"The bear is coming! The bear is coming!" Indeed, it is. Should you be worried?
Stocks start the week higher following recent bearishness.
Policymakers and forecasters were slow to change their mindset about inflation.
There’s no escaping the Federal Reserve (Fed) when it comes to investing these days.
At least a couple of major retailer stocks got clobbered last week as investors sold on reports that they missed earnings estimates.
While conventional wisdom says that rising interest rates are bad for stocks, it’s more accurate to say that rising rates tend to be bad for certain types of stocks.
Volatility is the standard measure used by advisors to measure risk. It has been useful but has limitations. There are ways that volatility will not provide an accurate representation of the risk of an investment portfolio.
Two of the world’s most respected investors, Jeremy Grantham and Ray Dalio, offered identical warnings: The bubble in U.S. equities is unwinding, and the economy is headed for stagflation.
Wherever you get your news, there's no escaping the perception that rising prices are breaking the US economy. Recession is almost a foregone conclusion on the Bloomberg terminal, which aggregates 150,000 news sources with every bulletin categorized and counted. Headlines with the word “inflation,” increased 345% to 186,000 times a month since the beginning of 2020, while “strong economy” declined 48% to 1,766 times monthly.
The US economy is starting to show signs of strain under the weight of decades-high inflation and climbing interest rates -- raising the risk of a downturn.
Some 162 companies in the S&P 500 Index received target price reductions Thursday compared with only 62 increases, according to Bloomberg data. The difference marked one of the sharpest swings in analyst sentiment in the 11 years of the series.
Technology stocks have taken a deep dive, blue-chip stocks are ailing, stablecoins aren’t stable, and don’t even ask about traditional crypto. Art markets, however, are alive and well — and it’s worth asking why.
The parallels between the 2020s and the 1970s grow more numerous by the day. The economy faces the threat of stagflation. Fuel prices are surging, and shortages loom. Politicians are flailing. The international environment is deteriorating. The Supreme Court is revisiting the 1973 Roe v. Wade ruling.
The rise in energy costs has contributed to rampant inflation, prompting central banks to raise rates and stoking investor concern growth will slow. The Biden administration is considering tapping a little-used emergency diesel fuel reserve to mitigate the supply crunch amid Russia’s invasion of Ukraine, according to a White House official.
The U.S. was experiencing some of the highest inflation in its history.
As with bodily atherosclerosis, curing our economic condition may require lifestyle modifications. But in one sense, it will be even worse: We’re all going to get the cure whether we want it or not. We’ll get its side effects, too… and you can bet there will be many.
April's ZHVI came in at $344,141, up 1.6% from the previous month and up 20.9% YoY. After adjusting for inflation, the real figures are 1.2% MoM and 15.4% YoY.
This week has seen a series of rapid contractions across the digital asset ecosystem. In a space that is well-known for volatility, even this week has stood out to observers.
A fatal shortcoming lies beneath the academic papers that have relied upon “back-testing” to promote the 4% rule. Use our Premium membership service to add your logo and send this to clients.
The recent surge in interest rates and inflation has put the record strength in housing under a microscope.
It's extremely difficult to watch the news and not feel overwhelmed by the avalanche of negative headlines.
Soaring commodity prices have helped drive inflation to 8.5%, by far the highest level in the last few decades.
The Northern Trust Economics team shares its outlook for key markets in the month ahead.
Since the global financial crisis, assets in private credit have grown exponentially as investors search for yield while protecting against inflation and rising interest rates.
Research Affiliates discusses the intriguing long-term outlook for value stocks, and provides insights on the models that underpin its asset class forecasts.
So here we are: When investors aren't worried about inflation, they're worrying about recession. Tech companies are announcing hiring freezes and job cuts in growing numbers. Homebuilders are starting to talk about slowing demand and the supply of existing homes is rising. Walmart reported this week that it has excess inventories.
New graduates face fierce financial headwinds of soaring rent, ballooning student debt and inflation. The oft-repeated message to the young to “save early and often” may feel near-impossible. Still, it's worth highlighting the benefit of doing so for those who can somehow squirrel some money away.
