Despite these positive developments, many people continue to feel uneasy about the economy.
I have looked at market data on inflation expectations, Fed Funds futures, and other factors that influence interest rates. Today, I add an unorthodox factor to the list: cash cows.
The time has come! After the most aggressive tightening cycle in modern history, the Fed is ready to turn the page and begin dialing back its policy restraint after the second longest ‘on hold’ period (14 months) in history. Barring any surprises, the Fed should lower interest rates at its meeting next week—the first rate cut in over four years—in the hopes of preserving a soft landing for the economy.
BlackRock Inc. strategists turned underweight short-dated US Treasuries from overweight, saying the extent of Federal Reserve interest-rate cuts the market is betting on is unlikely to pan out.
The US Federal Reserve faces a crucial decision at its policy-making meeting this week: Ease off slightly on monetary restraint with a 25-basis-point interest-rate cut, or go for a rare 50-basis-point cut to fend off a recession.
As we move into the final stretch of 2024, many investors may be asking themselves: Is it time to give airline stocks another look? According to a new report from Bank of America (BofA), the answer might very well be yes
The S&P 500 finished the week ending September 13 up 4.02% from last Friday. The index is currently 0.73% off its record close from July 16th, 2024 and is now up 18.62% year-to-date.
States enter fiscal 2025 maintaining stable reserves and moderating fixed costs, yet we expect many will need to make modest spending cuts due to exhaustion of federal pandemic aid.
Due to balance sheet concerns, the higher-for-longer interest rate environment has been a significant headwind for the relative performance of U.S. small-cap equities.
“Fracking” is an expletive in environmental circles. Yet the spirit of shale is creeping into a business with transformational potential for the energy transition. Schlumberger NV, the industrial giant best known for sucking oil and gas from shale, the seabed (and other places besides), this week announced a breakthrough in direct lithium extraction, or DLE.
Japan's currency is enjoying an epic rally, heading for the biggest quarterly advance in years. That's quite a shift from a few months ago, when yen bulls were few and far between. Who can claim credit for this turnaround?
OpenAI Chief Executive Officer Sam Altman and Nvidia Corp. CEO Jensen Huang met with senior Biden administration officials and other industry leaders at the White House, where they discussed steps to address massive infrastructure needs for artificial intelligence projects.
Consumer sentiment rose to its highest reading since May 2024, according to the preliminary September report for the Michigan Consumer Sentiment Index. The index rose 1.1 points (1.6%) from August's final reading to 69.0. The latest reading was above the forecast of 68.3.
How are bull and bear markets defined and how should you approach them as an investor?
Earlier this year, the Federal Reserve seemed to have time on its side. Payrolls were growing at a healthy clip and the unemployment rate hovered near a five-decade low. Even though there were signs that inflation was licked, there didn’t appear to be much harm in keeping interest rates elevated for a while longer — just in case.
The Federal Reserve is likely to lower interest rates by a quarter-point next week and at each of the two meetings that follow, according to economists surveyed by Bloomberg News.
Investors are using their massive cash piles to lock in attractive yields in global bond markets, helping to limit losses in the asset class, according to Mohamed El-Erian.
While the pace of Federal Reserve cuts is in question, all roads lead to lower interest rates.
Balanced risks to inflation and employment indicate it’s time for the Fed to normalize interest rates, enhancing a positive backdrop for bonds.
As we approach the end of 2024, the latest Consumer Price Index (CPI) report from the Bureau of Labor Statistics (BLS) has provided us with critical insights into the health of the U.S. economy, particularly concerning inflation.
Passive fixed income index investing has evolved significantly over the previous decade, offering investors the flexibility to align risk requirements and investment goals. Learn more from our experts.
Recent Fed commentary and economic data have crystallized investor confidence in rate cuts coming in less than a week
Wholesale inflation increased more than expected last month. The producer price index for final demand increased 0.2% month-over-month (s.a.). On an annual basis, headline PPI decelerated from 2.1% in July to 1.7% in August.
Gold climbed to a record after another faster-than-forecast US inflation print and an uptick in applications for unemployment benefits substantiated bets that the Federal Reserve will cut interest rates next week.
All signs point to a tough few months ahead for investors charting the dollar’s path, after the US presidential debate and a key inflation reading left markets anticipating heightened volatility through year-end.
In some ways, central banking requires a trader’s instincts. Policymakers need to marry academic rigor with quick reflexes. There is a time for rumination and a time for action.
Fed officials must recalibrate their policy stance to ensure the economy stays on solid footing to achieve that elusive soft landing they have been aiming for after their quest to quash inflation.
