Second Quarter GDP Reflects Early Pandemic Response
The U.S. economy contracted 9.5% through the second quarter, the worst single-quarter decline in gross domestic product (GDP) since the Commerce Department started tracking it in 1947. It was expected the report would show a dip, but it’s important to recognize what that dip represents.
Income Fund Update: Focused on Finding Opportunities in Today’s Markets
Looking across the global opportunity set, we see potential for attractive yield, though uncertainties surrounding the global recovery suggest this is a time to be cautious.
Market Cap to GDP: An Updated Look at the Buffett Valuation Indicator
With the Q2 GDP Advance Estimate, we now have an updated look at the popular "Buffett Indicator" -- the ratio of corporate equities to GDP. The current reading is 131.4%, up from 123.3% the previous quarter.
Weekly Gasoline Price Update: WTIC Down 1.4%
The price of Regular and Premium are unchanged from last week. According to GasBuddy.com, California has the highest average price for Regular at $3.17 and Mississippi has the cheapest at $1.82. The WTIC end of day spot price closed at 41.04, a decrease of 1.4% from last week.
CPI and PCE: Two Measures of Inflation and Fed Policy
The BEA's Core Personal Consumption Expenditures Chain-type Price Index for June, released Friday, shows that core inflation is below the Federal Reserve's 2% long-term target at 0.95%. The June Core Consumer Price Index release is higher at 1.19%. The Fed is on record as using Core PCE data as its primary inflation gauge.
Capturing the Ups and Downs in Coronavirus Equity Markets
Several equity factors diverged significantly from their typical performance patterns during the COVID-19 crisis. By understanding how factor returns behaved in this market correction relative to their historic norms, investors can not only prepare for future volatility but also take advantage of short-term market dislocations.
Markit Manufacturing: "U.S. manufacturing operating conditions improve..."
The July US Manufacturing Purchasing Managers' Index conducted by Markit came in at 50.9, up 1.1 from the 49.8 final June figure. Markit's Manufacturing PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.
Real Disposable Income Per Capita in June
With the release of this morning's report on June Personal Incomes and Outlays, we can now take a closer look at "Real" Disposable Personal Income Per Capita. At two decimal places, the nominal -1.46% month-over-month change in disposable income was at -1.82% when we adjust for inflation. This is an increase from last month's 5.15% nominal and 5.26% real decreases last month. The year-over-year metrics are 8.38% nominal and 7.58% real.
Weekly Investment Strategy
Between the biggest week of earnings, the Fed meeting, and key economic data, there were plenty of headlines ‘hot off the press’ for the financial markets to handle this week, and as we look ahead, some of these same developments, as well as a few others still have the potential to ‘turn up the heat’ on market volatility.