The latest Conference Board Leading Economic Index (LEI) for April was down 0.3% from the March final figure of 119.2.
The world economy is increasingly succumbing to the threat of stagflation reminiscent of its 1970s ordeal, a mounting headache for global finance chiefs already navigating the fallout from the war in Ukraine.
Treasuries gained for a second day as investors sought out the safest debt, driving the 10-year yield down 11 basis points to 2.77%, it’s lowest level since late April. Weaker than forecast US jobless claims and a sharp decline in a regional Philadelphia Fed survey spurred a burst of buying in Treasuries, with equities futures indicating that stock prices will open lower.
The Twitter spat about taxes and inflation involving President Joe Biden, Amazon.com Inc. founder Jeff Bezos and former Treasury Secretary Larry Summers has served mainly to prove that Twitter is a bad place to attempt intelligent debate. Still, the point at issue matters. It deserves a slightly less abbreviated treatment.
This morning's release of the April Existing-Home Sales showed that sales fell to a seasonally adjusted annual rate of 5.61 million units from the previous month's 5.75 million. The Investing.com consensus was for 5.65 million. The latest number represents a 2.4% decrease from the previous month and a 5.9% decrease YoY.
“What does a yellow light mean? Slow down!
John Paul Lech, Lead Manager of the Matthews Emerging Markets Equity Fund, explains the potential value that unique real estate equities can offer emerging market-growth portfolios.
Our weekly commentaries provide Euro Pacific Capital's latest thinking on developments in the global marketplace.
U.S. equities plunged, finishing near the lows of the day, following disappointing quarterly results from Target Corporation and Lowe's Companies, with both retailers warning of rising cost pressures.
The risks of tightening into a downturn.
Credit market volatility this year has been extreme.
We put together a histogram of the last 96 years of annual returns, bunching them into percentile ranges. You might expect something that looks like a bell curve, but you would be very wrong! As advisors, we constantly remind clients about the necessity to think long term. The problem is that it’s hard at any age to think in 30-year terms, especially in the middle of a year like 2022.
The White House said last week it is prepared to begin large sales of crude oil from the nation’s Strategic Petroleum Reserve (SPR).
If we follow the threads underlying inflation over the past year to their earliest beginnings, they run straight through the fog of pandemic, quickly pass by the financial crisis in 2008, and wind their way past the Great Inflation of the 1970s...
Like a supertanker, US debt-service costs only change course very slowly. But it’s happening now -- and from Washington’s point of view, the new direction is the wrong one: they’re heading up.
The world’s biggest retailer on Tuesday reported profit that fell short of Wall Street expectations and downgraded its outlook for full-year earnings per share from a mid-single digit increase to a 1% decline. Chief Executive Officer Doug McMillon said the bottom-line results were “unexpected” and reflecte the “unusual” environment. Walmart shares tumbled more than 11% on Tuesday, the most in 35 years.
The US economy won’t be able to avoid a bout of stagflation and markets have yet to tune into the risk of a significant slowdown in growth, said Mohamed El-Erian, the chair of Gramercy Fund Management and former chief executive officer of Pimco.
Bearish investors are snapping up bullish options to ensure that their defensively positioned portfolios won’t be left behind if the latest rebound in US stocks proves persistent.
Federal Reserve Chair Jerome Powell, in his most hawkish remarks to date, said the US central bank will keep raising interest rates until there is “clear and convincing” evidence that inflation is in retreat.
As of May 16, the price of Regular and Premium were up sixteen and seventeen cents each, respectively, from the previous week. According to GasBuddy.com, California has the highest average price for Regular at $6.00 and Oklahoma has the cheapest at $3.97. The WTIC end-of-day spot price closed at 112.40 (on 5/17) and is up 9% from last week.
Month-over-month nominal sales in April were up 0.90% and up 8.19% YoY. Real Retail Sales, calculated with the seasonally adjusted Consumer Price Index, increased by 0.57% and were down 0.04% YoY.
Inflation remains the player to watch this season when considering the market environment ahead. For the first time in a generation, investors are facing sustained higher inflation. What does this mean for the economy, the market, and investors?