Post-Jackson Hole and now post-jobs report, the markets can settle in for a rate cut at next week’s FOMC meeting.
What does the ratio of unemployment claims tell us about where we are in the business cycle and recession risk?
Multiple jobholders account for 5.1% of civilian employment. The survey captures data for four subcategories of the multi-job workforce, the relative sizes of which we've illustrated in a pie chart.
Let's take a close look at August's employment report numbers on Full and Part-Time Employment. The latest data shows that 82.5% of total employed workers are full-time (35+ hours) and 17.5% of total employed workers are part-time (<35 hours).
This series has been updated to include the August release of the consumer price index as the deflator and the monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $51,005, down 6.7% from over 50 years ago. After adjusting for inflation, hourly earnings are below their all-time high from April 2020.
Let's do some analysis of the Consumer Price Index, the best-known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U.
Inflation cooled for a fifth straight month in August, dropping to its lowest level since February 2021. According to the Bureau of Labor Statistics, the headline figure for the Consumer Price Index fell to 2.5% year-over-year, right in line with economist expectations. Additionally, core CPI cooled to 3.2% as expected.
Banks and shadow banks are meant to exist in separate worlds, but the financial links between them are increasingly seen as a source of potential instability. That’s a problem for banks because the business of forging those ties has lately been among the hottest activities on Wall Street.
Forecasters expect a monthly report on US consumer prices to show another month of muted increases, possibly playing into a Federal Reserve debate over how much to cut interest rates.
US Treasuries rallied ahead of a closely watched inflation reading that could cement bets on the size of the Federal Reserve’s interest-rate cut this month.
Investors may find themselves prognosticating about future rates relative to current rates in an attempt to optimize their portfolio.
The next U.S. president will face immediate fiscal challenges.
While technology is a powerful driver of economic growth, it also presents challenges that can negatively impact productivity, equality, mental health, and societal cohesion. Addressing these issues ensures that technological advancements promote sustainable and inclusive economic growth.
We learned a long time ago that we wanted to know what smart professional investors were doing. It’s always better to know who is smart rather than being smart yourself. Therefore, we’ve constantly kept track of insider buying, what great investors like Warren Buffett and Carlos Slim were doing, and what the most successful hedge funds were up to. A recent chart stopped us in our tracks.
In a recent interview, Timothy Crawmer, global credit strategist at Payden & Rygel ($156.8 billion AUM), says it is the firm’s view that the Federal Reserve is going to start the rate cutting efforts in September with a 25 by 25 basis points, likely followed by another two 25 basis point cuts in November and December.
The safest way to ensure retirement security is to match, on a year-by-year basis, future spending needs with a reliable stream of inflation-adjusted income and maturing fixed-income assets. As we’ve already seen, a conventional stock/bond portfolio may not cut that mustard.
Investors weighing election risks ahead of the first US presidential debate between Vice President Kamala Harris and former President Donald Trump are already a lot more jittery than they were before Trump and his onetime opponent, President Joe Biden, met onstage in June.
The next-generation processor was unveiled six months ago, but has faced engineering snags that delayed its release. While Chief Executive Officer Jensen Huang tried to reassure the market last month that revenue from the chip is coming soon, some investors were left wanting for details.
On the back of recent cooling in economic growth, an uptick in unemployment, and moderating inflation, the Federal Reserve (Fed) looks set to begin its rate-cutting cycle at its September meeting.
An analysis of the leadership reversal and market sell-off observed in recent weeks and why an emphasis on equities with consistent fundamentals is justified.
August’s employment report, which was weaker than markets were expecting but stronger than our call, cements our view that the easing cycle will begin during the next FOMC meeting, September 17-18.
Friday’s employment report suggests the US economy may be slowing down faster than most investors think
78 million baby boomers are about one-third of the voter-eligible population and 77 percent of them vote, so there are 60 million baby boomer votes. That 60 million is 38 percent of the 158 million votes cast in the 2020 presidential election. The baby boomer voters’ bloc is a big deal.
US Bitcoin exchange-traded funds have posted their longest run of daily net outflows since listing at the start of the year, part of a wider retreat from riskier assets in a challenging period for global markets.
Bond traders who struggled to predict how high the Federal Reserve would raise interest rates are finding the way down just as vexing.
Cloud computing has been one of the first industries to get a demonstrable boost from artificial intelligence. Oracle Corp.’s quarterly results on Monday are likely to extend that trend.
Stock buybacks have boomed in recent years. With corporate cash flows remaining high and potential rate cuts from the Fed, the trend appears set to continue.
