The exodus of CEO support following President Trump’s response to Charlottesville shook the foundations, but the stock market outlook has remained constructive. Every administration has its share of difficulties early on, many self-inflicted, before settling down.
The July CPI data were a bit softer than anticipated, due partly to a drop in the price index for lodging away from home. Granted, if you exclude everything that went down, the CPI always looks higher, but the underlying trend is not far from the Fed’s earlier expectations (of a gradual move toward the 2% goal).
There’s a fair amount of noise in the monthly employment data, but July figures remained consistent with expectations of moderately strong growth in the near term. One glaring weakness remained.
Equity factors are increasingly used by investors to help guide their portfolio allocations. So it’s important to have a good grasp of what factors are and how they perform through an economic cycle, in order to invest effectively.
The advance GDP report for 2Q17 contained few surprises. Growth was largely in line with expectations, leaving growth for the first half of the year at a 1.9% annual rate. Recent reports suggest some loss of momentum for the consumer, but rising real wages ought to provide support.
It is stinking hot and steamy on the East Coast these days, as the proverbial “dog days of summer” set in. Historically, this was a time of year when things slowed down, people went on vacation, and it was generally too hot to move fast, but not this year.
Samuel Blodget was an early American merchant, amateur architect, and economist. He wrote Economica: A Statistical Manual for the United States, considered to be the first American book on economics.
Fed Chair Janet Yellen covered no new ground in her monetary policy testimony to Congress, but that didn’t stop financial market participants from trying. While the CPI report drew a closer focus, past inflation figures don’t tell us a lot about future inflation.
The June Employment Report was about as much as stock market participants could have hoped for. Nonfarm payrolls rose more than expected, helping to offset fears that the economy is weakening.
Keeping portfolio construction simple improves performance no matter what type of investment process you use. Our industry is in love with complexity, but complexity is costly to clients.