Wylie Tollette, Head of Client Investment Solutions with Franklin Templeton Investment Solutions, joins the head of the Franklin Templeton Institute, Stephen Dover, for a conversation on the recent equity market selloff.
Plan for long-term Inflation that will be fought aggressively by the Fed, higher policy rates, and slower economic growth, according to Raghuram Rajan.
This article explores the benefits of annuities with lower explicit fees, a category I dubbed as “annuities Lite” in a previous article that focused on GLWBs.
The value of overall retail purchases increased 0.9%, after an upwardly revised 1.4% gain in March, Commerce Department figures showed Wednesday. Excluding vehicles and gas stations, sales rose 1% last month. The figures aren’t adjusted for inflation.
Local-currency debt from developing nations -- which is far more sensitive to a country’s domestic inflationary pressures than dollar denominated equivalents -- has slumped almost 9% this year, the most since at least 2008, according to a Bloomberg index.
The euro hasn’t been this cheap against the dollar for almost two decades, but it can get cheaper still. The tail risk of Russian gas and oil being suddenly shut off, most likely plunging the European continent into a sharp recession, is too unpredictable for investors to confidently bet on a rebound any time soon.
It’s been a brutal stretch for retail traders. Stocks are approaching a bear market. A selloff wiped $200 billion off cryptocurrencies in a single day. And Morgan Stanley found that amateur investors who jumped into the market when lockdowns began in 2020 have lost all their gains.
Equities reversed course and came off highs after Chinese economic data released Monday showed a sharp contraction as Covid lockdowns stung. Wheat jumped after India restricted exports, adding to broader commodity price pressure.
We've updated this series to include the April release of the Consumer Price Index as the deflator and the monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $46,240, down 8.0% from 45-plus years ago. Hourly earnings are below their all-time high after adjusting for inflation.
The consensus among economists puts the odds of a recession starting sometime in the next year at 30%, according to Bloomberg's most recent survey.
Take a look at real (inflation-adjusted) charts of the S&P 500, Dow 30, and Nasdaq Composite since 2000. We've updated this through the April 29, 2022 close.
U.S. stocks are trading lower as another week begins on the heels of six-straight weekly losses for the S&P 500.
Three powerful forces have unleashed a volatility storm in stock markets this year.
When life gives you lemons: sell them!
There’s no way to sugar coat it -the stock market has experienced a bear market affecting all sectors of the market except for Energy.
The seasonally adjusted median home sale price jumped 3.6% in April from March, the biggest increase in Zillow data dating to 2012. Inventory is starting to rise slightly, but it’s still so low that it’s vastly outstripped by demand, fueling housing appreciation.
The soaring dollar is propelling the global economy deeper into a synchronized slowdown by driving up borrowing costs and stoking financial-market volatility -- and there’s little respite on the horizon.
Deep-seated trends in trade and demographics helped keep inflation in a comfort zone for decades, but both are now pushing in the opposite direction. Globalization was fraying even before pandemic and war made things worse. Growth in the world’s labor force has slowed.
Historical data shows that stock markets have reacted poorly when the Fed has contracted its balance sheet and reduced liquidity – and the effect is more pronounced when Fed actions deviate from what the market expects.
In just more than a week, US Federal Reserve Chair Jerome Powell has gone from expressing confidence that policy makers will be able to avoid pushing the economy into a recession while rapidly raising interest rates to control inflation to remarking, as he did on Thursday, that a downturn is out of the central bank’s control.
Since the 1990s, the CalPERS sold LTC policies to its residents. The lawsuit over claims related to those policies illustrates the dangers clients face with government-sponsored insurance programs.
The best retirement-savings vehicle is one that few have heard about: I bonds. They offer a risk-free yield of 9.62%, yet the amount of I bonds issued is only a small fraction of the total volume of bond issuance by the U.S. Treasury. My guest today will explain that paradox.
This is also the 300th episode of the Gaining Perspective podcast, and no guest would be more appropriate than Zvi Bodie. He has eloquently and persuasively made the case for the financial services industry to provide products that respond to the needs of everyday investors.