Since the end of the “Yen Carry Trade” correction in August, bullish positioning has returned with a vengeance, yet two key risks face investors as September begins. While bullish positioning and optimism are ingredients for a rising market, there is more to this story.
We are entering a time I think will include a deep crisis. We are going to need each other. We really do need to “find our tribe.”
The U.S. economy may be heading into choppy waters, and investors might be wise to buckle up.
On the latest edition of Market Week in Review, Investment Strategist BeiChen Lin assessed the state of the economy, including the health of the services and manufacturing sectors, and the likelihood of a big rate cut at the upcoming Federal Reserve meeting.
The main focus for investors should is no longer if the Fed will cut rates in 2024, but how much and how quickly the Fed will lower interest rates.
Recent growth data have been muddled and subject to conflicting interpretations. There have been mixed signals from leading indicators and hard data and divergent readings across major economies.
Former Treasury Secretary Lawrence Summers said that while the August employment report wasn’t particularly poor, it did make predicting the size of the Federal Reserve’s likely interest-rate cut this month a tougher call.
Despite what you may have heard from the doomers, the US labor market is hardly falling apart at the seams. Layoffs are still extraordinarily low and a report Friday showed that the overall unemployment rate slipped to just 4.2%.
We think the decline in the S&P 500 Index on Tuesday may be more technical than fundamental.
The yield on the 10-year note ended September 6, 2024 at 3.72%, the 2-year note ended at 3.66%, and the 30-year at 4.03%.
Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. There is, however, a general belief that there are four big indicators that the committee weighs heavily in their cycle identification process.
There is a general belief that there are four big indicators that the NBER Business Cycle Dating Committee weighs heavily in their cycle identification process. This commentary focuses on one of those indicators, nonfarm employment. August saw a 142,000 increase in total nonfarm payrolls and the unemployment fell to 4.2%.
The latest employment report showed 142,000 jobs were added in August, falling short of the expected addition of 164,000 new jobs. Meanwhile, the unemployment rate ticked lower to 4.2%.
OPEC+ is like a teabag – it only works in hot water. The late Robert Mabro, one of the savviest oil-market observers, liked to say the cartel only got the job done when it was under prolonged financial pain. To judge by its latest actions, OPEC+ has yet to realize it’s inside a warming kettle.
US hiring fell short of forecasts in August after downward revisions to the prior two months, a development likely to fuel ongoing debate over how much the Federal Reserve should cut interest rates.
US Treasuries gained and traders ramped up their bets that the Federal Reserve will opt for a supersized interest-rate cut this month after a mixed report on the US labor market.
In a recent discussion with Adam Taggart via Thoughtful Money, we quickly touched on the similarities between the U.S. and Japanese monetary policies around the 11-minute mark. However, that discussion warrants a deeper dive. As we will review, Japan has much to tell us about the future of the U.S. economically.
Money can still be a factor in inflation.
With Labor Day now in the rearview mirror, the money and bond markets will no doubt become laser focused on the September FOMC meeting. Yes, Fed Chair Powell telegraphed that a rate cut is forthcoming, but he also emphasized how monetary policy is still data dependent.
Recent changes to the FAFSA form and process include a simpler form, fewer questions and a revised eligibility formula. Our Bill Cass highlights what you need to know to apply for federal financial aid for college.
The Institute of Supply Management (ISM) has released its August services purchasing managers' index (PMI). The headline composite index is at 51.5, slightly better than the forecast. The latest reading moves the index back into expansion territory for 48th time in the past 50 months.
The Federal Reserve is creating the potential for extreme bouts of volatility surrounded economic data releases.
The bold bet from the likes of Citigroup Inc. and JPMorgan Chase & Co. that the Federal Reserve will slash interest rates by a half-percentage-point this month faces its biggest test yet from Friday’s US jobs report.
Despite pullbacks and elevated volatility in the earlier days of the month, major equity indices were up in August.
A key segment of the US Treasury yield curve briefly turned positive as weaker-than-anticipated labor-market data bolstered bets on steep interest-rate cuts by the Federal Reserve.
Investors should be careful what they wish for in hoping for an aggressive Fed rate cutting cycle, given stocks tend to do better when cuts are slow and steady.
When we’re viewing markets, it’s not surprising sentiment shifts quickly if we don’t instantly see the anticipated results. Market pundits quickly point fingers and determine the Fed, economists, and participants are wrong. Reactions can be powerful in number and sway momentum for stocks and/or bonds.
