The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, dropped to 44.3 in January from 44.9 in December, marking the fifth straight month in contraction territory. Values above 50.0 indicate expanding manufacturing activity. This reading comes in below the Investing.com forecast of 45.0.
Capital Growth
Gold and Copper Look Well-Positioned in 2023
Retail demand for bars and coins in the U.S. and Europe hit a new annual record last year in response to stubbornly high inflation and the war in Ukraine. Western investors gobbled up 427 tons (approximately 15 million ounces), the most since 2011.
Treasury Snapshot: February 3, 2023
The yield on the 10-year note ended February 3, 2023 at 3.53%, the two-year note ended at 4.30%, and the 30-year at 3.63%.
S&P 500 Snapshot: Ends Week Up 1.62% Despite Friday Fall
The S&P 500 reached it's highest close year to date on Thursday and finished this week up 1.62% from last week, despite Friday's fall. The index is up 7.73% YTD and is 13.76% below its record close.
Back to the Drawing Board
Chief Economist Eugenio J. Alemán discusses current economic conditions.
A Perspective on Secular Bull and Bear Markets
The S&P 500 peaked in November of 2021 and 2022 was a bear market. Let's examine the past to broaden our understanding of the range of historical trends in market performance.
Contrarian Trade. Everyone Remains Bearish
From a contrarian investing view, everyone remains bearish despite a market that corrected all of last year.
S&P Global Services PMI: Solid Contraction in January
The January US services purchasing managers' index (PMI) conducted by S&P Global came in at 46.8 percent, up from the final December estimate of 44.7 and remains in contraction territory.
ISM Services Bounces Back in January
The Institute of Supply Management (ISM) has now released its January services purchasing managers' index (PMI). The headline composite index is at 55.2 percent and is up 5.6 from 49.6 last month. Today's number came in almost 5 percentage points above the Investing.com forecast of 50.4 percent.
A Walk Down Memory Lane
In 1965 I was studying for a degree in Engineering.
January Employment: 517K New Jobs, Crushes Forecast
This morning's employment report for January showed a 517K increase in total nonfarm payrolls, which far exceeded the Investing.com forecast of 185K jobs added. The unemployment rate ticked down to 3.4%.
Nasdaq Rally Gets a Reality Check as Megacaps Miss
Traders piling back into tech stocks just got a sobering signal that they might have gotten ahead of themselves.
Intel's Planned US Chip Plant Has Bankers Looking for Similar Deals
Brookfield Infrastructure Partners LP’s $15 billion commitment last year to help finance Intel Corp.’s giant new semiconductor complex in Arizona, the first deal of its kind, sent investors and bankers racing to find similar opportunities.
Market Cap to GDP: Buffett Valuation Indicator
With the Q4 GDP advance estimate and the January close data, we now have an updated look at the popular "Buffett indicator" -- the ratio of corporate equities to GDP. The current reading is 140.1%, down from 146.7% the previous quarter.
5 Dividend Growth Stocks Offering A Margin of Safety
During uncertain economic times – as we are experiencing currently – the ever-important principles of valuation and margin of safety become even more important.
The FOMC Won’t Blink
As expected and discussed in the January Macro Tides the December Consumer Price Index (CPI) dropped below 7.0% falling to 6.5% from 7.1% in November.
January 2022: Market Valuation, Inflation and Treasury Yields
Our monthly market valuation updates have long had the same conclusion: US stock indexes are significantly overvalued, which suggests cautious expectations for investment returns. On August 4, 2020, the 10-year Treasury yield hit its all-time low of 0.52%. As of January 31, 2023, it was at 3.52%
P/E10: January 2022 Update
Here is the latest update of a popular market valuation method using the most recent Standard & Poor's "as reported" earnings and earnings estimates, and the index monthly average of daily closes for the past month.
Meta Shares Soar as Zuckerberg Declares 'Year of Efficiency'
Meta Platforms Inc.’s shares soared more than 20%, on track for their biggest gain in 10 years, after Chief Executive Officer Mark Zuckerberg announced plans to make the social media giant leaner, more efficient and more decisive.
Don’t Call This a Flash Crash!
US market structure was back in the news recently with several stocks experiencing irregular price movements on the morning of January 24.
Treasury Yields: A Long-Term Perspective
As of January 31, 2023, the 10-year note was 300 basis points above its historic closing low of 0.52%, reached on August 4, 2020.
Regression to Trend: 115% Above Trend in January
Quick take: At the end of January the inflation-adjusted S&P 500 index price was 115% above its long-term trend, unchanged from the previous month.
