In July, the Institute for Supply Management’s (ISM) Non-Manufacturing Index fell to an 11-month low of 53.9, 3.5 points below its June reading of 57.4. The index measures the non-manufacturing, services industries such as food services, education, real estate, health care and more.
Today I am at Camp Kotok in a remote area of Maine where connectivity (the electronic kind) is limited. Rather than try to write a regular letter, I decided to hand the keyboard over to you – or at least to a few readers like you. I went through the feedback to my last few letters and picked some comments to share and respond to. These are a small fraction of the feedback we received, so forgive me if I omitted your brilliant submission! And because I want to get to the Camp Kotok opening reception in a bit, this letter will be shorter than usual.
Spot gold finished July up more than 2 percent, its best month since February, when it returned 3.7 percent. The yellow metal responded to a struggling U.S. dollar, which has lost more than 10 percent so far this year relative to other currencies and is currently at a 15-month low.
After a dip in global real economic growth last year, when a collapse in oil prices crushed the energy sector and related industries, I see global real GDP growth climbing to about 3.4% this year, leveling off through 2018.
Our Summer Outlook comes a bit late this year as we were traveling in the weeks after July 4th. Our itinerary included the San Francisco area, the Washington DC area, Castle Rock and Colorado Springs.
Venezuela is sliding closer and closer toward the brink, and things look as if they’ll get worse, unfortunately, before they improve.
Today I will show you a simple indicator that has an excellent recession-forecasting record, according to research by the Federal Reserve itself. Though the Fed’s own wacky policies may have weakened this early-warning system’s reliability, an interpretive adjustment can restore its usefulness.
I’m in the process of writing another book, going into great depth regarding one of the most important things discussed in my book The Most Important Thing: cycles, their causes, and what to do about them. It will be out next year, but this memo will give you a preview regarding one of the most important cyclical phenomena.
The CFA Institute’s second quarter 2017 Financial Analysts Journal included a research article penned by Martijn Cremers, professor of finance at the University of Notre Dame, entitled “Active Share and the Three Pillars of Active Management: Skill, Conviction, and Opportunity.”
Here are some of my takeaways from this year’s weekend in Omaha.
Matt is a $1.5 million producer. He has a new Porsche 911, Maserati and a 5,000 square foot house overlooking a valley. He has two beautiful kids, a gorgeous wife and no debt. He has it made. Except for the happiness part.
At a conference in Chicago this week, following up on last week’s letter, Keep Dancing but with a Sharp Eye on the Tea Leaves, an advisor client asked me what my favorite “tea leaf” might be. When one of the greatest investors of our time, Ray Dalio, tells us to keep an eye on the exit door we should take note. But how? And when?
Today I want to discuss reports that global debt levels are at all-time highs, and what this means for your investment decisions going forward.
American equities have been a good place to invest during the current bull market, now in its eighth year. Since the November election, the S&P 500 Index has surged close to 16 percent.
“Kill the Umpire”, the fan cried to open the 1996 baseball season in Cincinnati, and 7 pitches later, the man behind the plate, John McSherry, was dead, all 320 pounds of him screaming for more oxygen to feed his struggling heart. He’d been killed by his poor health, by a billion molecules of sink-clogging cholesterol that fed on his coronary artery and sucked up his life’s blood like a vampire at midnight.
The Monroe Doctrine began as a United States policy of opposing European colonialism in 1823. It stated that further efforts by European nations to take control of any independent state in North or South America would be viewed as "the manifestation of an unfriendly disposition toward the United States."
Nearly one-fifth (19%) of Americans age 70 to 74 were still in the workforce as of the end of June, according to the latest jobs report from the Labor Department on July 7. Some are working because they are healthy and enjoy their work. Most, however, are still working because they haven’t saved nearly enough for retirement.
Some good data below so I won’t draw out this intro. Stay focused overseas. Keep an eye on earnings which will hopefully be better than the reception that the big banks received on Friday. (But don’t worry, the bank disappointments were interest margin and loan growth caused, not credit related.)
A growing number of Federal Open Market Committee officials have voiced concerns over decelerating inflation since the June FOMC meeting, and the latest inflation print likely did little to alleviate them.
Ray Dalio, chairman of Bridgewater Associates, wrote last week that the global economy is heading toward a new stage where markets won’t get the same level of support from the global monetary policy makers. “The directions of policy are reversing,” he noted.
A review of last month’s market-moving events across countries and asset classes.
To a large extent, the U.S. financial crisis was actually made by the Fed… It was ultra-low rates that fueled the search for higher yield that enabled creatively engineered mortgage products (CDOs, CDOs of CDOs, adjustable rate and no-doc mortgages and AAA-rated garbage).
