As we move into a market recovery, many investors are wondering how to position fixed income in their portfolios. Recoveries can happen quickly and missing the first few months can detract meaningfully from returns.
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%.
This commentary has been updated to include this morning's release of non-farm employment. January saw a 517K increase in total non-farm payrolls. The unemployment rate ticked down to 3.4%. The Investing.com forecast was for 185K jobs gained.
At the conclusion of its inaugural policy meeting of 2023 today, the U.S. Federal Reserve (Fed) delivered a smaller, quarter-point rate hike, as widely expected by markets.
In 1965 I was studying for a degree in Engineering.
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%.
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.
During uncertain economic times – as we are experiencing currently – the ever-important principles of valuation and margin of safety become even more important.
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.
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%
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.
The Census Bureau has posted its advance report on durable goods new orders. This series dates from 1992 and is not adjusted for either population growth or inflation. Let's review durable goods data with two adjustments.
US market structure was back in the news recently with several stocks experiencing irregular price movements on the morning of January 24.
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.
The US Treasury held steady its quarterly sales of longer-term debt, matching widespread expectations among bond dealers, given the standoff in Washington over expanding the government’s borrowing authority.
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 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 had widely expected that the Federal Reserve would ease up on its pace of rate hikes to battle inflation on Wednesday.
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.
The Federal Reserve slowed its drive to rein in inflation and said further interest-rate hikes are in store as officials debate when to end their most aggressive tightening of credit in four decades.
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.
The BEA's Core Personal Consumption Expenditures Chain-type Price Index for December, released last Friday, shows that core inflation continues to be well above the Federal Reserve's 2% long-term target at 4.42%. The December core CPI release was higher, at 5.71%. The Fed is on record as using core PCE data as its primary inflation gauge.
The market has high hopes for the Fed, however, comparing this to the Fed’s own expectations, we see a very different narrative.
Inflation appears to have peaked, led by improvements in core goods prices and rate-sensitive sectors like housing.
As investors seek to pinpoint market expectations for Federal Reserve policy, it’s critical to consider not just rate projections and derivatives pricing, but the degree of uncertainty and distribution of outcomes.
I chose the topic for this month’s Absolute Return Letter during the Christmas break.
If you can’t be bothered to dedicate significant time or money to marketing, let me teach you a step-by-step way to get new clients in fewer than two hours a month.
Shaky property markets across much of the world pose another risk to the global economy as higher interest rates erode household finances and threaten to exacerbate falling prices.
Once-hated world stocks, bonds laced with interest-rate risk and even deadbeat crypto coins have just closed out a big new-year rally.
This year’s 40% rally in Bitcoin is heading toward a potentially big test in the shape of the upcoming Federal Reserve policy decision.
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.
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.
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.
Over the last decade, the general trend has been consistent: The rate of homeownership has struggled. The Census Bureau has now released its latest quarterly report with data through Q4 2022.
The headline number of 107.1 was a decrease of 1.9 from the upwardly revised final reading of 109.0 for December.
Guggenheim Investments’ Macroeconomic and Investment Research Group identifies 10 macroeconomic trends likely to shape monetary policy and investment performance this year.
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.
2022 was a painful year in financial markets with almost all traditional assets delivering significant losses.
After successful bets against the world’s major bond markets paid off in 2022, a BlueBay Asset Management fund is positioned for another debt selloff this year.
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.
Here is an advance preview of the monthly moving averages we track after the close of the last business day of the month.
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.
With wage growth still strong and unemployment low, the labour market is still historically tight. For now.
Are persistent outperformance and long-term alpha closely linked or is it possible to deliver alpha without being persistent?
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.
Personal income (excluding transfer receipts) in December rose 0.27% and is up 5.3% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, real personal income (excluding transfer receipts) MoM was up 0.21% and was up 0.3% year-over-year.
Optimism is increasing on Wall Street, with investors hoping for a “soft landing” in the economy.
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 is set for its best January since 2013 on bets that monetary tightening and the crypto-sector crisis are both ebbing.
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.
Investors have little confidence in US stocks even after this month’s surge, fearing weak corporate earnings could drag them back down.
With the release of Friday morning's report on December's personal incomes and outlays, we can now take a closer look at "real" disposable personal income per capita. At two decimal places, the nominal 0.22% month-over-month change in disposable income comes to 0.17% when we adjust for inflation. This is a decrease from last month's .28% nominal and 0.18% real change. The year-over-year metrics are 2.71% nominal and -2.20% real.
