There’s considerable uncertainty in today’s municipal market. Questions persist about the likelihood of rising interest rates, inflation that may not be transitory and the impact on municipalities once the benefits of fiscal stimulus fades. Active bond managers have many decisions to make and need to be nimble in a changing landscape. What’s next for municipal bonds, and how can trading and portfolio management technology help investors navigate this changing environment?
If you review the investment research articles and notes published during the 1970s and early 1980s, what you pick up is that during periods of high inflation, equity markets failed to live up to expectations.
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.
As of July 30, the 10-year note was 72 basis points above its historic closing low of 0.52%, reached on August 4, 2020
Within the space of just half a year, US President Joe Biden has completed a necessary economic-policy regime shift that started chaotically under his predecessor.
Rick Bookstaber warns that investors face the risk of a “leverage liquidity cascade,” where margin calls would trigger forced selling across asset classes.
China’s stock market pullback this year has been in line with the average annual drawdown; historically, this volatility has tended to produce double-digit annualized gains.
As of August 2, the price of Regular and Premium was up two and three cents, respectively, from the previous week. According to GasBuddy.com, California has the highest average price for Regular at $4.37 and Mississippi has the cheapest at $2.77. The WTIC end-of-day spot price closed at 71.26, down 0.9% from last week and up 50% from the beginning of the year.
With global growth rebounding amid uncertainties over inflation and COVID-19 variants, investors may want to consider a somewhat more cautious and flexible approach when seeking a consistent yield.
Was the March 2009 low the end of a secular bear market and the beginning of a secular bull?
The stock market and economy are hanging by a thread over an economic abyss. That thread is zero interest rate policy (ZIRP).
Last week, the government reported real GDP in the US grew at a 6.5% annual rate in the second quarter and was up 6.4% at an annual rate in the first half of 2021.
Quick take: Based on the July S&P 500 average of daily closes, the Crestmont P/E is 188% above its arithmetic mean and at the 100th percentile of this fourteen-plus-decade monthly metric.
In this past weekend’s newsletter, I discussed the issue of the markets next “Minsky Moment.”
The automotive market is running lean.
Financial advisors and investors demand novelty as the cost of attention. Given near-term outlooks on stock market volatility, a genuinely original analogy is Moon : tides : : VIX : volatility.
Last week witnessed a bold adventure in in-person conferencing… and lessons in how to manage clients (and their portfolios) in an unprecedented market environment. But the memorable moment at the ENGAGE conference was David Kelly’s statement that bitcoin is a cult and not a currency.
This morning the Institute for Supply Management published its monthly Manufacturing Report for July. The latest headline Purchasing Managers Index (PMI) was 59.5, a decrease of 1.1 from 60.6 the previous month and in expansion territory. Today's headline number was below the Investing.com forecast of 60.9 percent.
The July US Manufacturing Purchasing Managers' Index conducted by Markit came in at 63.4, up from the final June figure and a record high. Markit's Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.
Chief Economist Scott Brown discusses current economic conditions.
Inflation has been on the rise recently, raising concerns about long-run inflation and its impact on the spending power of those who can least afford it—investors approaching or already in retirement.
Frank Pape is the senior director, portfolio consulting for Russell Investments’ advisor and intermediary solutions business. In this interview, he discusses the latest research on how advisors can maximize the after-tax income for their clients.
You may not be familiar with the term metaverse, but if you’ve been a consumer of popular books, movies and video games over the past 30 years or so, you probably are aware of the concept.
I am worried the Fed will either let inflation become psychologically entrenched, or wait too long to stop it and spark crisis with a too-hasty response, but there are other possibilities. None are especially good.
The yield curve is a powerful indicator. More powerful than many others as May West reminds us. As the greatest reopening momentum now appears behind us, today, our All-Weather portfolio looks more all-weather than it did earlier in the year.
Valid until the market close on August 31, 2021.
The S&P 500 closed July with a monthly gain of 2.27% after a gain of 2.22% in June. At this point, after close on the last day of the month, all five S&P 500 strategies are signaling "invested" — Vanguard Total Stock Market ETF (VTI), Vanguard FTSE All-World ex-US ETF (VEU), iShares Barclays 7-10 Treasury (IEF), Vanguard REIT Index ETF (VNQ), and Invesco DB Commodity Index Tracking (DBC) — up from last month's quadruple "invested" signal.
