health officials tasked with fighting epidemic disease, and their clashes with national health authorities who didn’t care, was a perfect recipe for putting readers to sleep. But Michael Lewis made it into high drama.
The International Energy Agency (IEA) was founded in 1974 in response to oil embargos the previous year that caused the global price of oil to surge 300% from $3 per barrel to $12 per barrel. From the start, the IEA’s mission has been to help member nations deal with major oil supply disruptions.
COVID-19: Coronavirus Coverage
Amazon is Big, E-Commerce is Bigger: The (Still!) Early Opportunity of Online Retail
E-commerce has been gaining traction for years. As an investment opportunity, there is substantial growth potential ahead. However, not all online retailers are created equal.
Join ProShares on June 29 to explore:
Kansas City Fed Survey: Activity Remained Strong in June
The latest index came in at 27, up 1 from last month's 26, indicating expansion in June. The future outlook increased to 37 this month from 33. Here is a snapshot of the complete Kansas City Fed Manufacturing Survey.
Global Economic Outlook: Summer Boom
Many economies are now in advanced stages of economic reopening, but some are still struggling.
The New Drivers Behind EM Equity’s Remarkable Rebound
Like most risk assets, emerging market (EM) equities were hit hard by the pandemic, but they’ve made a remarkable rebound. From the low on 23 March 2020 to 18 June 2021, the MSCI Emerging Markets Equity Index gained 80%.
Why Secular Growth Matters, and How We Find It
Growth stocks have lagged cyclicals so far in 2021, but we remain steadfast in our belief that secular growth is the key to generating long-term returns. In this piece, we discuss how we find attractive opportunities in the small cap universe.
Opportunities In Local Currency Assets After The Sharp Dollar Move
The Fed meeting last week led to higher asset price volatility across asset classes.
Weekly Unemployment Claims: Down 7K
This morning's seasonally adjusted 411K new claims, down 7K from the previous week's revised figure, was worse than the Investing.com forecast of 380K.
Inflation Inflection
Over the past few months, economic recoveries have been uneven across regions and sectors.
Birthrates Around World Are Falling – Should We Worry?
The US birthrate fell to another record low in 2020, extending a trend which began in the mid-1960s, and this pattern is also happening in most other parts of the world.
Quick Thoughts: Sourcing Income in Bonds, Real Estate, and Multi-Asset Solutions
Sir John Templeton famously said that “this time is different” are the four most dangerous words for investors.
New Home Sales Down 6% in May
This morning's release of the May New Home Sales from the Census Bureau came in at 769K, down 5.9% month-over-month from a revised 817K in April. The Investing.com forecast was for 870K. The median home price is now at $374.4K.
FAA Fines for Unruly Passengers This Year Surge Past $500,000
The wave of air rage as U.S. airlines attempt to return to normalcy while the pandemic subsides has reached unprecedented levels, according to data released Tuesday.
Grantham Calls Meme Investing ‘Biggest U.S. Fantasy Trip’ Ever
Investors are witnessing the “biggest U.S. fantasy trip of all time” in the stock market thanks to a clueless Federal Reserve, speedy stimulus and surprising success with Covid-19 vaccinations, according to Jeremy Grantham, financial historian and co-founder of the investment firm GMO.
Minisode - The Future of the Retirement Income Industry
New York Life Insurance recently celebrated its 175th anniversary. It is the largest mutual life insurance company in the U.S., with approximately $605 billion in assets under management. It is very committed to helping advisors deliver innovative solutions to help their clients achieve financial security in their retirement. Here today to talk about some of those solutions and the ways in which New York Life educates advisors is Dylan Huang.
Existing-Home Sales: Properties Typically Sold in 17 Days
This morning's release of the May Existing-Home Sales showed that sales fell to a seasonally adjusted annual rate of 5.8 million units from the previous month's 5.85 million. The Investing.com consensus was for 5.72 million. The latest number represents a 0.9% decrease from the previous month and its fourth in a row.
