Surprising Jobs Report Suggests Economy Remains Strong
The economy and the stock markets got some really good news last Friday. The Labor Department reported that a surprising 312,000 new jobs were created in December. That was nearly twice the pre-report estimate of 176,000. And there was plenty of other good news in the jobs report...
What's Wrong With The Stock Markets?
The US economy is booming with GDP growth of 4.2% and 3.5% (annual rates) in the 2Q and 3Q. Consumer confidence has soared over the last decade to near the highest level ever recorded. Corporate profits have exploded this year, thanks in part to Trump’s tax cuts. The unemployment rate has plunged to the lowest in decades at 3.7%.
Why The Bears Are So Negative On The Economy
This year, I have maintained a consistent positive view on the US economy and equity markets, this despite the fact that economies and stock markets have faltered in much of the rest of the world. My view has essentially been that the US economy is strong enough to decouple from the global economy.
Fed Chairman Blinks: Fewer Rate Hikes Possible
In a speech last Wednesday, Fed Chairman Jerome Powell surprised the world with a reversal of his hawkish rhetoric regarding additional interest rate hikes. While another quarter-point rate hike is expected on December 19, most Fed-watchers now expect only one or two rate hikes in 2019. Stocks rallied strongly on the news.
Record Household Debt, Student Loan Delinquencies Spike
The total debt shouldered by American households hit another record high, rising to $13.5 trillion in the third quarter. It was the largest quarterly jump since 2016. Meanwhile, the percentage of student loans in delinquency unexpectedly jumped to 9.1% in the third quarter, the highest level since the end of the Great Recession.
Stock Markets Turn Much More Volatile & Weak
Stock prices around the world are in a tailspin which may get worse before it gets better. As of the end of last week, 11 out of 23 major global stock markets were down the requisite 20% or more from their highs to qualify as bear markets. This is very troubling.
US "Debt Held by the Public" vs. Total National Debt
Today’s discussion is one I write about every few years because millions of Americans don’t understand that they are being misled by the government and the media about the true size of our national debt.
Voter Turnout to Be Record High in Midterms – Implications
Voter turnout for the November 6 midterm elections is widely expected to be at or near a record high. Emotions are high on both sides of the political aisle for this election, and pollsters are predicting a huge turnout by Republicans, Democrats and Independents.
Stock Market Correction, Or New Bear Market Unfolding?
On Wednesday, October 3, the Dow Jones Industrial Average soared to yet another new all-time record high just above 26,950 but then retreated to close well below the record high that day. The Dow then traded sharply lower on the following Thursday and Friday, dragging equity markets around the world lower with it.
New NAFTA - Global Trade Breakthrough or Just So-So?
Trump administration negotiators reached a major agreement with Canada on trade over the last weekend of September. The breakthrough, which came on the heels of an earlier deal with Mexico, vindicates President Trump’s tough approach to reforming trade and will mark a fundamental turning point for American jobs and global power.
Congress Spends Big To Avoid Government Shutdown
Congress quietly passed a new bill expanding federal spending by an additional $854 billion last week before they left Washington. It hardly made any news at all. Sadly, that $854 billion only funds the government through early December.
Tariffs On China Mean Higher Prices For US Consumers
Not long after I started studying economics in graduate school in 1975, I concluded that government-imposed tariffs on imported goods are almost always a bad idea. Ditto for trade wars. In general, the government has no business influencing the prices US manufacturers and others pay for the goods they import from abroad.
Did "Mark-To-Market" Rules Cause The Financial Crisis?
Last Saturday, September 15, 2018, marked the 10th anniversary of the Lehman Brothers bankruptcy, which set off the worst US financial crisis since the Great Depression. It was the largest bankruptcy filing in US history, with Lehman holding over $600 billion in assets.
Fed: Don’t Prematurely End the Economic Boom
In light of last Friday’s better than expected jobs report for August, the odds are near 100% that the Fed will hike short-term interest rates by another 25 basis points at its next policy meeting near the end of this month.
The Middle Class is Exploding Around the World
If you listen to the media, you probably think the “middle class” is declining rapidly, not just here but around the world. It’s true, the middle class is declining in America, but not for the reasons the media would have us believe. It’s actually a good thing, and I’ll explain why as we go along today.