Howard Marks doesn’t make bets on economic predictions. That’s especially true now when the biggest wildcard is inflation – a phenomenon no one fully understands. But just because something is unknowable doesn’t mean it’s unimportant. That’s why Howard has devoted his latest memo to a topic he largely disavows: macro forecasting.
As expected, in a unanimous vote, the Federal Open Market Committee (FOMC) of the Federal Reserve (Fed) kept the fed funds rate unchanged in its range of 0-0.25%.
Equities continued to rally in the second quarter, but the market remains undecided about whether the recent uptick in inflation is more likely to be transitory or persistent.
The July Final came in at 81.2, down 4.3 (5.0%) from the June Final. Investing.com had forecast 80.8. Since its beginning in 1978, consumer sentiment is 5.7 percent below the average reading (arithmetic mean) and 4.7 percent below the geometric mean.
This morning's release of the publicly available data from ECRI puts the WLI at 153.9, down 0.8 from the previous week's revised figure. The WLIg is at 11.1, also down from last week and the WLI YoY is at 16.54%, down from last week.
The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, jumped to 73.4 in July from 66.1 in June, which is in expansion territory. Values above 50.0 indicate expanding manufacturing activity.
A consensus is emerging around an idea Americans used to scorn: That government cash payments are a good way to help struggling citizens and give the economy a boost.
With the release of this morning's report on June'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 -0.04% month-over-month change in disposable income is cut to -0.55% when we adjust for inflation. This is an increase from last month's -2.74% nominal and -3.33% real decreases. The year-over-year metrics are 0.46% nominal and -3.41% real.
Personal Income (excluding Transfer Receipts) in June rose 0.7% and is up 8.8% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, Real Personal Income (excluding Transfer Receipts) MoM was up 0.16%. The real number is up 4.7% year-over-year. Revisions were made.
The BEA's Personal Income and Outlays report for June was published this morning by the Bureau of Economic Analysis. The latest Headline PCE price index was up 0.51% month-over-month (MoM) and is up 3.99% year-over-year (YoY). Core PCE is now at 3.54%, above the Fed's 2% target rate. Revisions were made.
What is the degree of Emerging Markets (EM) stocks’ undervaluation relative to United States (US) equities?
The Advance Estimate for Q2 GDP came in at 6.5% (6.50% to two decimals), up from 6.3% (6.28% to two decimals) in Q1 2021. With a per-capita adjustment, the headline number is lower at 6.25% to two decimal points.
Today the National Association of Realtors released the June data for their Pending Home Sales Index. According to the National Association of Realtors®, "Pending home sales declined marginally in June after recording a notable gain in May."
Despite a strengthening economy in the second quarter, investors were highly focused on the Federal Reserve’s response to the recent spike in inflation data.
It's the question that parents around the world know all too well, "Are we there yet?" That was the key question coming into today's Fed meetings. The answer? Not yet, but we're getting closer.
The industry is now seeing an expansion in data-driven practices, with new ESG and climate datasets emerging and becoming mainstream.
The Fed stopped short of providing “advance notice,” but a December tapering announcement remains likely.
The best growth of the expansion is likely behind the U.S. just as the world’s largest economy reclaims its pre-pandemic level of output.
The Advance Estimate for Q2 GDP, to one decimal, came in at 6.5% (6.50% to two decimal places), an increase from 6.3% (6.28% to two decimal places) for the Q1 Third Estimate. Investing.com had a consensus of 8.5%.
This morning's seasonally adjusted 400K new claims, down 24K from the previous week's revised figure, was worse than the Investing.com forecast of 380K.
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.
Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia. The latest average of the five for July is 30, up from the previous month.
he current inflationary surge is temporary. When flexible prices, especially some of those mentioned, normalize, inflation is likely to follow suit.
Global EM equities portfolio manager Ashish Chugh shares why he thinks EM inflation and rates fears may be overblown.