The BEA's Personal Income and Outlays report for December was published on Friday morning by the Bureau of Economic Analysis. The latest headline PCE price index was up 0.05% month-over-month (MoM) and is up 5.02% year-over-year (YoY). Core PCE (YoY) dropped to 4.42%, still well above the Fed's 2% target rate.
The January final report came in at 64.9, up 5.2 (8.7%) from the December final. Investing.com had forecast 64.6. Since its beginning in 1978, consumer sentiment is 24% below its average reading (arithmetic mean) and 23% below its geometric mean.
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."
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.
The Federal Reserve’s preferred inflation measures eased in December to the slowest annual paces in over a year while consumer spending fell, helping pave the way for policymakers to further scale back the pace of interest-rate hikes.
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.
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.
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.
The current debt ceiling debate in Congress is a great reminder that investors should always prepare for the unexpected and invest in companies that are durable enough to withstand a range of economic scenarios.
The accompanying chart is a way to visualize real GDP change since 2007 and uses stacked column chart to segment the four major components of GDP with a dashed line overlay to show the sum of the four, which is real GDP itself. Here is the latest overview from the Bureau of Labor Statistics.
Review the latest portfolio strategy commentary from Mike Gibbs, managing director of Equity Portfolio and Technical Strategy.
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.
The Chicago Fed's National Activity Index, which I reported on yesterday, is based on 85 economic indicators drawn from four broad categories of data:
Donors were again very generous in their support of their favorite charities in 2022 despite inflation and poor performance across the financial markets.
For Americans with a New Year’s resolution to trade in their gas furnace or water heater for climate-friendly heat pumps, a word of caution: Generous Inflation Reduction Act rebates for home electrification took effect on Jan. 1, but they won’t actually be available to homeowners until year’s end or 2024 at the earliest, according the US Department of Energy.
Here’s an article to help clients better understand the tax benefits of charitable contributions.
US dollar cycles are long.
The Biden administration is under pressure from Capitol Hill lawmakers and student debt advocates to develop contingency plans to cancel billions of dollars in student debt and to move forward quickly if the Supreme Court strikes down the administration’s initial executive action.
Tesla Inc. has secured a new $5 billion revolving credit facility, another sign that the company is nearing investment-grade status.
The US economy grew faster than forecast into the end of 2022, but there were signs of slowing underlying demand as the steepest interest-rate hikes in decades threaten growth this year.
We've updated our periodic look at the Philly Fed ADS Index which includes real GDP (Q4 2022 release) and initial jobless claims through 1/21.
Focusing on high quality and liquidity when taking risk in portfolios will be key in 2023, as pressure on monetary policy remains intense.
The “pain trade” is likely higher over the next few weeks.
Having oscillated between anticipating another 50-basis-point interest-rate increase by the Federal Reserve next week or a downshift to 25 basis points, traders have settled solidly on the latter, guided both by Fed officials’ comments and by media reports.
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.
The advance estimate for Q4 GDP, to one decimal, came in at 2.9% (2.89% to two decimal places), a decrease from 3.2% (3.24% to two decimal places) for the Q3 third estimate. Investing.com had a consensus of 2.6%.
In part 1 of this two-part series on dividend growth stocks, I stressed the importance of having a plan.
Investors are still recovering from the municipal market beatdown of 2022, but the current higher absolute yield levels provide an attractive “re-entry” point for municipal market investors.
Successful investment management can be Impaired by perverse incentives, which are what now plagues value funds.
Six Wall Street banks are being pressed by a group of shareholders to move faster on reducing their financing of fossil fuels to meet global climate goals.
If you believe in the Milton Friedman adage that inflation is always and everywhere a monetary phenomenon, then you should also believe that the Federal Reserve can stop increasing interest rates. Now.
When we think about generating income for our clients, for over 30 years we’ve thought the most efficient way to do this is to blend the two key risks of fixed income into one portfolio.
The Northern Trust Economics team shares its outlook for key markets in the month ahead.
Here are the three ways to get 2023 off to a great start so you can deliver even more massive value than ever before.
U.S. equities finished mixed in a lackluster trading session, as Q4 earnings season shifted into a higher gear today.
2022 was a banner year, and not in a good way.
COVID-19 has been a catalyst for change in many aspects of our lives, not least the migration to flexible working, which would have taken many more years without the pandemic’s brutal intervention.
Joe Biden entered the Oval Office with relatively low approval ratings.
Income
Anatomy of the Fixed Income Comeback
As we move into a market recovery, many investors are wondering how to position fixed income in their portfolios. Recoveries can happen quickly and missing the first few months can detract meaningfully from returns.