This Bull Market in Stocks is Longest in US History
The current bull market in US stocks began on March 9, 2009 and tomorrow it will become the longest bull market in America’s history. The S&P 500 Index has advanced over 320% since its low in 2009. And most forecasters believe the market has further to run.
Public Companies Disappearing - Investors Lose Opportunities
Most investors are not aware of this but the number of publicly-traded companies listed on US stock exchanges has plunged almost 50% since the peak in 1996. This phenomenon is not limited to the United States.
Republicans Outspend Democrats On Earmarks, Set Record
Republicans claim to be fiscal conservatives but they're governing like out-of-control swamp creatures. Not only has the federal budget gone up every year the Republicans have been in control, new data show they will outspend Democrats on so-called “earmarks” this year and will set a new record. It's time for a permanent ban on wasteful pork-barrel earmarks.
Many Americans Not Benefitting From Strong Economy
The US economy continues to gain momentum. More and more forecasters are predicting GDP growth of 4% or better for the second half of this year. Yet while the economy is strengthening, many Americans are not fully benefitting from the improvement. Today, we’ll take a look at some of the reasons why.
National Debt No Problem - We Owe It To Ourselves - WRONG!
Our national debt has swelled to a record $21.16 trillion as of this writing. That includes debt held by the public ($15.4 trillion) and intra-governmental debt ($5.7 trillion). At $21+ trillion, our national debt is well above 100% of our Gross Domestic Product of $19.97 trillion.
Social Security & Medicare Annual Reports: What You Need to Know
Once each year, the Trustees of the Social Security and Medicare trust funds are required to provide a detailed status report to Congress, including financial projections well into the future. The latest reports were provided to Congress last week. There was good news and bad news, as usual.
U.S. Moves Back To #1 In Global Competitiveness Ranking
A surprising new report from a respected independent research group in Switzerland concluded that the United States has regained its position as the #1 nation in its global competitiveness ranking. This accomplishment was not expected and has not been widely reported in the mainstream media – no surprise there.
US Birthrate At 30-Year Low, Fertility Rate At Record Low
The government reported earlier this month that the US birthrate fell to the lowest level since 1987 last year, despite an increase in the number of child-bearing age women in the population since then. The government also reported that the “fertility rate” – the number of births per 1,000 women – fell to the lowest level in almost a century in 2017.
Why Trade Deficits Are Not Necessarily a Bad Thing
Today, I want to disagree with a widely-held view by the mainstream media and President Trump that trade deficits are always a bad thing. I also want to disagree with the idea that trade deficits with the US mean that our trading partners are taking advantage of us.
US National Debt Spiraling Out of Control, New Record
The Treasury Department announced last week that the government borrowed a record $488 billion in the January-March quarter. The Treasury said that actual borrowing in the 1Q exceeded the old record of $483 billion set in the first quarter of 2010 – the period when the country was struggling to pull out of a deep recession and prop-up the financial system following the 2008 financial crisis.
On The Economy, Wages, Interest Rates & The Yield Curve
1. GDP Growth Slowed in 1Q, But Beat Expectations 2. US Businesses Raise Pay at Fastest Pace in 11 Years 3. Fed Meeting Today, Tomorrow – No Rate Hike Expected 4. What You Should Know About the Flattening Yield Curve 5. The Most Interesting Political Article I Read Recently
How Washington Will Spend Your Taxes in 2018
Today we’re going to look at how Washington spends our tax dollars. Specifically, we’ll look at a new report which shows how the federal government spends the income tax paid by the average family – and how they spend even more than what’s collected to create massive budget deficits year after year after year.
Why US Healthcare Costs Are Highest in the World
While the final figures are not out yet, it is widely estimated that Americans spent well over $3.5 trillion (17% of GDP) on healthcare last year, and that figure is estimated to rise to $5.7 trillion (20% of GDP) by 2026, if not sooner.
China & Japan Are Reducing US Dollar Holdings - Why?
We’ll touch on several bases today which should make for an interesting E-Letter. We start with the fact that China and Japan are reducing their holdings of US Treasury debt. As the two foreign countries holding the largest amount of our debt by far, should we be concerned? Maybe yes, maybe no.