It’s everywhere. At the White House. In consumer data. On earnings calls: Anxiety that inflation is about to gut the economy. Two places it isn’t are the stock and bond markets, where investors have taken Jerome Powell’s “transitory” mantra to heart.
Fireblocks has raised $310 million in a series D round that values the digital-asset platform at $2 billion, sealing its status as a unicorn.
Everyone was eager to put 2020 behind us, yet the Covid hangover lingers.
The great philosopher, John Locke, brilliantly captured the way the world works.
The headline number of 129.1 was an increase of 0.2 from the final reading of 128.9 for June. This was above the Investing.com consensus of 123.9.
Hang on to your hat.
The real yield on 10-year Treasuries fell to a record low as concerns mounted over the outlook for economic growth even as investor flows fueled appetite for inflation-linked debt.
Our economic outlook remains constructive, though we recognize it’s still too soon to know whether the current bout of inflation is transitory. Given the potential for rate increases, particularly after the Fed’s comments in June, we continue to prefer non-investment grade bonds, as they have lower duration and higher yields.
With today's release of the May S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index saw a 1.8% increase month over month which is cut to 1.5% with inflation adjustment. The non-seasonally adjusted national index saw a 16.6% YoY increase.
The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for May. U.S. house prices were up 1.7 percent on a seasonally adjusted nominal basis from the previous month. Year-over-year the index is up 18% on a non-seasonally adjusted nominal basis. After adjusting for inflation and seasonality, the index is up 0.9% in May and up 11% year-over-year (seasonally adjusted).
In what shaped up to be a very impressive first half of the year for both the economy and stock market, stellar earnings growth has been a key ingredient.
Fifth District manufacturing activity showed continued growth in July, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite index rose to 27 from 26 in June and indicates expansion.
Over the last decade, the general trend has been consistent: The rate of homeownership has struggled. The Census Bureau has now released its latest quarterly report with data through Q2 2021.
Chief Economist Scott Brown discusses the latest market data.
Someone once said, "technology has never moved this fast, and at the same time, will never move this slow again."
A revival of the Obama-era Build America Bonds would raise funds with less taxes.
This morning the Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for July. The latest general business activity index came in at 27.3, down 3.8 from 31.1 in June. All figures are seasonally adjusted.
The debate over post-pandemic scheduling often centers on productivity.
It’s now official that the recession of 2020 was the shortest in history.
This morning's release of the June New Home Sales from the Census Bureau came in at 676K, down 6.6% month-over-month from a revised 724K in May. The Investing.com forecast was for 800K. The median home price is now at $361.8K.
Looking back at my personal financial planning practice, there are some things I’ve done right and some mistakes I’ve made along the way.
Tweedy Browne is one of the most respected value managers in the world, with a legacy that includes having Benjamin Graham and Warren Buffett as clients. In this interview, members of its investment committee explain why value investing is on the cusp of a resurgence.
Recent protests offer hope that change may be right around the corner. But for now, gold and Bitcoin have helped fill the gap created by disastrously mismanaged currencies.
Let me be very clear. I believe the Federal Reserve has already made a significant policy error that can lead directly to recession. An accompanying fiscal policy error by the US Congress could compound the Fed’s error, although that remains to be seen, as it is not clear what will pass Congress.
The S&P 500 dropped upon open on Monday only to spend the rest of the week rising. The index ended the week at another record high, up four out of five days. It is up 1% from Thursday and up 17.5% YTD.
The Chicago Fed's National Activity Index, which we reported on this morning, is based on 85 economic indicators drawn from four broad categories of data:
We've updated our periodic look at the Philly Fed ADS Index which includes Initial Jobless Claims through 7/17, June Industrial Production, and June Employment.
Over the next 10 years, the global automotive industry is expected to face one of the most significant changes in its history – the replacement of internal combustion engine (ICE) vehicles with electric vehicles (EVs).
JPMorgan Chase & Co. is planning to more than double the advisers in its traditional broker business as the Wall Street giant plots an expansion in wealth management amid intensifying competition for rich clients.