About the only certainty in the stock market is that, over the long haul, over-performance turns into underperformance and vice versa. Is there a pattern to this movement? Let's apply some simple regression analysis to the question.
The Q Ratio and Market Valuation: January Update
The Q Ratio is the total price of the market divided by the replacement cost of all its companies. Note: This update includes January close data.
Beware of Wall Street's Groundhog Predictions
Punxsutawney Phil’s forecast is appreciated as a bit of inconsequential fun; nobody takes it too seriously. Unfortunately, that’s not the case on Wall Street.
Morgan Stanley Makes Historic ETF Comeback With Six New Funds
Three decades after helping give birth to the ETF industry, Morgan Stanley is officially back in the game in what could be a milestone moment for the investing world.
Blackstone's $69 Billion Real Estate Fund Hit Monthly Redemption Limit in January
Blackstone Inc.’s $69 billion real estate trust hit a monthly redemption limit in January, as the firm’s crown jewel continues to wrestle with a line of investors seeking to get money out.
Wall Street Shrugs Off 'Fed’s Tough Talk' to Cheer Smaller Hikes
Wall Street had widely expected that the Federal Reserve would ease up on its pace of rate hikes to battle inflation on Wednesday.
Wall Street Is Obsessed With ChatGPT. These Are the AI Stocks to Watch
A $480 billion chipmaker whose processors are used for complex computing tasks. A digital-media company seeking to mine nascent technologies for content.
The More Powell Spoke, the More Stock and Bond Markets Rallied
Behind closed doors, Federal Reserve policy makers worry rallying markets are impeding their efforts to control inflation. But every time Jerome Powell goes out in public he gives them more room to run.
What to Watch
The market has high hopes for the Fed, however, comparing this to the Fed’s own expectations, we see a very different narrative.
Where is the Recession?
Inflation appears to have peaked, led by improvements in core goods prices and rate-sensitive sectors like housing.
How "0DTE" Options Will Cause the Next Black Monday
A trading tool like portfolio insurance is poised to trigger a stunning display of market instability.
January S&P Global US Manufacturing PMI™: Declining Further
The January S&P Global US Manufacturing PMI™ came in at 46.9, up 0.7 from the final December figure, and marginally better than the Investing.com forecast of 46.8. However, this marks the third consecutive month in contraction territory. S&P Global US Manufacturing PMI™ is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.
Is the Bubble About to Burst?
I chose the topic for this month’s Absolute Return Letter during the Christmas break.
Traders See AI Tech Shaping Their Future, JPMorgan Finds
Traders are betting artificial intelligence and machine learning will have the biggest impact on financial markets in the coming years.
Wall Street's Feel-Good Start to 2023 Sets Up Perilous Fed Day
Once-hated world stocks, bonds laced with interest-rate risk and even deadbeat crypto coins have just closed out a big new-year rally.
Bitcoin Is About to Test the Adage 'Don't Fight the Fed'
This year’s 40% rally in Bitcoin is heading toward a potentially big test in the shape of the upcoming Federal Reserve policy decision.
Too Soon for Global Optimism
It is hard to reconcile the jubilant mood of many business leaders with the uncertainty caused by the war in Ukraine.
Moving Averages: S&P Closes Month Up 6.18%, Best January Finish Since 2019
Valid until the market close on February 28, 2023.
The S&P 500 closed January with a monthly gain of 6.18%, it's highest since 2019, after a loss of 5.9% in December. At this point, after close on the last day of the month, one of five S&P 500 strategies are signaling "cash" — Invesco DB Commodity Index Tracking (DBC) — down from from last month's quadruple "cash" signal.
Corporate Health Weakens as Pricing Power Falls Sharply
A plunge in pricing power was one of the most notable developments we found in our latest quarterly survey of our credit analysts, who follow more than two dozen industries.
US Budget Season Implications for the Muni Market
A slowdown in US economic activity this year is likely to impact most states, which could face budget deficits, according to Jennifer Johnston, Franklin Templeton Fixed Income’s Director of Municipal Bonds.
A Sharpe Rebuke
We are closing in on what we think may be the question of the decade. If a majority of stock market capitalization in the US is passive or indexed, does this cause problems for stock markets?
The Fiction of Safe Withdrawal Rates
RIAs will be more financially successful, will retain and attract more investment assets, and will produce superior financial results for their retiree clients when they embrace new thinking that begins with the acknowledgment that, in practice, the safe withdrawal rate is a fiction.