Weekly Economic Commentary
Chief Economist Scott Brown discusses current economic conditions.
The Great Transitory Debate. Breaking Down The Latest Inflation Numbers.
Through the first half of 2021, fixed-income investors have been faced with their greatest fear: inflation.
Is Good Data Now Bad News?
It is possible that good data could be interpreted as bad news for the U.S. stock market at least in the near-term as strong economic data, especially on jobs, could prompt the Fed to unwind earlier.
World Markets Update: June 21, 2021
All eight indexes on our world watch list posted gains through June 14, 2021. The top performer is France's CAC 40 with a gain of 18.9%, our own S&P 500 is in second is with a gain of 12.5% and Germany's DAXK is in third with a gain of 11.2%. Coming in last is China's Shanghai with a gain of 1.6%.
PIMCO Trends: Managed Futures: Seeking Diversification and Returns
Managed futures strategies have historically delivered attractive returns over the long run with low equity correlations.
The Fed's Next Steps
The Fed is talking about tapering its asset purchases.
The Epidemiology of Volatility Transmission: Part 2
Why consider volatility as a separate asset class? Because it is endemic.
Chicago Fed: "Index points to a pickup in economic growth in May"
Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) increased to +0.29 in May from –0.09 in April. Three of the four broad categories of indicators used to construct the index made positive contributions in May, and three categories improved from April. The index’s three-month moving average, CFNAI-MA3, rose to +0.81 in May from +0.17 in April.
When Will Business Travel Recover? Sooner Than You Might Think
Domestic business travel is well on its way to recovery. Forty percent of poll respondents said that business travel within the country where their firm is based has already resumed, while a third said that their company has either decided on a start date or is working toward a date.
Fed Still Hasn’t Found What it’s Looking For
The Fed made no changes to its interest rate or balance sheet policies; but some of the language in its statement was tweaked, reflecting recent hotter inflation data.
Japanese Stocks Regain Luster for Post-Pandemic Markets
Japanese equities have long been overlooked by many global investors.
European Fixed Income Finds Central Bank Support
As Europe’s economy continues to recover from COVID-19, it appears the central bank will remain accommodative, but for how long?
America's Driving Habits as of April 2021
"Travel on all roads and streets changed by +54.6% (+90.6 billion vehicle miles) for April 2021 as compared with April 2020. Travel for the month is estimated to be 256.5 billion vehicle miles." The 12-month moving average was up 3.2% month-over-month and down 6.5% year-over-year. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) was up 3.2% month-over-month and down 7% year-over-year.
Peak Inflation
Chief Economist Scott Brown discusses current economic conditions.
CB Leading Economic Index: Another Record High
The latest Conference Board Leading Economic Index (LEI) for May was up 1.3% from the April final figure of 113.0 and at a record high.
Slower Pig Slaughtering Has Farmers Worried Hog Rally Has Peaked
U.S. pork plants are slowing down, threatening to derail the biggest rally pig farmers have seen in years and potentially raising costs for meat giants such as JBS SA.
Philly Fed Mfg Index: "Current Indicators Remain Elevated"
The latest Manufacturing Index came in at 30.7, down 1.8 from last month's 31.5. The 3-month moving average came in at 37.5, down from 39.2 last month. Since this is a diffusion index, negative readings indicate contraction, positive ones indicate expansion. The Six-Month Outlook came in at 69.2, up 16.5 from the previous month's 52.7.
Consumer Prices Rise Most In 13 Years, Up 5% In May
We begin with last week’s surprising report on inflation in May, which saw consumer prices rise the most in 13 years.
UPDATE: COVID-19, The Markets, and The Economy
Let's take a look at major sectors in the ETF world since February 21, 2020. All but two sectors, hotels and airlines, have recovered since then. Retail has bounced back the fastest, while hotels and airlines are still lagging. Individuals are returning to travel rapidly as more vaccines are administered.
Remote Work Drives Massive Vacation-Home Sales Boom in the U.S.