Two months. That’s how long the pandemic-triggered recession lasted, from February to April 2020, making it the shortest economic downturn in U.S. history, according to the National Bureau of Economic Research’s (NBER) Business Cycle Dating Committee.
What exactly is “transitory?”
The latest Conference Board Leading Economic Index (LEI) for June was up 0.7% from the May final figure of 114.3 and at another record high.
This morning's release of the June Existing-Home Sales showed that sales rose to a seasonally adjusted annual rate of 5.86 million units from the previous month's 5.78 million. The Investing.com consensus was for 5.9 million. The latest number represents a 1.4% increase from the previous month and a 24% increase YoY.
Prices continue to climb, with the US CPI rising in June by the most since 2008.
The Chicago Fed National Activity Index (CFNAI) decreased to +0.09 in June from +0.26 in May. Three of the four broad categories of indicators used to construct the index made positive contributions in June, but two categories deteriorated from May. The index’s three-month moving average, CFNAI-MA3, declined to +0.06 in June from +0.80 in May.
The latest index came in at 30, up 3 from last month's 27, indicating expansion in July. The future outlook decreased to 33 his month from 37. Here is a snapshot of the complete Kansas City Fed Manufacturing Survey.
Monetary policy is not expansionary despite widespread belief otherwise.
As a woman who has worked in the financial services industry for 23 years, I’m keenly aware of the central role we play in money decisions.
US inflation as measured by the Consumer Price Index and others continues to surge at rates we haven’t seen in decades.
Long-term Treasury rates tumbled to the lowest levels in months on Monday as the spread of the delta coronavirus variant called into question optimistic assumptions about economic recovery, also touching off a global stock market slump.
Economic Insights
Taking Muni Bonds to the Next Level: Where Cutting-Edge Tech and Fundamental Research Meet
There’s considerable uncertainty in today’s municipal market. Questions persist about the likelihood of rising interest rates, inflation that may not be transitory and the impact on municipalities once the benefits of fiscal stimulus fades. Active bond managers have many decisions to make and need to be nimble in a changing landscape. What’s next for municipal bonds, and how can trading and portfolio management technology help investors navigate this changing environment?
The Limits of Equities as an Inflation Hedge
If you review the investment research articles and notes published during the 1970s and early 1980s, what you pick up is that during periods of high inflation, equity markets failed to live up to expectations.
P/E10: July 2020 Update
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.
Treasury Yields: A Long-Term Perspective
As of July 30, the 10-year note was 72 basis points above its historic closing low of 0.52%, reached on August 4, 2020
Biden's Neo-Populist Economic Doctrine
Within the space of just half a year, US President Joe Biden has completed a necessary economic-policy regime shift that started chaotically under his predecessor.
Rick Bookstaber on the Risk of a Leverage Liquidity Cascade
Rick Bookstaber warns that investors face the risk of a “leverage liquidity cascade,” where margin calls would trigger forced selling across asset classes.
Is China’s Bear Market an Opportunity?
China’s stock market pullback this year has been in line with the average annual drawdown; historically, this volatility has tended to produce double-digit annualized gains.
Weekly Gasoline Prices: WTIC Up 50% Since Early Jan
As of August 2, the price of Regular and Premium was up two and three cents, respectively, from the previous week. According to GasBuddy.com, California has the highest average price for Regular at $4.37 and Mississippi has the cheapest at $2.77. The WTIC end-of-day spot price closed at 71.26, down 0.9% from last week and up 50% from the beginning of the year.
Income Strategy Update: Investing Amid Inflation Concerns and Lower Yields
With global growth rebounding amid uncertainties over inflation and COVID-19 variants, investors may want to consider a somewhat more cautious and flexible approach when seeking a consistent yield.
A Perspective on Secular Bull and Bear Markets
Was the March 2009 low the end of a secular bear market and the beginning of a secular bull?
Hanging by a ZIRP Thread
The stock market and economy are hanging by a thread over an economic abyss. That thread is zero interest rate policy (ZIRP).
The Seeds of Stagflation
Last week, the government reported real GDP in the US grew at a 6.5% annual rate in the second quarter and was up 6.4% at an annual rate in the first half of 2021.