Consumer Confidence Declines in January
The headline number of 107.1 was a decrease of 1.9 from the upwardly revised final reading of 109.0 for December.
Chicago PMI Down in January, Worse Than Forecast
The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, dropped to 44.3 in January from 44.9 in December, marking the fifth straight month in contraction territory. Values above 50.0 indicate expanding manufacturing activity. This reading comes in below the Investing.com forecast of 45.0.
10 Macroeconomic Themes for 2023
Guggenheim Investments’ Macroeconomic and Investment Research Group identifies 10 macroeconomic trends likely to shape monetary policy and investment performance this year.
Foreigners Scoop Up China Shares With January Inflow at Record
Foreigners are returning to China’s stock market with a vengeance, snapping up more shares in January alone than they did for the whole of 2022.
November S&P/Case-Shiller Home Price Index Continues Decline
With this morning's release of the November S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index saw a 0.5% decrease month over month. The MoM is reduced to -1.2% after adjusting for inflation. The non-seasonally adjusted national index saw a 7.7% YoY increase.
4Q 2022 GMO Quarterly Letter
2022 was a painful year in financial markets with almost all traditional assets delivering significant losses.
World Markets Update: January 30, 2023
Seven of eight indexes on our world watch list posted gains through January 30, 2023. The top performer continues to be Hong Kong's Hang Seng with a YTD gain of 11.57%. France's CAC 40 is in second with a YTD gain of 9.40%, and Germany's DAXK remains in third with a YTD gain of 8.64%. Coming in last for the fourth straight week is India's BSE SENEX with a loss of 2.20% YTD.
Moving Averages Month-End Preview: Up 4.6% in January
Here is an advance preview of the monthly moving averages we track after the close of the last business day of the month.
Stocks Decreasing to Start the Busy Week
U.S. stocks declining, as the markets trim a strong start to 2023 ahead of this week's host of key economic and earnings data, as well as the Fed's monetary policy decision.
The Labor Market Is Still Historically Tight
With wage growth still strong and unemployment low, the labour market is still historically tight. For now.
Performance Persistence Matters
Are persistent outperformance and long-term alpha closely linked or is it possible to deliver alpha without being persistent?
The 10 Most Important Things I Tell Clients
Over the past couple of decades, I’ve told clients many very important things. Most of them are timeless, which is why I find myself saying the same things repeatedly. Here are the top 10, and I’ve saved my most important for last.
Historic Crash for Memory Chips Threatens to Wipe Out Earnings
The memory-chip sector, famous for its boom-and-bust cycles, had changed its ways.
A “Soft Landing” Scenario – Possibility Or Fed Myth?
Optimism is increasing on Wall Street, with investors hoping for a “soft landing” in the economy.
Why Have Equal-Weighted Portfolios Outperformed the Market?
Equal-weighted portfolios have long outperformed cap-weighted funds. Conventional wisdom is that was because of the small-cap factor, but new research shows more is at play.
Dollar's Decline Is a Rare Nasdaq Tailwind as Earnings Loom
While tech investors have plenty of issues to worry about as the sector heads into a key week for corporate earnings, one notable headwind from last year has eased in recent months: the dollar.
Bitcoin Barrels Toward Historic January as Crypto Market Jumps by $280 Billion
Bitcoin is set for its best January since 2013 on bets that monetary tightening and the crypto-sector crisis are both ebbing.
Fed's Wall Street Clash Sets Stage for Powell’s Hawkish Message
Jerome Powell and Wall Street are headed for another face-off this week as the Federal Reserve seeks to slow its inflation-fighting campaign without signaling a readiness to stop.
Stocks Are Poised to Hit New Lows This Year, Survey of Investors Shows
Investors have little confidence in US stocks even after this month’s surge, fearing weak corporate earnings could drag them back down.
Pending Home Sales Increased 2.5% in December, Ending Six-Month Slide
The National Association of Realtors released the December data for its pending home sales index. According to the National Association of Realtors®, "Pending home sales increased in December for the first time since May 2022 — following six consecutive months of declines."
Growth Pains
In stock investing there’s a management style called “growth at a reasonable price” or GARP. It seeks to achieve steadier results by avoiding both expensive growth stocks and beaten-down value stocks.
I Asked ChatGPT to Write About Airline Deregulation in the U.S. Here’s How It Went
Since its launch in November, ChatGPT has been a smash hit. To explore the benefits of airline deregulation in the U.S., we sought the help of the AI content generator.
