The Factor-Based Investing Channel

Path To Higher Yields In 2018 Unlikely To Be Straight Forward

Macro economic data is good. It seems likely that rates will be higher in a year and that suggests treasury yields will also be higher than they are now. But the path between here and higher yields is unlikely to be as straight-forward as is currently believed.

Synchronized Global Growth May Have Arrived

Nearly 10 years after the financial crisis brought the global economy to its knees, conditions have finally improved enough to crystallize my conviction that synchronized global growth is currently underway. Revenue and earnings growth are up year-over-year, not just in the U.S. but worldwide. Despite President Donald Trump threatening to raise tariffs and tear up trade deals, global trade is accelerating. World manufacturing activity expanded to a 78-month high of 53.5 in October, with faster rates recorded in new orders, exports, employment and input prices.

S&P 500 Snapshot: Down 0.13% from Last Week

The S&P 500 opened Friday below yesterday's close and oscillated around a small range throughout the day, closing with a daily loss of 0.26% and a weekly loss of 0.13%. Year-to-date, the index is up 15.19%.

Bonfire of the Absurdities

This week’s letter will take a look at the growing number of ridiculous, inane, and otherwise nonsensical absurdities that fill the daily economic headlines. I have gone from the occasional smile to scratching my head now and then to “WTF” moments several times a week.

Kansas City Fed Survey: Activity Slows in November

The latest index came in at 16, down from last month's 23, which indicates that activity slowed, but still expanded in November. The future outlook decreased to 27 from 32 last month. Here is a snapshot of the complete Kansas City Fed Manufacturing Survey.

ECRI Weekly Leading Index: WLI at 5.5% YoY

Today's release of the publicly available data from ECRI puts its Weekly Leading Index (WLI) at 145.6, down 0.1 from the previous week. Year-over-year the four-week moving average of the indicator is now at 5.52%, down from 5.53% last week. The WLI Growth indicator is now at 2.7, down from the previous week.

Firming U.S. CPI Supports Forecast for 2% Inflation in 2018

Core U.S. Consumer Price Index (CPI) inflation rose 0.22% month-over-month in October, broadly in line with expectations for firming price trends but notably stronger than the 0.14% average monthly pace this year.

Should I Pay Down My Debt?

One of the most common questions we hear from people who have suddenly acquired wealth is, “Should I pay down my debt?” In our view, you should only pay down debt if the costs exceed the benefits.

Solar Energy Boom Could Heat Up the Global Energy Sector

By 2040, the world will need to add the equivalent of India and China’s current energy system to meet the demands of a surging global population and rising incomes.

Structural Growth Drivers Behind Emerging-Market Economies

My colleagues and I have been championing the message that emerging markets have changed—they are no longer just commodity plays. Old economic models are undergoing a transformation in many cases, opening up exciting new investment opportunities.

Aflac: A Valuation Conundrum? Fairly Valued Dividend Aristocrats: Part 1 of 7

Aflac (AFL) is a Dividend Aristocrat that has increased its dividend for 35 consecutive years. However, it is only one of seven Dividend Aristocrats that I consider attractively valued in light of the current bull market. Therefore, this will be the first in a series of seven articles where I will cover these seven attractively valued Dividend Aristocrats.

Five Decades of Middle-Class Wages: October 2017 Update

We've updated this series to include yesterday's release of the Consumer Price Index as the deflator and the October monthly update. The latest hypothetical real (inflation-adjusted) annual earnings are at $37,441, down 12.8% from 44 years ago.

The Big Four Economic Indicators: Industrial Production Up 0.9% in October

Today's report on Industrial Production for October shows a 0.9% increase month-over-month, which was better than the consensus of 0.5%. Industrial Production peaked in November 2014, only one point higher than its pre-recession peak in November 2007. The year-over-year change is 2.88 percent, up from last month's YoY increase.

Benefiting From Flexibility: Opportunities in Multi‑Sector Credit

As many traditional credit sectors begin to approach full valuations, credit investors may want to look in new directions for attractive returns with manageable downside risk. In diversified credit portfolios today, de-risking and building liquidity are important, but we also see attractive relative value opportunities in a couple of (sometimes overlooked) sectors.

Six Tips to Take DC Plans to the Next Level

Tax reform. Interest-rate hikes. Regulatory questions. Inflation. There’s always a reason to put off making changes to your company’s defined contribution (DC) plan. But some improvements will be good for your plan and participants no matter what happens.