Crestmont Market Valuation Update: July 2021
Quick take: Based on the July S&P 500 average of daily closes, the Crestmont P/E is 188% above its arithmetic mean and at the 100th percentile of this fourteen-plus-decade monthly metric.
Technically Speaking: The Markets Next "Minsky Moment"
In this past weekend’s newsletter, I discussed the issue of the markets next “Minsky Moment.”
Auto Inventories: Pass the Chips
The automotive market is running lean.
Lunar Tides, The VIX® and Volatility
Financial advisors and investors demand novelty as the cost of attention. Given near-term outlooks on stock market volatility, a genuinely original analogy is Moon : tides : : VIX : volatility.
The Bold Return to In-Person Conferences
Last week witnessed a bold adventure in in-person conferencing… and lessons in how to manage clients (and their portfolios) in an unprecedented market environment. But the memorable moment at the ENGAGE conference was David Kelly’s statement that bitcoin is a cult and not a currency.
July ISM Manufacturing Index: Demand Expanded, Consumption Improved
This morning the Institute for Supply Management published its monthly Manufacturing Report for July. The latest headline Purchasing Managers Index (PMI) was 59.5, a decrease of 1.1 from 60.6 the previous month and in expansion territory. Today's headline number was below the Investing.com forecast of 60.9 percent.
July Markit Manufacturing: Record High, Also Record Supply Delays and Price Pressures
The July US Manufacturing Purchasing Managers' Index conducted by Markit came in at 63.4, up from the final June figure and a record high. Markit's Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.
A Strong 1H21, Moderation Seen in 2H21
Chief Economist Scott Brown discusses current economic conditions.
Is Your Target-Date Fund Providing Enough Inflation Protection?
Inflation has been on the rise recently, raising concerns about long-run inflation and its impact on the spending power of those who can least afford it—investors approaching or already in retirement.
How Advisors Can Maximize After-Tax Returns
Frank Pape is the senior director, portfolio consulting for Russell Investments’ advisor and intermediary solutions business. In this interview, he discusses the latest research on how advisors can maximize the after-tax income for their clients.
The Metaverse: What Every Early-Stage Investor Needs to Know
You may not be familiar with the term metaverse, but if you’ve been a consumer of popular books, movies and video games over the past 30 years or so, you probably are aware of the concept.
Policy Errors Have Consequences
I am worried the Fed will either let inflation become psychologically entrenched, or wait too long to stop it and spark crisis with a too-hasty response, but there are other possibilities. None are especially good.
End of the Recovery and Reflation Trade?
The yield curve is a powerful indicator. More powerful than many others as May West reminds us. As the greatest reopening momentum now appears behind us, today, our All-Weather portfolio looks more all-weather than it did earlier in the year.
Moving Averages: S&P Up 2.3% in July
Valid until the market close on August 31, 2021.
The S&P 500 closed July with a monthly gain of 2.27% after a gain of 2.22% in June. At this point, after close on the last day of the month, all five S&P 500 strategies are signaling "invested" — Vanguard Total Stock Market ETF (VTI), Vanguard FTSE All-World ex-US ETF (VEU), iShares Barclays 7-10 Treasury (IEF), Vanguard REIT Index ETF (VNQ), and Invesco DB Commodity Index Tracking (DBC) — up from last month's quadruple "invested" signal.
Thinking About Macro
Howard Marks doesn’t make bets on economic predictions. That’s especially true now when the biggest wildcard is inflation – a phenomenon no one fully understands. But just because something is unknowable doesn’t mean it’s unimportant. That’s why Howard has devoted his latest memo to a topic he largely disavows: macro forecasting.
Work in Progress: Fed Stands Pat
As expected, in a unanimous vote, the Federal Open Market Committee (FOMC) of the Federal Reserve (Fed) kept the fed funds rate unchanged in its range of 0-0.25%.
A Market in Flux Equity Investment Outlook Third Quarter
Equities continued to rally in the second quarter, but the market remains undecided about whether the recent uptick in inflation is more likely to be transitory or persistent.