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%.
The Big Four Economic Indicators: January Employment
This commentary has been updated to include this morning's release of non-farm employment. January saw a 517K increase in total non-farm payrolls. The unemployment rate ticked down to 3.4%. The Investing.com forecast was for 185K jobs gained.
February Fed Meeting: Tough Talk for a Smaller Hike
At the conclusion of its inaugural policy meeting of 2023 today, the U.S. Federal Reserve (Fed) delivered a smaller, quarter-point rate hike, as widely expected by markets.
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%.
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.
The "Real" Goods on the December Durable Goods Data
The Census Bureau has posted its advance report on durable goods new orders. This series dates from 1992 and is not adjusted for either population growth or inflation. Let's review durable goods data with two adjustments.
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.
US Keeps Quarterly Debt Sales Steady Ahead of Debt-Limit Endgame
The US Treasury held steady its quarterly sales of longer-term debt, matching widespread expectations among bond dealers, given the standoff in Washington over expanding the government’s borrowing authority.
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.
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.
Fed Slows Rate Hikes, Signals Further Increases Are Coming
The Federal Reserve slowed its drive to rein in inflation and said further interest-rate hikes are in store as officials debate when to end their most aggressive tightening of credit in four decades.
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.
CPI and PCE: Two Measures of Inflation and Fed Policy
The BEA's Core Personal Consumption Expenditures Chain-type Price Index for December, released last Friday, shows that core inflation continues to be well above the Federal Reserve's 2% long-term target at 4.42%. The December core CPI release was higher, at 5.71%. The Fed is on record as using core PCE data as its primary inflation gauge.
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.
Trying to Make Apple Juice from Oranges: The Problem with Comparing Market Pricing and Fed Projections
As investors seek to pinpoint market expectations for Federal Reserve policy, it’s critical to consider not just rate projections and derivatives pricing, but the degree of uncertainty and distribution of outcomes.
Is the Bubble About to Burst?
I chose the topic for this month’s Absolute Return Letter during the Christmas break.
How to Get Clients in Fewer than Two Hours a Month
If you can’t be bothered to dedicate significant time or money to marketing, let me teach you a step-by-step way to get new clients in fewer than two hours a month.
Housing Slump From US to China Adds Risks to Global Economy
Shaky property markets across much of the world pose another risk to the global economy as higher interest rates erode household finances and threaten to exacerbate falling prices.
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.
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.
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.
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.
Home Ownership Rate: 65.9% in Q4 2022
Over the last decade, the general trend has been consistent: The rate of homeownership has struggled. The Census Bureau has now released its latest quarterly report with data through Q4 2022.
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.
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.
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.
Top Bond Fund Bets Markets Are Wrong on Rates, Again
After successful bets against the world’s major bond markets paid off in 2022, a BlueBay Asset Management fund is positioned for another debt selloff this year.
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.
The Big Four: Real Personal Income in December
Personal income (excluding transfer receipts) in December rose 0.27% and is up 5.3% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, real personal income (excluding transfer receipts) MoM was up 0.21% and was up 0.3% year-over-year.
A “Soft Landing” Scenario – Possibility Or Fed Myth?
Optimism is increasing on Wall Street, with investors hoping for a “soft landing” in the economy.
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.
Real Disposable Income Per Capita Continued to Inch Up in December
With the release of Friday morning's report on December's personal incomes and outlays, we can now take a closer look at "real" disposable personal income per capita. At two decimal places, the nominal 0.22% month-over-month change in disposable income comes to 0.17% when we adjust for inflation. This is a decrease from last month's .28% nominal and 0.18% real change. The year-over-year metrics are 2.71% nominal and -2.20% real.
PCE Price Index: December Headline at 5% YoY
The BEA's Personal Income and Outlays report for December was published on Friday morning by the Bureau of Economic Analysis. The latest headline PCE price index was up 0.05% month-over-month (MoM) and is up 5.02% year-over-year (YoY). Core PCE (YoY) dropped to 4.42%, still well above the Fed's 2% target rate.
Michigan Consumer Sentiment Up 8% in January, Beats Forecast
The January final report came in at 64.9, up 5.2 (8.7%) from the December final. Investing.com had forecast 64.6. Since its beginning in 1978, consumer sentiment is 24% below its average reading (arithmetic mean) and 23% below its geometric mean.
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."
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.
Key Inflation Gauge Cools Further, Paving Way for Smaller Fed Rate Hike
The Federal Reserve’s preferred inflation measures eased in December to the slowest annual paces in over a year while consumer spending fell, helping pave the way for policymakers to further scale back the pace of interest-rate hikes.