After a decade of consistent outperformance, Japanese small caps began underperforming their large cap peers in 2018, a trend that has accelerated since 2023.
This week’s data reflects the resilience of the U.S. economy. Currently, the economy is holding steady with jobless claims in the 230,000 range and recent inflation data showing stability. Friday’s inflation report was essentially at expectations and indicates that the Federal Reserve (Fed) will make a rate cut of at least 25 basis points (bps) at the September meeting. Whether the cut is 25 or 50 will depend mostly on this week’s employment report.
The latest job openings and labor turnover summary (JOLTS) report showed that job openings slid in July, reflecting cooling hiring. Vacancies decreased to 7.673 million in July from June's downwardly revised level of 7.910 million. The latest reading was below the expected 8.090 million vacancies.
In this edition, Harold Evensky explores the challenges facing sustainable and active funds, the implications of the new DOL Fiduciary Rule, and the value of long-term performance projections. With candid observations and critical analysis--read on to gain perspective on navigating the complex world of investing, the importance of risk management, and the role of fiduciary advisors in securing your financial future.
Bond traders are bracing for wilder market swings in the US than in Europe, as signs the world’s largest economy is faltering fuel bets on a jumbo interest-rate cut from the Federal Reserve.
After a bruising few years, Asian currencies have suddenly become fashionable again. But this enthusiasm is dependent on words and deeds far away. The direction of global markets is driven overwhelmingly by the US. For now, that means interest-rate cuts by the Federal Reserve.
A soft landing for the U.S. economy still appears to be the most likely outcome.
With his Jackson Hole speech, Federal Reserve Chair Jerome Powell all but promised rate cuts were coming. That’s cool. But it is why that matters.
As more Chinese companies get comfortable paying dividends, investors may find new sources of equity return potential.
Economic Insights
Is Inflation Still a Threat? The Surprising Truth Behind the Numbers
Despite these positive developments, many people continue to feel uneasy about the economy.
Cash Cow Clues: Can Dividend Yields Forecast Interest Rates?
I have looked at market data on inflation expectations, Fed Funds futures, and other factors that influence interest rates. Today, I add an unorthodox factor to the list: cash cows.
Shifts in the Fed’s Dot Plot Should Set the Market’s Tone
The time has come! After the most aggressive tightening cycle in modern history, the Fed is ready to turn the page and begin dialing back its policy restraint after the second longest ‘on hold’ period (14 months) in history. Barring any surprises, the Fed should lower interest rates at its meeting next week—the first rate cut in over four years—in the hopes of preserving a soft landing for the economy.
BlackRock Warns on Bonds, Saying Fed Rate Bets Are Overdone
BlackRock Inc. strategists turned underweight short-dated US Treasuries from overweight, saying the extent of Federal Reserve interest-rate cuts the market is betting on is unlikely to pan out.
The Fed Should Go Big Now. I Think It Will.
The US Federal Reserve faces a crucial decision at its policy-making meeting this week: Ease off slightly on monetary restraint with a 25-basis-point interest-rate cut, or go for a rare 50-basis-point cut to fend off a recession.
It’s Time to Reconsider Airline Stocks. Here Are Four Reasons Why.
As we move into the final stretch of 2024, many investors may be asking themselves: Is it time to give airline stocks another look? According to a new report from Bank of America (BofA), the answer might very well be yes
S&P 500 Snapshot: Market Bounces Back
The S&P 500 finished the week ending September 13 up 4.02% from last Friday. The index is currently 0.73% off its record close from July 16th, 2024 and is now up 18.62% year-to-date.
Municipal Bonds: Fiscal 2025 State Outlook
States enter fiscal 2025 maintaining stable reserves and moderating fixed costs, yet we expect many will need to make modest spending cuts due to exhaustion of federal pandemic aid.
Positioning for a Small-Cap Market Rotation in Our Model Portfolios
Due to balance sheet concerns, the higher-for-longer interest rate environment has been a significant headwind for the relative performance of U.S. small-cap equities.
The Spirit of Fracking Comes to US Lithium Mining
“Fracking” is an expletive in environmental circles. Yet the spirit of shale is creeping into a business with transformational potential for the energy transition. Schlumberger NV, the industrial giant best known for sucking oil and gas from shale, the seabed (and other places besides), this week announced a breakthrough in direct lithium extraction, or DLE.
Epic Yen Rally Is a Lesson in the Lost Art of FX Intervention
Japan's currency is enjoying an epic rally, heading for the biggest quarterly advance in years. That's quite a shift from a few months ago, when yen bulls were few and far between. Who can claim credit for this turnaround?