Some big-name investors forecast that Bitcoin will eventually hit $100,000, $1 million or more. It could very well do that, but for now, its price is closer to $0. That’s both a risk and an opportunity.
The Strategic Investment Conference wrapped up this week with another wave of strong, fascinating speakers and panels. Today I have more to share and, as you’ll see, the plot thickened considerably.
The equity market was on cruise control, but now headline congestion has the S&P 500 down more than 17% year-to-date—its worst start to a year in at least 25 years.
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.
The U.S. debt cannot be paid, even in inflated dollars. Serious inflation is inevitable that will crash stock and bond markets, in addition to devaluing the dollar.
Rising yields, wider spreads, and heightened market volatility are providing an attractive environment, but caution in credit selection is warranted.
The Northern Trust Economics team shares its outlook for growth, inflation and interest rates.
The Fed is at a crucial junction, according to Lacy Hunt. It has to contain inflation. If not, the stability of the U.S. economy over the longer term is seriously in doubt.
In our latest insight, we analyze the recent DALBAR study to determine how well (or not well) active fixed-income investors performed during the bull market and explain what we believe will be the best approach for fixed-income investing given the start of a pro-inflation paradigm shift.
Jay Powell may think he is Paul Volcker, but he is not Paul Volcker.
This morning's release of the April Producer Price Index (PPI) for Finished Goods was up 0.8% month-over-month seasonally adjusted, down from a 2.1% change last month. It is at 15.6% year-over-year, up from a 15.3% increase last month, on a non-seasonally adjusted basis.
Just today, as US inflation came in a touch hotter than expected, the Chinese Yuan is pulling lower, testing the lows of May 9, 2022.
Coming out of the depths of the pandemic, US equity and fixed income markets are facing new challenges this year amid a rising interest rate environment and deceleration in growth.
In 1995, Treasury Secretary Robert Rubin asserted that a strong dollar is in the US national interest, a mantra repeated by each of his successors. They’re partially correct since the effects of the robust buck, which has soared this year, help some while harming others.
Surging inflation showed little sign of abating last month, indicating that grocery bills will keep going up, markets will remain volatile and investors will continue to feel pain in their 401(k)s.
The latest US inflation report should be a reality check for Wall Street, but many investors are still wearing rose-colored glasses. Bond yields ticked slightly higher Wednesday after the Labor Department reported that consumer prices rose more than forecast last month, but they are still nowhere near reflecting the monetary policy path it may take to rein in inflation.
Federal Reserve officials face pressure for more aggressive action after a hotter-than-expected inflation reading for April, though so far officials are sticking with their strategy to keep raising interest rates by a half point at each of their next two meetings.
As markets slumped in unison on Thursday, traders pointed to the chaos in crypto as a focal point of their concern. Strategists are increasingly worried that small traders, already nursing losses from the meme stock craze, will be wiped out on their crypto holdings and sell everything else.
Feeling a bit cheated when you look down at your plate? It’s not just a figment of your imagination — portions at US restaurants are indeed getting smaller. Call it shrinkflation: when sizes shrink, but you’re paying the same price, or sometimes even more, for the meal or product.
Inflation
Should You Be Afraid of a Bear Market?
"The bear is coming! The bear is coming!" Indeed, it is. Should you be worried?
Today's Options Market Update
Stocks start the week higher following recent bearishness.
How Inflation Went From Dormant To Dominant
Policymakers and forecasters were slow to change their mindset about inflation.
Money’s Many And Problematic Definitions
There’s no escaping the Federal Reserve (Fed) when it comes to investing these days.
Unprecedented
At least a couple of major retailer stocks got clobbered last week as investors sold on reports that they missed earnings estimates.
The Case for Quality Stocks Now
While conventional wisdom says that rising interest rates are bad for stocks, it’s more accurate to say that rising rates tend to be bad for certain types of stocks.
Why Volatility is the Wrong Measure of Investment Risk
Volatility is the standard measure used by advisors to measure risk. It has been useful but has limitations. There are ways that volatility will not provide an accurate representation of the risk of an investment portfolio.