From the ocean to the mountains, remote work fueled an unprecedented boom for vacation homes across the U.S.
Poultry Prices Soar to Record Amid U.S. Chicken-Sandwich Wars
Chicken-sandwich fever means poultry is pacing U.S. food inflation in the meat case.
The Big Four: May Real Retail Sales Down Almost 2%
Month-over-month nominal sales in May was down 1.35% but was up 28.15% YoY. Real Retail Sales, calculated with the seasonally adjusted Consumer Price Index, decreased by 1.98% and was up 22.13% YoY.
NAHB Housing Market Index: "Rising Material Challenges, Declining Builder Sentiment"
The National Association of Home Builders (NAHB) Housing Market Index (HMI) is a gauge of builder opinion on the relative level of current and future single-family home sales. It is a diffusion index, which means that a reading above 50 indicates a favorable outlook on home sales; below 50 indicates a negative outlook. The latest reading of 81 is down slightly from last month.
Shortages, Resurgent Demand and Rising Inflation Expectations Lift Commodities
Commodities prices have been moving higher this spring amid rising demand and rising inflation expectations globally as economies emerge from the pandemic.
Retail Sales Down in May
The Census Bureau's Advance Retail Sales Report for May was released this morning. Headline sales came in at -1.35% month-over-month to two decimals and below the Investing.com forecast of -0.8%. Core sales (ex Autos) came in at -0.66% MoM.
May Producer Price Index: Core Final Demand Up 0.7% MoM
This morning's release of the May Producer Price Index (PPI) for Final Demand was at 0.8% month-over-month seasonally adjusted, up from a 0.6% increase last month. It is at 6.6% year-over-year, up from 6.2% last month, on a non-seasonally adjusted basis. Core Final Demand (less food and energy) came in at 0.7% MoM, unchanged from the previous month and is up 4.8% YoY NSA. Investing.com MoM consensus forecasts were for 0.6% headline and 0.5% core.
Empire State Mfg Survey: Slower Expansion in June
This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions at 17.4 was a decrease of 6.9 from the previous month's 24.3. The Investing.com forecast was for a reading of 23.
Staley Cates: Southeastern’s Advantage as a Value Investor
I spoke with Staley Cates, the vice chairman of Southeastern Asset Management, on the value opportunities he sees in the U.S. and abroad, and why his firm’s process has generated superior returns for its partners/investors.
Q1 2021 Household Net Worth: The "Real" Story
The latest Fed balance sheet shows a total net worth that is 127% above the 2009 trough. The nominal Q1 net worth is up 3.8% from the previous quarter and up 23% year-over-year.
Economic Commentary: Demographics, Housing, Olympics
COVID made demographic challenges even more complicated, but that hasn't slowed demand for houses in the U.S.
Schwab Market Perspective: Beneath the Surface
To get the facts, sometimes you need to look beneath the surface.
Non-U.S. Markets Brimming In Investment ‘Excitement’
The investment opportunities are constantly changing as economic reopenings roll on.
Monthly Municipal Market Update, May 2021
A brief monthly update on what's happening in the municipal bond market.
Transitory or Not, Inflation Is Here. It Could Be Much Higher Than You Realize
I’ve been writing about the possibility of higher inflation for months, and now it looks to have finally made landfall. The headline consumer price index (CPI) came in at 5% year-over-year, the highest in over a decade.
Inflation: The Components
Here is a table showing the annualized change in Headline and Core CPI, not seasonally adjusted, for each of the past six months. Also included are the eight components of Headline CPI and a separate entry for Energy, which is a collection of sub-indexes in Housing and Transportation. We can make some inferences about how inflation is impacting our personal expenses depending on our relative exposure to the individual components.
Muni Strategies for an Inflationary Climate
With the post-pandemic US economy on the mend, a new threat has emerged: inflation.
Components of the CPI: May 2021
Let's do some analysis of the Consumer Price Index, the best-known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U.