BuzzFeed Shares Surge 120% on Plans to Embrace OpenAI
BuzzFeed Inc. shares surged by a record on news that the digital-media company plans to use OpenAI to bolster some of its content creation.
Investors Flock to European Stocks Leaving US Behind, BofA Says
Investors are chasing European stocks at the fastest pace in nearly a year, while US equity inflows remain muted amid concerns of a recession, according to Bank of America Corp.
Wall Street Rides Loan-Market Rally to Sell Risky Buyout Debt
Slowly but surely, investment bankers from New York to London are chipping away at the tens of billions of dollars in leveraged buyout debt that remains famously stuck on their balance sheets.
Stagflation! Is Now the time to buy Precious Metals
It is believed that during stagflation, investors tend to turn to gold as a safe haven asset as the economic and financial conditions are uncertain. Additionally, gold is seen as a hedge against inflation, as its value is not tied to any currency or government.
Weekly Market Guide
Review the latest portfolio strategy commentary from Mike Gibbs, managing director of Equity Portfolio and Technical Strategy.
Small Cap Pioneers Share Their Investing Principles
As Royce Investment Partners, the pioneers of small cap investing, celebrate their 50th anniversary, Chuck Royce and Chris Clark take a look at the past 50 years to provide a take on what they have learned and how it guides their views on what is yet to come for the asset class.
An Uncommon Approach to Implementing Multiple Niches
Here are six steps to implement multiple niches, bring in new clients, and accelerate their growth goals.
Charitable Giving, Looking Back and Forward
Donors were again very generous in their support of their favorite charities in 2022 despite inflation and poor performance across the financial markets.
The Secret to Making the Sale in 2023
In 2023, trust is only half of the equation, The other half is authority.
How Does Donating to Charity Reduce Taxes?
Here’s an article to help clients better understand the tax benefits of charitable contributions.
The Buck Stops Here
US dollar cycles are long.
GDP and Jobs Show the Stock Market Bears Are Still Early
There’s a price to be paid for being early in investing even if you get the broader story right, as US stock market bears are learning the hard way.
Funding Special Needs Clients with ABLE Accounts
Special needs trusts and ABLE accounts are the pillars of special needs funding. I have a professional here to discuss the differences between them and how each can be used to maximize financial resources. This includes protecting government benefits, understanding eligibility requirements, guidelines for use, and funding options. The discussion will explain how you can best support families to provide quality of life and a lifetime of care.
The “Pain Trade” Is Higher For Now
The “pain trade” is likely higher over the next few weeks.
We Asked ChatGPT to Make a Market-Beating ETF. Here’s What Happened
What happens when you ask the hottest AI tool in the world to design an ETF that can beat the US equity market? It tells you the same thing every frustrated stock manager does.
$1 Trillion Green Investment Matches Fossil Fuels for First Time
For the first time, the world invested as much money into replacing fossil fuels as it spent on producing oil, gas and coal, according to an analysis from BloombergNEF.
Big Oil Faces Headwinds After Record $199 Billion Profit Haul
Exxon Mobil Corp., Chevron Corp., Shell Plc, TotalEnergies SE and BP Plc reaped almost $200 billion collectively last year but fears of an economic slowdown, plunging natural gas prices, cost inflation and uncertainty over China’s re-opening are dimming the outlook for 2023.
Musk's Big Tesla Growth Target Is a Problem
It pays to parse the language of any company’s earnings report, but perhaps more so for Tesla Inc. You could say it’s in the corporate genes.
Popular 401(k) Funds Rebound After Tanking in 2022
Checking your 401(k) account balance is a little less painful these days.
Selecting the Best Dividend Growth Stocks for Total Return: Part 2
In part 1 of this two-part series on dividend growth stocks, I stressed the importance of having a plan.
The Perversion Afflicting Value Investors
Successful investment management can be Impaired by perverse incentives, which are what now plagues value funds.
Stocks Lack Direction in Choppy Trading
U.S. equities finished mixed in a lackluster trading session, as Q4 earnings season shifted into a higher gear today.
1099 Season – An Opportunity for Tax-Aware Advisors
2022 was a banner year, and not in a good way.
What Would an Early Biden Departure Mean for Markets?
Joe Biden entered the Oval Office with relatively low approval ratings.
Recession Fear Investing
A recession is two consecutive quarters of economic contraction.
Investing With a Flat Yield Curve
Drew O’Neil discusses fixed income market conditions and offers insight for bond investors.