Grantham and Dalio: The Equity Bubble is Bursting and Stagflation Awaits
Two of the world’s most respected investors, Jeremy Grantham and Ray Dalio, offered identical warnings: The bubble in U.S. equities is unwinding, and the economy is headed for stagflation.
Stagflation Is Looming, Right? Wrong, Economists Say
Wherever you get your news, there's no escaping the perception that rising prices are breaking the US economy. Recession is almost a foregone conclusion on the Bloomberg terminal, which aggregates 150,000 news sources with every bulletin categorized and counted. Headlines with the word “inflation,” increased 345% to 186,000 times a month since the beginning of 2020, while “strong economy” declined 48% to 1,766 times monthly.
Cracks in US Economy Start to Show as Recession Warnings Mount
The US economy is starting to show signs of strain under the weight of decades-high inflation and climbing interest rates -- raising the risk of a downturn.
Corporate Earnings Go From Savior to Nemesis for Stocks
Some 162 companies in the S&P 500 Index received target price reductions Thursday compared with only 62 increases, according to Bloomberg data. The difference marked one of the sharpest swings in analyst sentiment in the 11 years of the series.
Art Is an Investment to Appreciate
Technology stocks have taken a deep dive, blue-chip stocks are ailing, stablecoins aren’t stable, and don’t even ask about traditional crypto. Art markets, however, are alive and well — and it’s worth asking why.
The 1970s Had a Big Bright Side, Too
The parallels between the 2020s and the 1970s grow more numerous by the day. The economy faces the threat of stagflation. Fuel prices are surging, and shortages loom. Politicians are flailing. The international environment is deteriorating. The Supreme Court is revisiting the 1973 Roe v. Wade ruling.
Oil Gains on Tight Fuel Supplies While Recession Fears Grow
The rise in energy costs has contributed to rampant inflation, prompting central banks to raise rates and stoking investor concern growth will slow. The Biden administration is considering tapping a little-used emergency diesel fuel reserve to mitigate the supply crunch amid Russia’s invasion of Ukraine, according to a White House official.
Which Investments Worked 40 Years Ago When Inflation Was This High?
The U.S. was experiencing some of the highest inflation in its history.
Hardening of the Economies
As with bodily atherosclerosis, curing our economic condition may require lifestyle modifications. But in one sense, it will be even worse: We’re all going to get the cure whether we want it or not. We’ll get its side effects, too… and you can bet there will be many.
Zillow Home Value Index: April Update
April's ZHVI came in at $344,141, up 1.6% from the previous month and up 20.9% YoY. After adjusting for inflation, the real figures are 1.2% MoM and 15.4% YoY.
Digital Asset Market Note: A “De-pegging” Soros Would Be Proud Of
This week has seen a series of rapid contractions across the digital asset ecosystem. In a space that is well-known for volatility, even this week has stood out to observers.
Don’t Believe in the “Safe Withdrawal Rate”
A fatal shortcoming lies beneath the academic papers that have relied upon “back-testing” to promote the 4% rule. Use our Premium membership service to add your logo and send this to clients.
Don’t Discount Structural Housing Trends
The recent surge in interest rates and inflation has put the record strength in housing under a microscope.
Reasons for Hope in a World of Bad News
It's extremely difficult to watch the news and not feel overwhelmed by the avalanche of negative headlines.
Who Needs Tips When You’ve Got Friends Like This?
Soaring commodity prices have helped drive inflation to 8.5%, by far the highest level in the last few decades.
Global Economic Outlook: Tightening Up
The Northern Trust Economics team shares its outlook for key markets in the month ahead.
Not All Private Credit Is Created Equal
Since the global financial crisis, assets in private credit have grown exponentially as investors search for yield while protecting against inflation and rising interest rates.
All Asset All Access: Managing Portfolios Amid Evolving Market Narratives
Research Affiliates discusses the intriguing long-term outlook for value stocks, and provides insights on the models that underpin its asset class forecasts.
Welcome to Our Be-Careful-What-You-Wish-For Economy
So here we are: When investors aren't worried about inflation, they're worrying about recession. Tech companies are announcing hiring freezes and job cuts in growing numbers. Homebuilders are starting to talk about slowing demand and the supply of existing homes is rising. Walmart reported this week that it has excess inventories.