Michigan Consumer Sentiment Final Down 5% From June
The July Final came in at 81.2, down 4.3 (5.0%) from the June Final. Investing.com had forecast 80.8. Since its beginning in 1978, consumer sentiment is 5.7 percent below the average reading (arithmetic mean) and 4.7 percent below the geometric mean.
ECRI Weekly Leading Index Update
This morning's release of the publicly available data from ECRI puts the WLI at 153.9, down 0.8 from the previous week's revised figure. The WLIg is at 11.1, also down from last week and the WLI YoY is at 16.54%, down from last week.
Chicago PMI Jumped in July
The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, jumped to 73.4 in July from 66.1 in June, which is in expansion territory. Values above 50.0 indicate expanding manufacturing activity.
Invest in Children and Equality: Hand Out Baby Bonds: Andrea Gabor
A consensus is emerging around an idea Americans used to scorn: That government cash payments are a good way to help struggling citizens and give the economy a boost.
Real Disposable Income Per Capita in June Down 0.6%, Revisions Made
With the release of this morning's report on June'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 -0.04% month-over-month change in disposable income is cut to -0.55% when we adjust for inflation. This is an increase from last month's -2.74% nominal and -3.33% real decreases. The year-over-year metrics are 0.46% nominal and -3.41% real.
The Big Four: Real Personal Income in June
Personal Income (excluding Transfer Receipts) in June rose 0.7% and is up 8.8% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, Real Personal Income (excluding Transfer Receipts) MoM was up 0.16%. The real number is up 4.7% year-over-year. Revisions were made.
PCE Price Index: June Core at 3.5% YoY
The BEA's Personal Income and Outlays report for June was published this morning by the Bureau of Economic Analysis. The latest Headline PCE price index was up 0.51% month-over-month (MoM) and is up 3.99% year-over-year (YoY). Core PCE is now at 3.54%, above the Fed's 2% target rate. Revisions were made.
Measuring EM Stocks’ Undervaluation
What is the degree of Emerging Markets (EM) stocks’ undervaluation relative to United States (US) equities?
Q1 Real GDP Per Capita: 6.3% Versus the 6.5% Headline Real GDP
The Advance Estimate for Q2 GDP came in at 6.5% (6.50% to two decimals), up from 6.3% (6.28% to two decimals) in Q1 2021. With a per-capita adjustment, the headline number is lower at 6.25% to two decimal points.
Pending Home Sales Down Marginally in June
Today the National Association of Realtors released the June data for their Pending Home Sales Index. According to the National Association of Realtors®, "Pending home sales declined marginally in June after recording a notable gain in May."
Transitory, or Not Transitory? That is the Question. Total Return Outlook Third Quarter
Despite a strengthening economy in the second quarter, investors were highly focused on the Federal Reserve’s response to the recent spike in inflation data.
Are We There Yet?
It's the question that parents around the world know all too well, "Are we there yet?" That was the key question coming into today's Fed meetings. The answer? Not yet, but we're getting closer.
Climate Change Risk Metrics: The Rising Tide
The industry is now seeing an expansion in data-driven practices, with new ESG and climate datasets emerging and becoming mainstream.
Substantial Further Progress? Not Yet, Says the Fed
The Fed stopped short of providing “advance notice,” but a December tapering announcement remains likely.
Peak Doesn’t Mean Weak as U.S. Economic Growth Set to Cool
The best growth of the expansion is likely behind the U.S. just as the world’s largest economy reclaims its pre-pandemic level of output.
Q2 GDP Advance Estimate: Real GDP Inches Up To 6.5%
The Advance Estimate for Q2 GDP, to one decimal, came in at 6.5% (6.50% to two decimal places), an increase from 6.3% (6.28% to two decimal places) for the Q1 Third Estimate. Investing.com had a consensus of 8.5%.
Weekly Unemployment Claims: Down 24K
This morning's seasonally adjusted 400K new claims, down 24K from the previous week's revised figure, was worse than the Investing.com forecast of 380K.
The "Real" Goods on the June Durable Goods Data
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.
July Regional Fed Manufacturing Overview
Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia. The latest average of the five for July is 30, up from the previous month.
Just How Transitory Is Inflation?
he current inflationary surge is temporary. When flexible prices, especially some of those mentioned, normalize, inflation is likely to follow suit.