OpenAI, Nvidia Executives Discuss AI Infrastructure Needs With Biden Officials
OpenAI Chief Executive Officer Sam Altman and Nvidia Corp. CEO Jensen Huang met with senior Biden administration officials and other industry leaders at the White House, where they discussed steps to address massive infrastructure needs for artificial intelligence projects.
Michigan Consumer Sentiment at Highest Reading Since May 2024
Consumer sentiment rose to its highest reading since May 2024, according to the preliminary September report for the Michigan Consumer Sentiment Index. The index rose 1.1 points (1.6%) from August's final reading to 69.0. The latest reading was above the forecast of 68.3.
Bull vs. Bear: Understanding Market Phases
How are bull and bear markets defined and how should you approach them as an investor?
The Fed Has No Choice But to Assume the Worst
Earlier this year, the Federal Reserve seemed to have time on its side. Payrolls were growing at a healthy clip and the unemployment rate hovered near a five-decade low. Even though there were signs that inflation was licked, there didn’t appear to be much harm in keeping interest rates elevated for a while longer — just in case.
Fed to Pursue Three Quarter-Point Cuts This Year, Economists Say
The Federal Reserve is likely to lower interest rates by a quarter-point next week and at each of the two meetings that follow, according to economists surveyed by Bloomberg News.
El-Erian Says Cash on Sidelines Is Minimizing Bond Market Losses
Investors are using their massive cash piles to lock in attractive yields in global bond markets, helping to limit losses in the asset class, according to Mohamed El-Erian.
Federal Reserve: On the Road Again
While the pace of Federal Reserve cuts is in question, all roads lead to lower interest rates.
Cuts and Consequences
Balanced risks to inflation and employment indicate it’s time for the Fed to normalize interest rates, enhancing a positive backdrop for bonds.
Latest CPI Numbers Signal Potential Problems for 2025
As we approach the end of 2024, the latest Consumer Price Index (CPI) report from the Bureau of Labor Statistics (BLS) has provided us with critical insights into the health of the U.S. economy, particularly concerning inflation.
Index Investing as an Active Decision: Implications for Fixed Income Investors
Passive fixed income index investing has evolved significantly over the previous decade, offering investors the flexibility to align risk requirements and investment goals. Learn more from our experts.
Positioning Ahead of the Fed: ETFs for a Lower Rate Era
Recent Fed commentary and economic data have crystallized investor confidence in rate cuts coming in less than a week
Producer Price Index: Wholesale Inflation Increases in August
Wholesale inflation increased more than expected last month. The producer price index for final demand increased 0.2% month-over-month (s.a.). On an annual basis, headline PPI decelerated from 2.1% in July to 1.7% in August.
Gold Climbs to a Record as US Data Bolster Fed Rate Cut Case
Gold climbed to a record after another faster-than-forecast US inflation print and an uptick in applications for unemployment benefits substantiated bets that the Federal Reserve will cut interest rates next week.
Where Money Managers See Dollar Going as Fed Cuts, US Votes
All signs point to a tough few months ahead for investors charting the dollar’s path, after the US presidential debate and a key inflation reading left markets anticipating heightened volatility through year-end.
Powell’s Inertia Leaves the Fed in a Bind After CPI Surprise
In some ways, central banking requires a trader’s instincts. Policymakers need to marry academic rigor with quick reflexes. There is a time for rumination and a time for action.
These Signs Suggest the Fed Needs to Get Going on Rate Cuts
Fed officials must recalibrate their policy stance to ensure the economy stays on solid footing to achieve that elusive soft landing they have been aiming for after their quest to quash inflation.
The Fed’s “Balancing” Act
Post-Jackson Hole and now post-jobs report, the markets can settle in for a rate cut at next week’s FOMC meeting.
Unemployment Claims as a Recession Indicator: August 2024
What does the ratio of unemployment claims tell us about where we are in the business cycle and recession risk?
Multiple Jobholders Account for 5.1% of All Employed
Multiple jobholders account for 5.1% of civilian employment. The survey captures data for four subcategories of the multi-job workforce, the relative sizes of which we've illustrated in a pie chart.
A Closer Look at Full-time and Part-time Employment
Let's take a close look at August's employment report numbers on Full and Part-Time Employment. The latest data shows that 82.5% of total employed workers are full-time (35+ hours) and 17.5% of total employed workers are part-time (<35 hours).
Middle Class Hourly Wages as of August 2024
This series has been updated to include the August release of the consumer price index as the deflator and the monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $51,005, down 6.7% from over 50 years ago. After adjusting for inflation, hourly earnings are below their all-time high from April 2020.