The Best Gift for College Graduates Is Help With Retirement
New graduates face fierce financial headwinds of soaring rent, ballooning student debt and inflation. The oft-repeated message to the young to “save early and often” may feel near-impossible. Still, it's worth highlighting the benefit of doing so for those who can somehow squirrel some money away.
CB LEI: Fall in April
The latest Conference Board Leading Economic Index (LEI) for April was down 0.3% from the March final figure of 119.2.
Stagflation Danger Stalks Global Economy Beset by War Fallout
The world economy is increasingly succumbing to the threat of stagflation reminiscent of its 1970s ordeal, a mounting headache for global finance chiefs already navigating the fallout from the war in Ukraine.
Bonds Come Back in Vogue as a Hedge Against Cratering Stocks
Treasuries gained for a second day as investors sought out the safest debt, driving the 10-year yield down 11 basis points to 2.77%, it’s lowest level since late April. Weaker than forecast US jobless claims and a sharp decline in a regional Philadelphia Fed survey spurred a burst of buying in Treasuries, with equities futures indicating that stock prices will open lower.
The US Needs to Get Real About Taxes and Inflation
The Twitter spat about taxes and inflation involving President Joe Biden, Amazon.com Inc. founder Jeff Bezos and former Treasury Secretary Larry Summers has served mainly to prove that Twitter is a bad place to attempt intelligent debate. Still, the point at issue matters. It deserves a slightly less abbreviated treatment.
Existing-Home Sales: Down 2.4% in April
This morning's release of the April Existing-Home Sales showed that sales fell to a seasonally adjusted annual rate of 5.61 million units from the previous month's 5.75 million. The Investing.com consensus was for 5.65 million. The latest number represents a 2.4% decrease from the previous month and a 5.9% decrease YoY.
What Does A Yellow Light Mean?
“What does a yellow light mean? Slow down!
Elevate Your Portfolio
John Paul Lech, Lead Manager of the Matthews Emerging Markets Equity Fund, explains the potential value that unique real estate equities can offer emerging market-growth portfolios.
The Fed Girds For Battle
Our weekly commentaries provide Euro Pacific Capital's latest thinking on developments in the global marketplace.
Schwab Market Update: Losses Accelerate into the Close
U.S. equities plunged, finishing near the lows of the day, following disappointing quarterly results from Target Corporation and Lowe's Companies, with both retailers warning of rising cost pressures.
Fed Aggressiveness Following Delayed Liftoff Sets Up 2023 Collision
The risks of tightening into a downturn.
Credit: This Time Is Different?
Credit market volatility this year has been extreme.
The One Thing the Market (Almost) Never Does
We put together a histogram of the last 96 years of annual returns, bunching them into percentile ranges. You might expect something that looks like a bell curve, but you would be very wrong! As advisors, we constantly remind clients about the necessity to think long term. The problem is that it’s hard at any age to think in 30-year terms, especially in the middle of a year like 2022.
Strategic Petroleum Reserve To Drop 40 Percent As Biden Sells Oil
The White House said last week it is prepared to begin large sales of crude oil from the nation’s Strategic Petroleum Reserve (SPR).
A Brief Chronicle of the Federal Reserve’s First Balance Sheet Contraction
If we follow the threads underlying inflation over the past year to their earliest beginnings, they run straight through the fog of pandemic, quickly pass by the financial crisis in 2008, and wind their way past the Great Inflation of the 1970s...
US Budget Feels Sting of Higher Rates, and It’s Just the Start
Like a supertanker, US debt-service costs only change course very slowly. But it’s happening now -- and from Washington’s point of view, the new direction is the wrong one: they’re heading up.
Walmart Flashes a Warning Sign to the Entire Consumer Economy
The world’s biggest retailer on Tuesday reported profit that fell short of Wall Street expectations and downgraded its outlook for full-year earnings per share from a mid-single digit increase to a 1% decline. Chief Executive Officer Doug McMillon said the bottom-line results were “unexpected” and reflecte the “unusual” environment. Walmart shares tumbled more than 11% on Tuesday, the most in 35 years.