Rethinking Current Macro-Driven Fears About EM Equities
Global EM equities portfolio manager Ashish Chugh shares why he thinks EM inflation and rates fears may be overblown.
Everyone Is Losing It Over Inflation. Except Financial Markets
It’s everywhere. At the White House. In consumer data. On earnings calls: Anxiety that inflation is about to gut the economy. Two places it isn’t are the stock and bond markets, where investors have taken Jerome Powell’s “transitory” mantra to heart.
BNY-Backed Crypto Platform Fireblocks Seals Unicorn Status
Fireblocks has raised $310 million in a series D round that values the digital-asset platform at $2 billion, sealing its status as a unicorn.
Inflation Or Not, The Bond Market Is No Safe Haven For Investors
Everyone was eager to put 2020 behind us, yet the Covid hangover lingers.
The Law of Fashion
The great philosopher, John Locke, brilliantly captured the way the world works.
Consumer Confidence Mostly Unchanged in July
The headline number of 129.1 was an increase of 0.2 from the final reading of 128.9 for June. This was above the Investing.com consensus of 123.9.
Brace (But Not Too Much) for the CPI Roller-Coaster
Hang on to your hat.
Real Yields Drop to Record Low, Investors Lap Up Inflation Debt
The real yield on 10-year Treasuries fell to a record low as concerns mounted over the outlook for economic growth even as investor flows fueled appetite for inflation-linked debt.
FAIT Accompli? Strategic Income Outlook Third Quarter
Our economic outlook remains constructive, though we recognize it’s still too soon to know whether the current bout of inflation is transitory. Given the potential for rate increases, particularly after the Fed’s comments in June, we continue to prefer non-investment grade bonds, as they have lower duration and higher yields.
May S&P/Case-Shiller Home Price Index: National Index up 16.6% YoY, Continues Record Highs
With today's release of the May S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index saw a 1.8% increase month over month which is cut to 1.5% with inflation adjustment. The non-seasonally adjusted national index saw a 16.6% YoY increase.
FHFA House Price Index: Up 1.7% in May, All Time High
The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for May. U.S. house prices were up 1.7 percent on a seasonally adjusted nominal basis from the previous month. Year-over-year the index is up 18% on a non-seasonally adjusted nominal basis. After adjusting for inflation and seasonality, the index is up 0.9% in May and up 11% year-over-year (seasonally adjusted).
One Step Closer … to Peak Earnings Growth?
In what shaped up to be a very impressive first half of the year for both the economy and stock market, stellar earnings growth has been a key ingredient.
Richmond Fed Manufacturing: Continued Strength in July
Fifth District manufacturing activity showed continued growth in July, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite index rose to 27 from 26 in June and indicates expansion.
Home Ownership Rate: 65.6% in Q2 2021
Over the last decade, the general trend has been consistent: The rate of homeownership has struggled. The Census Bureau has now released its latest quarterly report with data through Q2 2021.
Weekly Market Snapshot
Chief Economist Scott Brown discusses the latest market data.
Inflation, Shutdowns, Spending
Someone once said, "technology has never moved this fast, and at the same time, will never move this slow again."
A Better Way to Pay for Infrastructure Investments
A revival of the Obama-era Build America Bonds would raise funds with less taxes.
July Dallas Fed Manufacturing
This morning the Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for July. The latest general business activity index came in at 27.3, down 3.8 from 31.1 in June. All figures are seasonally adjusted.
Pushing for Productivity
The debate over post-pandemic scheduling often centers on productivity.
Shortest Recession In History Sets Up Next Recession
It’s now official that the recession of 2020 was the shortest in history.
New Home Sales Down 6.6% in June
This morning's release of the June New Home Sales from the Census Bureau came in at 676K, down 6.6% month-over-month from a revised 724K in May. The Investing.com forecast was for 800K. The median home price is now at $361.8K.
My Financial Planning Practice – Ten Things I Did Right and Wrong
Looking back at my personal financial planning practice, there are some things I’ve done right and some mistakes I’ve made along the way.