Tariffs Hurt All Americans, Tax Cuts Gain Popularity
The White House announced late last week that President Trump will enact new protectionist tariffs of 25% on imported steel and 10% on aluminum. This move set off fears of a new trade war as foreign trading partners most affected by the new tariffs are expected to retaliate with new tariffs of their own that will hurt US industries.
Our Scary Return To Trillion-Dollar Budget Deficits
With Congress’ passage of an additional $368 billion in federal spending over the next two years on February 9, our government budget deficits could approach, and perhaps exceed, $1 trillion annually for the next several years. That’s very scary!
The Worst Week In A Decade For US Stocks
Last week’s carnage in the US stock markets was one of the worst meltdowns I have witnessed in my 40+ years in the investment business. Most US stock indexes plunged over 10% in value from Friday, February 2 to the lows on Friday, February 9 – complete with two days where the Dow Jones Industrial Average lost over 1,000 points in one session.
Savings Rate Lowest In A Decade, Credit Card Balances Soar
Over the last several months, I have written often about how the US economy has strengthened significantly since the disappointing 1Q of last year. This time last year, most forecasters felt the economy would do well to grow by 2% in 2017.
Stocks Definitely Overvalued - Government Shutdown Looms
I don’t make market predictions very often. Normally, I leave those decisions to the professional money managers we recommend at Halbert Wealth Management. However, some recent developments have made me very concerned that the US equity markets are at high risk for a serious downward correction just ahead.
Will Our Strong Economy Spike Inflation in 2018?
As you know, a lot of predictions are made this time of year – about the economy, the markets, interest rates, inflation, etc. Some forecasters are predicting that 2018 will finally be the year when inflation takes off and returns to higher levels. However, some of these same prognosticators have been saying the same thing for the last several years.
China Not To Overtake US Economy Until 2032
Our stable of investment strategies at HWM has never been more diversified than it is today. In the last few years, we have significantly expanded the scope of the investments we recommend, including several successful strategies that do not involve stocks or bonds.
The Economy: Holiday Spending Strongest in Years
There’s so much to talk about in this week before Christmas it’s hard to know where to start. The economy continues to gain momentum. Last week, the Atlanta Fed revised its GDPNow forecast from 2.9% to 3.2% for the 4Q.
Lots of Good News in the November Jobs Report
The Fed Open Market Committee (FOMC), which sets interest rate policy, is meeting today and tomorrow. It is widely expected that the FOMC will hike its Fed Funds rate by another quarter-point when it releases its policy statement. In fact, the only surprise will be if it doesn’t.
Thoughts on GOP Tax Cuts & China's Faltering Economy
I veer from our usual roster of topics this week to bring you an update on China and its prospects for continued hot economic growth, or lack thereof. China is the second largest economy on the planet, behind the US, and many (if not most) Americans believe that it won’t be too long before China overtakes the US as the largest economy in the world.
Household Debt Rises to New Record of $13 Trillion
A new report from the Federal Reserve Bank of New York last week found that US household debt hit another record high in the 3Q of almost $13 trillion. The largest increases came in student loans, auto debt and credit cards. I’ll share the details with you just below.
Can the US Economy Sustain 3% Growth? The Answer is Yes
The US economy just turned in its second consecutive quarter of 3% growth in Gross Domestic Product, to the surprise of most forecasters and the mainstream media. This despite the negative effects of two major hurricanes hitting the southern US late this summer.
Why We Need New Leadership at the Federal Reserve
President Trump is finalizing his decision on who will head-up the Federal Reserve when current Fed Chair Janet Yellen’s term is up in February. He also needs to appoint another person to fill the now vacant Fed Vice Chairman spot due to the resignation of Stanley Fischer earlier this month.
Trump Packing Federal Courts With Conservative Judges
While the mainstream media remains obsessed with President Trump’s tweets and other controversial statements, the Commander-in-Chief is quietly packing the federal courts with conservative, originalist judges who are not only very smart but also relatively young.
War With North Korea Could Spark New Bear Market
The United States is increasingly being provoked toward a war with North Korea by its seemingly insane young leader Kim Jong-un. Not only has Jong-un acquired nuclear bomb capabilities much faster than US intelligence sources had estimated for years, he has also recently developed intercontinental ballistic missiles (ICBMs) capable of reaching US soil.