Intensifying demand to have everything at one’s fingertips seems to be the driving force behind the innovation in technology, finance and even industrials.
While there are bright spots, without major reforms the economy will drift lower, toward stall speed. Any outside shock – and several may be in the offing – could push us into recession.
Performance in the bond market in the first half of 2017 was characterized by a lack of inflation, optimism about economic growth reflected in both equity markets and credit spreads and a seemingly insatiable demand for yield.
Intensifying demand to have everything at one’s fingertips seems to be the driving force behind the innovation in technology, finance and even industrials. Franklin Equity Group’s Matt Moberg, vice president and portfolio manager, Franklin DynaTech Fund, observes a general shift in the technology industry to address evolving consumer needs.
The second quarter of 2017 closely mirrored the first. Global markets continued positive returns for many strategic domestic and global equity investors.
Despite rising interest rates, income-oriented investors are continuing to find value in ETFs. Elsewhere in income-related news, U.S. investors brace for proposed tax cuts while across the globe the Chinese bond market is pushing for inclusion in the major indices.
I listened to Bob Farrell several times a week. Bob was the chief stock market analyst at Merrill Lynch. Do you remember those old “squawk boxes?” On my desk sat a small speaker box. It was the firm’s way of communicating to the thousands of brokers.
Valuations and regulations are among the trends that we’re watching in this industry.
I think that now is a good time to take another look at royalty companies. Here are the top six things I believe investors should know about this specialized sector.
In last week’s letter, John Mauldin had some harsh words for the Federal Reserve leaders whose hubris pushed us into our current monetary corner. Now, with no good choices left, all we can do is pick the least-bad one.
The first half of 2017 is shaping up to be unequivocally brutal for value-oriented rebalancing strategies. Wired to avoid pain, we humans know it’s very tempting to ask whether a model or philosophy is broken, especially the moment it dashes expectations.
Bob Rodriguez, FPA’s now-retired portfolio manager, earned many awards and distinctions during his 33-year career. In this interview, he talks about the role of the Fed in the price-setting mechanism. “When the markets finally do break, as they always have historically, ETFs and index funds will be destabilizing influences,” he says. Please visit FPA Advisors at booth 123 at Schwab IMPACT.
This week, I’d like to draw to a conclusion my series of notes from Mauldin’s 2017 Strategic Investment Conference. The topics ranged from geopolitical to global macro to specific investment ideas. One of my all-time favorite economists is David Rosenberg. Today I offer my high-level bullet point notes from his presentation.
Underfunded pension plans grab the headlines. But that’s not what drives prices in the municipal bond market, according to Tom Doe. It’s the interplay between supply and demand – and right now yields are depressed due to a shortage of high-quality bonds.
Although the British economy is showing signs of slowing down, the country has not contracted or imploded as many Brexit opponents had predicted. In fact, certain British sectors such as exports and manufacturing continue to expand.
Although we’re just five months into 2017, I’ve focused on the notion of building a foundation in the new year, as well as looking to the future. It’s with these concepts in mind that I’ve approached my 2017 reading list and come up with a selection of books that encompasses economic fundamentals, modern international economics, and the art of market forecasting.
The last two weeks of June are usually a good time to recharge the batteries and get away. Unfortunately, last week kept many of those out of the office attached to their smartphones and their boats tied up at the docks.
With soft housing data last week and higher interest rates expected, it is a good time to ask: Is the housing rally over?
Last week the Federal Reserve hiked the federal funds rate by ¼ of a percentage point for the fourth time since December 2015. The funds rate is still below the rate of inflation, which means the Fed is still a long way from becoming tight.
Running a strategically disciplined advisory business – or any business for that matter – is like writing a strong story with a tight plotline.
As I listened to a number of the presentations at last month’s Strategic Investment Conference, silver and gold kept coming up. As did the industrial metal, copper. Make new friends but keep the old… today’s On My Radar continues the sharing of my high level conference notes with you. I walked away with some actionable ideas. Gold and silver were high on the list. The new friend is copper.
After a decade of lagging relative returns, value equities delivered impressive performance in 2016, outperforming growth stocks by 10% in the US.
Another soft U.S. core Consumer Price Index (CPI) inflation report – the third in a row that has lagged expectations – could complicate the Fed’s intentions to raise rates one more time this year, as the central bank’s Summary of Economic Projections currently forecasts.
Despite some uncertainties, economic improvements in developed and emerging markets have supported a positive mood across both equity and fixed income this year.
Global equities have risen 5% in the past 3 months and nearly 20% in the past year, yet fund managers continue to hold significant amounts of cash, suggesting lingering doubts and fears.
Today, you’ll find my high level notes from Mark Yusko’s presentation at the Mauldin Economics 2017 Strategic Investment Conference.