U.S. Workforce: May 2021 Update
We've updated our monthly workforce analysis to include last Friday's Employment Report for May. The unemployment rate inched fell to 5.8%, and the number of new nonfarm jobs (a relatively volatile number subject to extensive revisions) came in at 559K.
Middle-Class Wages in May 2021
We've updated this series to include the May release of the Consumer Price Index as the deflator and the monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $43,904, down 6.1% from 45-plus years ago.
Consumer Price Index: May Headline at 5%
The Bureau of Labor Statistics released the May Consumer Price Index data this morning. The year-over-year non-seasonally adjusted Headline CPI came in at 4.99%, up from 4.16% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 3.80%, up from 2.96% the previous month and above the Fed's 2% PCE target.
The Return of the Finance Threat?
Given recent history, policymakers would be unwise merely to hope for a best-case scenario in which a strong and quick economic recovery redeems the enormous run-up in debt, leverage, and asset valuations.
Full-time and Part-time Employment: A Deeper Look
Let's take a closer look at Friday's employment report numbers on Full and Part-Time Employment.
Healthcare Stocks: Four Questions for the Recovery
Disappointing returns for healthcare stocks through the market’s recovery from the pandemic have raised concerns about the sector.
May Employment: Services Vs. Goods Producing Jobs
The latest monthly employment report showed a gain of 559K nonfarm jobs, which consists of a gain of 556K service-providing jobs and a gain of 3K goods-producing jobs.
High Yield: Rising Stars and Other Omens
Over the past year, a surge of investors drove high-yield bond prices back to pre-pandemic levels.
2021 Mid-Year Outlook: Global Stocks and Economy
The recovery is now over; a new global economic expansion has begun.
European Union Members Ready to Begin Accepting American Travelers
As some of you know already, I was in Miami this past weekend attending Bitcoin 2021.
Job Openings & Labor Turnover: April 2021 Update
The latest JOLTS report (Job Openings and Labor Turnover Summary), with data through April, is now available.
NFIB Small Business Survey: "Nearly Half of Small Businesses Unable to Fill Job Openings"
The headline number for May came in at 99.6, down 0.2 from the previous month. The index is at the 49th percentile in this series.
April Trade Deficit at $68.9B
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 -68.9B was at the Investing.com forecast.
The Inflation Red Herring
Far from signaling the return of significant inflation, temporary price increases are exactly what one would expect in a recovery following an economic shutdown.
Economic Commentary: Productivity, Australia, Returning to Work
Crisis investments may yield a lasting boost to productivity, while Australia's restrictions pose a lingering risk.
The Big Four Economic Indicators: May Employment
This commentary has been updated to include Friday morning's release of Nonfarm Employment. May's 559K increase in total nonfarm payrolls had revisions that resulted in 27K more jobs than previously reported. The Investing.com consensus was for 650K jobs gained and the unemployment rate to fall to 5.9%.
Ethereum Miners Saw Record Revenues in May
According to data provided by The Block, mining revenue on the Ethereum blockchain topped $2.35 billion in May—a new all-time high—compared to $1.45 billion for Bitcoin. Transaction fees alone contributed over $1 billion.
Surge in Early Retirements Exposes Inequalities Among U.S. Baby Boomers
The surge in early retirements spurred by the pandemic is increasing inequality among Baby Boomers in the U.S., with older Black workers without a college degree more likely to be forced to exit the labor market prematurely, a study showed.
Tech Opportunities Abound Amid Economic Reopening
As more people are getting vaccinated and economic conditions return to normal, Franklin Equity Group’s Jonathan Curtis says the digital transformation themes that accelerated during the COVID-19 crisis are still just getting started.
ISM Services: May All-Time High
The Institute of Supply Management (ISM) has now released the May Services Purchasing Managers' Index (PMI). The headline Composite Index is at percent 64, up 1.3 from 62.7 last month and an all-time high. Today's number came in above the Investing.com forecast of 63 percent.