Tweedy Browne: We Are in the Early Stage of Value’s Resurgence
Tweedy Browne is one of the most respected value managers in the world, with a legacy that includes having Benjamin Graham and Warren Buffett as clients. In this interview, members of its investment committee explain why value investing is on the cusp of a resurgence.
Cuba and Venezuela Offer Cautionary Tales of Socialism
Recent protests offer hope that change may be right around the corner. But for now, gold and Bitcoin have helped fill the gap created by disastrously mismanaged currencies.
Federal Reserve Folly
Let me be very clear. I believe the Federal Reserve has already made a significant policy error that can lead directly to recession. An accompanying fiscal policy error by the US Congress could compound the Fed’s error, although that remains to be seen, as it is not clear what will pass Congress.
S&P 500 Snapshot: Soaring
The S&P 500 dropped upon open on Monday only to spend the rest of the week rising. The index ended the week at another record high, up four out of five days. It is up 1% from Thursday and up 17.5% YTD.
CFNAI Components: Employment, Production, Consumption, Sales
The Chicago Fed's National Activity Index, which we reported on this morning, is based on 85 economic indicators drawn from four broad categories of data:
The Philly Fed ADS Business Conditions Index Update
We've updated our periodic look at the Philly Fed ADS Index which includes Initial Jobless Claims through 7/17, June Industrial Production, and June Employment.
Three Disruptive Trends Set to Transform the Auto Industry
Over the next 10 years, the global automotive industry is expected to face one of the most significant changes in its history – the replacement of internal combustion engine (ICE) vehicles with electric vehicles (EVs).
JPMorgan to Double Advisers as Wall Street Vies for Wealthy
JPMorgan Chase & Co. is planning to more than double the advisers in its traditional broker business as the Wall Street giant plots an expansion in wealth management amid intensifying competition for rich clients.
Investors' Risk Appetite Is at an All-Time High. That Could Be a Problem
Two months. That’s how long the pandemic-triggered recession lasted, from February to April 2020, making it the shortest economic downturn in U.S. history, according to the National Bureau of Economic Research’s (NBER) Business Cycle Dating Committee.
How Transitory Is Transitory?
What exactly is “transitory?”
CB Leading Economic Index: Continued Rise in June
The latest Conference Board Leading Economic Index (LEI) for June was up 0.7% from the May final figure of 114.3 and at another record high.
Existing-Home Sales: Second Highest YoY Increase On Record
This morning's release of the June Existing-Home Sales showed that sales rose to a seasonally adjusted annual rate of 5.86 million units from the previous month's 5.78 million. The Investing.com consensus was for 5.9 million. The latest number represents a 1.4% increase from the previous month and a 24% increase YoY.
On My Mind: Just a Flesh Wound?
Prices continue to climb, with the US CPI rising in June by the most since 2008.
Chicago Fed: "Index suggests economic growth moderated in June"
The Chicago Fed National Activity Index (CFNAI) decreased to +0.09 in June from +0.26 in May. Three of the four broad categories of indicators used to construct the index made positive contributions in June, but two categories deteriorated from May. The index’s three-month moving average, CFNAI-MA3, declined to +0.06 in June from +0.80 in May.
Kansas City Fed Survey: Activity Strengthens in July
The latest index came in at 30, up 3 from last month's 27, indicating expansion in July. The future outlook decreased to 33 his month from 37. Here is a snapshot of the complete Kansas City Fed Manufacturing Survey.
Monetary Policy Is Not Expansionary
Monetary policy is not expansionary despite widespread belief otherwise.
The Wave Of Female Wealth Is Here: Why Your Practice Should Never Underestimate The Power Of A Woman
As a woman who has worked in the financial services industry for 23 years, I’m keenly aware of the central role we play in money decisions.
Spiking U.S. Inflation – Is It Really Temporary?
US inflation as measured by the Consumer Price Index and others continues to surge at rates we haven’t seen in decades.
Yield Plunge Stirs Thoughts of 1% Treasuries on Delta Variant
Long-term Treasury rates tumbled to the lowest levels in months on Monday as the spread of the delta coronavirus variant called into question optimistic assumptions about economic recovery, also touching off a global stock market slump.