Inside the Consumer Price Index: August 2024
Let's do some analysis of the Consumer Price Index, the best-known measure of inflation. The Bureau of Labor Statistics (BLS) divides all expenditures into eight categories and assigns a relative size to each. The pie chart illustrates the components of the Consumer Price Index for Urban Consumers, the CPI-U.
Consumer Price Index: Inflation Cools to 2.5% in August
Inflation cooled for a fifth straight month in August, dropping to its lowest level since February 2021. According to the Bureau of Labor Statistics, the headline figure for the Consumer Price Index fell to 2.5% year-over-year, right in line with economist expectations. Additionally, core CPI cooled to 3.2% as expected.
Wall Street’s Hottest Business Is About to Cool
Banks and shadow banks are meant to exist in separate worlds, but the financial links between them are increasingly seen as a source of potential instability. That’s a problem for banks because the business of forging those ties has lately been among the hottest activities on Wall Street.
US CPI to Show Another Muted Rise as Fed Debates Rate-Cut Size
Forecasters expect a monthly report on US consumer prices to show another month of muted increases, possibly playing into a Federal Reserve debate over how much to cut interest rates.
US Two-Year Yield Falls to Lowest Since 2022 Ahead of CPI Report
US Treasuries rallied ahead of a closely watched inflation reading that could cement bets on the size of the Federal Reserve’s interest-rate cut this month.
Unparalleled Rate Movement
Investors may find themselves prognosticating about future rates relative to current rates in an attempt to optimize their portfolio.
Overture on Election Issues
The next U.S. president will face immediate fiscal challenges.
Technological Advances Make Things Better – Or Does It?
While technology is a powerful driver of economic growth, it also presents challenges that can negatively impact productivity, equality, mental health, and societal cohesion. Addressing these issues ensures that technological advancements promote sustainable and inclusive economic growth.
When Smart Money is Wrong
We learned a long time ago that we wanted to know what smart professional investors were doing. It’s always better to know who is smart rather than being smart yourself. Therefore, we’ve constantly kept track of insider buying, what great investors like Warren Buffett and Carlos Slim were doing, and what the most successful hedge funds were up to. A recent chart stopped us in our tracks.
Position Your Portfolio for a Soft Landing
In a recent interview, Timothy Crawmer, global credit strategist at Payden & Rygel ($156.8 billion AUM), says it is the firm’s view that the Federal Reserve is going to start the rate cutting efforts in September with a 25 by 25 basis points, likely followed by another two 25 basis point cuts in November and December.
Why Should You Care When Stocks Plunge?
The safest way to ensure retirement security is to match, on a year-by-year basis, future spending needs with a reliable stream of inflation-adjusted income and maturing fixed-income assets. As we’ve already seen, a conventional stock/bond portfolio may not cut that mustard.
The Stocks, Bonds and Currencies Investors Are Watching During the Trump-Harris Debate
Investors weighing election risks ahead of the first US presidential debate between Vice President Kamala Harris and former President Donald Trump are already a lot more jittery than they were before Trump and his onetime opponent, President Joe Biden, met onstage in June.
Nvidia’s Blackwell Chip Delay Is Center Stage Amid Stock Slump
The next-generation processor was unveiled six months ago, but has faced engineering snags that delayed its release. While Chief Executive Officer Jensen Huang tried to reassure the market last month that revenue from the chip is coming soon, some investors were left wanting for details.
Do AAA CLOs Still Make Sense in a Declining Rate Environment?
On the back of recent cooling in economic growth, an uptick in unemployment, and moderating inflation, the Federal Reserve (Fed) looks set to begin its rate-cutting cycle at its September meeting.
Emphasize Consistency to Navigate Volatility
An analysis of the leadership reversal and market sell-off observed in recent weeks and why an emphasis on equities with consistent fundamentals is justified.
Employment Weakness Cements Our View
August’s employment report, which was weaker than markets were expecting but stronger than our call, cements our view that the easing cycle will begin during the next FOMC meeting, September 17-18.
Slower Faster
Friday’s employment report suggests the US economy may be slowing down faster than most investors think
60 Million Baby Boomer Votes Sway the Presidential Election
78 million baby boomers are about one-third of the voter-eligible population and 77 percent of them vote, so there are 60 million baby boomer votes. That 60 million is 38 percent of the 158 million votes cast in the 2020 presidential election. The baby boomer voters’ bloc is a big deal.