March Markit Services PMI: "Business activity growth rate accelerates to record high in May"
The May US Services Purchasing Managers' Index conducted by Markit came in at 70.4 percent, up 5.7 from the final April estimate of 64.7 and a record high.
Israel Finds Probable Link Between Pfizer Shot, Myocarditis
Israel health officials have found a probable link between Pfizer Inc. and BioNTech SE’s coronavirus vaccine and dozens of cases of heart inflammation in young men following the second dose of the vaccine, the Health Ministry said late Tuesday.
More Evidence of How Frothy SPACs Can Be
As special purpose acquisition companies come under growing scrutiny, one basic calculation that was off the mark for some of them is calling into question all other projections: the interest income the companies said they expected to earn on their cash.
Municipal Bonds: Breaking Down The Strength In The Market In 2021
In 2021, municipal (“muni”) bonds have been a tough asset class to manage due to overwhelming demand and limited supply in the market.
P/E10: Is the Stock Market Cheap?
Here is the latest update of a popular market valuation method using the most recent Standard & Poor's "as reported" earnings and earnings estimates and the index monthly average of daily closes for the past month.
All of JBS’s U.S. Beef Plants Were Forced Shut by Cyberattack
A cyberattack on JBS SA, the largest meat producer globally, forced the shutdown of all its U.S. beef plants, wiping out output from facilities that supply almost a quarter of American supplies.
Americans Are Done With 5-Days a Week in the Office. Here’s What That Means for the Economy
Americans are shedding their masks, buying concert tickets and booking vacations like it’s 2019. But there’s one thing that’s doesn’t appear to be going anywhere as the pandemic fades: remote work.
The Covid Trauma Has Changed Economics-Maybe Forever
Once ideas about how to manage the economy become entrenched, it can take generations to dislodge them. Something big usually has to happen to jolt policy onto a different track. Something like Covid-19.
US Inflation Unlikely to Pose a Serious Threat to EM
Inflation is likely to remain high in 2021. The primary source of price pressures is the rebound in commodity prices after their sharp collapse last year.
Gaposis
Chief Economist Scott Brown discusses current economic conditions.
May Dallas Fed Manufacturing
This morning the Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for May. The latest general business activity index came in at 34.9, down 2.4 from 37.3 in April. All figures are seasonally adjusted.
May ISM Manufacturing Index: Continued Expansion
This morning the Institute for Supply Management published its monthly Manufacturing Report for May. The latest headline Purchasing Managers Index (PMI) was 61.2, an increase of 0.5 from 60.7 the previous month and in expansion territory. Today's headline number was above the Investing.com forecast of 60.9 percent.
May Markit Manufacturing: Survey Record in Orders, Supply Chain Still Affected
The May US Manufacturing Purchasing Managers' Index conducted by Markit came in at 62.1, up 0.5 from the 60.5 final April figure. Markit's Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.
Supercycle or not?
Why commodity markets have done so exceptionally well
Chicago PMI Up Again in May, Highest Since 1973
The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, jumped to 75.2 in May from 72.1 in April, which is in expansion territory and its highest since 1973. Values above 50.0 indicate expanding manufacturing activity.
Emerging Markets Through the Looking Glass: Signs of Growth Potential Post‑Pandemic
Natural herd immunity in predominantly young emerging markets populations looks set to offset slower vaccine rollouts, setting the stage for a resurgence in economic growth.
Michael Lewis on the Unlikely Trio That Defeated the Pandemic
The saga of local public health officials tasked with fighting epidemic disease, and their clashes with national health authorities who didn’t care, was a perfect recipe for putting readers to sleep. But Michael Lewis made it into high drama.
The Race for Copper, the Metal of the Future
The International Energy Agency (IEA) was founded in 1974 in response to oil embargos the previous year that caused the global price of oil to surge 300% from $3 per barrel to $12 per barrel. From the start, the IEA’s mission has been to help member nations deal with major oil supply disruptions.