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.
Elephant in the Room
The current debt ceiling debate in Congress is a great reminder that investors should always prepare for the unexpected and invest in companies that are durable enough to withstand a range of economic scenarios.
An Inside Look at the GDP Q4 Advance Estimate
The accompanying chart is a way to visualize real GDP change since 2007 and uses stacked column chart to segment the four major components of GDP with a dashed line overlay to show the sum of the four, which is real GDP itself. Here is the latest overview from the Bureau of Labor Statistics.
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.
CFNAI Components: Employment, Production, Consumption, Sales
The Chicago Fed's National Activity Index, which I reported on yesterday, is based on 85 economic indicators drawn from four broad categories of data:
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.
Looking for Inflation Reduction Act Rebates to Go Green? Get Ready to Wait
For Americans with a New Year’s resolution to trade in their gas furnace or water heater for climate-friendly heat pumps, a word of caution: Generous Inflation Reduction Act rebates for home electrification took effect on Jan. 1, but they won’t actually be available to homeowners until year’s end or 2024 at the earliest, according the US Department of Energy.
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.
White House Under Pressure to Develop a 'Plan B' on Student Debt
The Biden administration is under pressure from Capitol Hill lawmakers and student debt advocates to develop contingency plans to cancel billions of dollars in student debt and to move forward quickly if the Supreme Court strikes down the administration’s initial executive action.
Tesla Gets $5 Billion Credit Line in Sign It's Nearing Investment-Grade Status
Tesla Inc. has secured a new $5 billion revolving credit facility, another sign that the company is nearing investment-grade status.
US Economy Shows Slowdown Signs After Growing 2.9% Last Quarter
The US economy grew faster than forecast into the end of 2022, but there were signs of slowing underlying demand as the steepest interest-rate hikes in decades threaten growth this year.
The Philly Fed ADS Business Conditions Index Update
We've updated our periodic look at the Philly Fed ADS Index which includes real GDP (Q4 2022 release) and initial jobless claims through 1/21.
European Outlook: Less Downside Now, But Caution Still Warranted
Focusing on high quality and liquidity when taking risk in portfolios will be key in 2023, as pressure on monetary policy remains intense.
The “Pain Trade” Is Higher For Now
The “pain trade” is likely higher over the next few weeks.
Why the Fed Should Raise Rates by Half a Percent
Having oscillated between anticipating another 50-basis-point interest-rate increase by the Federal Reserve next week or a downshift to 25 basis points, traders have settled solidly on the latter, guided both by Fed officials’ comments and by media reports.
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.
Q4 GDP Advance Estimate: Real GDP at 2.9%, Better Than Forecast
The advance estimate for Q4 GDP, to one decimal, came in at 2.9% (2.89% to two decimal places), a decrease from 3.2% (3.24% to two decimal places) for the Q3 third estimate. Investing.com had a consensus of 2.6%.
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.
Municipal Bonds: Is it Safe to Get Back in the Water?
Investors are still recovering from the municipal market beatdown of 2022, but the current higher absolute yield levels provide an attractive “re-entry” point for municipal market investors.
The Perversion Afflicting Value Investors
Successful investment management can be Impaired by perverse incentives, which are what now plagues value funds.
Big Banks Told to Phase Out Financing of New Fossil-Fuel Projects
Six Wall Street banks are being pressed by a group of shareholders to move faster on reducing their financing of fossil fuels to meet global climate goals.
The Case for the Federal Reserve to Pause Right Now
If you believe in the Milton Friedman adage that inflation is always and everywhere a monetary phenomenon, then you should also believe that the Federal Reserve can stop increasing interest rates. Now.
The Outlook for Income: Balancing Rates and Credit in 2023
When we think about generating income for our clients, for over 30 years we’ve thought the most efficient way to do this is to blend the two key risks of fixed income into one portfolio.
Global Economic Outlook: Run-of-the-Mill
The Northern Trust Economics team shares its outlook for key markets in the month ahead.
How To Make 2023 The Best Year Ever
Here are the three ways to get 2023 off to a great start so you can deliver even more massive value than ever before.
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.
A Charitable Way to Beat Taxes in the Afterlife
COVID-19 has been a catalyst for change in many aspects of our lives, not least the migration to flexible working, which would have taken many more years without the pandemic’s brutal intervention.
What Would an Early Biden Departure Mean for Markets?
Joe Biden entered the Oval Office with relatively low approval ratings.