US Bitcoin ETFs Bleed $1.2 Billion in Longest Run of Net Outflows
US Bitcoin exchange-traded funds have posted their longest run of daily net outflows since listing at the start of the year, part of a wider retreat from riskier assets in a challenging period for global markets.
The Bond Market Rally Rides on How Fast the Fed Cuts Rates
Bond traders who struggled to predict how high the Federal Reserve would raise interest rates are finding the way down just as vexing.
Oracle Cloud Growth Could Cement Wall Street’s Next AI Favorite
Cloud computing has been one of the first industries to get a demonstrable boost from artificial intelligence. Oracle Corp.’s quarterly results on Monday are likely to extend that trend.
With Rate Cuts Ahead, Stock Buybacks May Continue
Stock buybacks have boomed in recent years. With corporate cash flows remaining high and potential rate cuts from the Fed, the trend appears set to continue.
Risks Facing Bullish Investors As September Begins
Since the end of the “Yen Carry Trade” correction in August, bullish positioning has returned with a vengeance, yet two key risks face investors as September begins. While bullish positioning and optimism are ingredients for a rising market, there is more to this story.
The Time Has Come
We are entering a time I think will include a deep crisis. We are going to need each other. We really do need to “find our tribe.”
The Yield Curve Inversion Just Ended, but Economic Risks Remain
The U.S. economy may be heading into choppy waters, and investors might be wise to buckle up.
Health Check: How Is the U.S. Economy Holding Up?
On the latest edition of Market Week in Review, Investment Strategist BeiChen Lin assessed the state of the economy, including the health of the services and manufacturing sectors, and the likelihood of a big rate cut at the upcoming Federal Reserve meeting.
Fed Rate Cuts Coming in September: What’s Next?
The main focus for investors should is no longer if the Fed will cut rates in 2024, but how much and how quickly the Fed will lower interest rates.
Back to School: Macro Cliff Notes and a Look Ahead
Recent growth data have been muddled and subject to conflicting interpretations. There have been mixed signals from leading indicators and hard data and divergent readings across major economies.
Summers Says Jobs Weakness Makes It Closer Call on Fed Going 50
Former Treasury Secretary Lawrence Summers said that while the August employment report wasn’t particularly poor, it did make predicting the size of the Federal Reserve’s likely interest-rate cut this month a tougher call.
Big Fed Rate Cuts Are Needed for the Young and the Jobless
Despite what you may have heard from the doomers, the US labor market is hardly falling apart at the seams. Layoffs are still extraordinarily low and a report Friday showed that the overall unemployment rate slipped to just 4.2%.
Volatility Strikes in September: Our Thoughts
We think the decline in the S&P 500 Index on Tuesday may be more technical than fundamental.
Treasury Yields Snapshot: September 6, 2024
The yield on the 10-year note ended September 6, 2024 at 3.72%, the 2-year note ended at 3.66%, and the 30-year at 4.03%.
The Big Four Recession Indicators
Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. There is, however, a general belief that there are four big indicators that the committee weighs heavily in their cycle identification process.
The Big Four Recession Indicators: August Employment
There is a general belief that there are four big indicators that the NBER Business Cycle Dating Committee weighs heavily in their cycle identification process. This commentary focuses on one of those indicators, nonfarm employment. August saw a 142,000 increase in total nonfarm payrolls and the unemployment fell to 4.2%.
Employment Report: 142K Jobs Added in August, Less Than Expected
The latest employment report showed 142,000 jobs were added in August, falling short of the expected addition of 164,000 new jobs. Meanwhile, the unemployment rate ticked lower to 4.2%.
OPEC+ Kicks the Can Down a Very Uphill Road
OPEC+ is like a teabag – it only works in hot water. The late Robert Mabro, one of the savviest oil-market observers, liked to say the cartel only got the job done when it was under prolonged financial pain. To judge by its latest actions, OPEC+ has yet to realize it’s inside a warming kettle.
US Job Growth Comes Up Short in Possible Warning Sign for Fed
US hiring fell short of forecasts in August after downward revisions to the prior two months, a development likely to fuel ongoing debate over how much the Federal Reserve should cut interest rates.
Traders Add to Bets on Jumbo Fed Cuts as Data Fuels Bond Rally
US Treasuries gained and traders ramped up their bets that the Federal Reserve will opt for a supersized interest-rate cut this month after a mixed report on the US labor market.
Japanese Style Policies And The Future Of America
In a recent discussion with Adam Taggart via Thoughtful Money, we quickly touched on the similarities between the U.S. and Japanese monetary policies around the 11-minute mark. However, that discussion warrants a deeper dive. As we will review, Japan has much to tell us about the future of the U.S. economically.
Musings on the Money Supply
Money can still be a factor in inflation.
Inflation Now Taking a Back Seat
With Labor Day now in the rearview mirror, the money and bond markets will no doubt become laser focused on the September FOMC meeting. Yes, Fed Chair Powell telegraphed that a rate cut is forthcoming, but he also emphasized how monetary policy is still data dependent.
Navigating Financial Aid: New FAFSA Rules and Tips for Families
Recent changes to the FAFSA form and process include a simpler form, fewer questions and a revised eligibility formula. Our Bill Cass highlights what you need to know to apply for federal financial aid for college.
ISM Services PMI Expanded for Second Straight Month in August
The Institute of Supply Management (ISM) has released its August services purchasing managers' index (PMI). The headline composite index is at 51.5, slightly better than the forecast. The latest reading moves the index back into expansion territory for 48th time in the past 50 months.
Volatility Cocktail
The Federal Reserve is creating the potential for extreme bouts of volatility surrounded economic data releases.
Wall Street’s Big Bet on Jumbo Fed Cuts Hangs on US Jobs Report
The bold bet from the likes of Citigroup Inc. and JPMorgan Chase & Co. that the Federal Reserve will slash interest rates by a half-percentage-point this month faces its biggest test yet from Friday’s US jobs report.
Fed Rate Cuts Give Higher Probability of the Great Rotation Occurring
Despite pullbacks and elevated volatility in the earlier days of the month, major equity indices were up in August.
US Yield Curve Disinverts as Soft Labor Data Fuels Fed Cut Bets
A key segment of the US Treasury yield curve briefly turned positive as weaker-than-anticipated labor-market data bolstered bets on steep interest-rate cuts by the Federal Reserve.
It's Time … For a Fed Pivot
Investors should be careful what they wish for in hoping for an aggressive Fed rate cutting cycle, given stocks tend to do better when cuts are slow and steady.
A Slow Moving Economic Cycle
When we’re viewing markets, it’s not surprising sentiment shifts quickly if we don’t instantly see the anticipated results. Market pundits quickly point fingers and determine the Fed, economists, and participants are wrong. Reactions can be powerful in number and sway momentum for stocks and/or bonds.
Small Wonders: Overlooked Japan Small Caps Poised for Resurgence
After a decade of consistent outperformance, Japanese small caps began underperforming their large cap peers in 2018, a trend that has accelerated since 2023.
A Careful Recalibration Needed
This week’s data reflects the resilience of the U.S. economy. Currently, the economy is holding steady with jobless claims in the 230,000 range and recent inflation data showing stability. Friday’s inflation report was essentially at expectations and indicates that the Federal Reserve (Fed) will make a rate cut of at least 25 basis points (bps) at the September meeting. Whether the cut is 25 or 50 will depend mostly on this week’s employment report.
Job Openings Slid in July
The latest job openings and labor turnover summary (JOLTS) report showed that job openings slid in July, reflecting cooling hiring. Vacancies decreased to 7.673 million in July from June's downwardly revised level of 7.910 million. The latest reading was below the expected 8.090 million vacancies.
Navigating the Investment Landscape: Insights and Warnings
In this edition, Harold Evensky explores the challenges facing sustainable and active funds, the implications of the new DOL Fiduciary Rule, and the value of long-term performance projections. With candid observations and critical analysis--read on to gain perspective on navigating the complex world of investing, the importance of risk management, and the role of fiduciary advisors in securing your financial future.
Bond Volatility in US Eclipses Europe as Recession Angst Rises
Bond traders are bracing for wilder market swings in the US than in Europe, as signs the world’s largest economy is faltering fuel bets on a jumbo interest-rate cut from the Federal Reserve.
The Fed Is Containing Yuan Bears. That’s Ironic
After a bruising few years, Asian currencies have suddenly become fashionable again. But this enthusiasm is dependent on words and deeds far away. The direction of global markets is driven overwhelmingly by the US. For now, that means interest-rate cuts by the Federal Reserve.
August Sees Markets Close Strong After Tough Start
A soft landing for the U.S. economy still appears to be the most likely outcome.
Navigating Earnings Season: Tailwinds of Tomorrow
With his Jackson Hole speech, Federal Reserve Chair Jerome Powell all but promised rate cuts were coming. That’s cool. But it is why that matters.
Chinese Equities: How Investors Can Unlock the Power of Dividends
As more Chinese companies get comfortable paying dividends, investors may find new sources of equity return potential.