El-Erian Says US Can’t Avoid Stagflation Even as Fed Tightens
The US economy won’t be able to avoid a bout of stagflation and markets have yet to tune into the risk of a significant slowdown in growth, said Mohamed El-Erian, the chair of Gramercy Fund Management and former chief executive officer of Pimco.
Buying Call Options Is New Stock Hedge for Traders Eyeing a Big Bounce
Bearish investors are snapping up bullish options to ensure that their defensively positioned portfolios won’t be left behind if the latest rebound in US stocks proves persistent.
Powell Says Fed Will ‘Keep Pushing’ Until Inflation Comes Down
Federal Reserve Chair Jerome Powell, in his most hawkish remarks to date, said the US central bank will keep raising interest rates until there is “clear and convincing” evidence that inflation is in retreat.
Weekly Gasoline Prices: WTIC Up 9%
As of May 16, the price of Regular and Premium were up sixteen and seventeen cents each, respectively, from the previous week. According to GasBuddy.com, California has the highest average price for Regular at $6.00 and Oklahoma has the cheapest at $3.97. The WTIC end-of-day spot price closed at 112.40 (on 5/17) and is up 9% from last week.
The Big Four: April Real Retail Sales Up 0.6%
Month-over-month nominal sales in April were up 0.90% and up 8.19% YoY. Real Retail Sales, calculated with the seasonally adjusted Consumer Price Index, increased by 0.57% and were down 0.04% YoY.
Playbook for a Fed rate hike cycle
Inflation remains the player to watch this season when considering the market environment ahead. For the first time in a generation, investors are facing sustained higher inflation. What does this mean for the economy, the market, and investors?
Making Sense of the Recent Market Selloffs
Wylie Tollette, Head of Client Investment Solutions with Franklin Templeton Investment Solutions, joins the head of the Franklin Templeton Institute, Stephen Dover, for a conversation on the recent equity market selloff.
Raghuram Rajan: Inflation, Higher Rates and Slower Growth to Come
Plan for long-term Inflation that will be fought aggressively by the Fed, higher policy rates, and slower economic growth, according to Raghuram Rajan.
The Elusive Benefits of “Lite” Annuities
This article explores the benefits of annuities with lower explicit fees, a category I dubbed as “annuities Lite” in a previous article that focused on GLWBs.
US Retail Sales Jump in Sign Robust Consumer Spending Continues
The value of overall retail purchases increased 0.9%, after an upwardly revised 1.4% gain in March, Commerce Department figures showed Wednesday. Excluding vehicles and gas stations, sales rose 1% last month. The figures aren’t adjusted for inflation.
Bond Traders Reel as Inflation Hits World’s Emerging Local Debt
Local-currency debt from developing nations -- which is far more sensitive to a country’s domestic inflationary pressures than dollar denominated equivalents -- has slumped almost 9% this year, the most since at least 2008, according to a Bloomberg index.
The Euro Will Survive Falling Below Parity With the Dollar
The euro hasn’t been this cheap against the dollar for almost two decades, but it can get cheaper still. The tail risk of Russian gas and oil being suddenly shut off, most likely plunging the European continent into a sharp recession, is too unpredictable for investors to confidently bet on a rebound any time soon.
Your Stocks, SPACs and Crypto Are Tumbling. Now What Do You Do?
It’s been a brutal stretch for retail traders. Stocks are approaching a bear market. A selloff wiped $200 billion off cryptocurrencies in a single day. And Morgan Stanley found that amateur investors who jumped into the market when lockdowns began in 2020 have lost all their gains.
Stagflation Risks Are Again Clouding a Global Market Rebound
Equities reversed course and came off highs after Chinese economic data released Monday showed a sharp contraction as Covid lockdowns stung. Wheat jumped after India restricted exports, adding to broader commodity price pressure.
Middle-Class Hourly Wages as of April 2022
We've updated this series to include the April release of the Consumer Price Index as the deflator and the monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $46,240, down 8.0% from 45-plus years ago. Hourly earnings are below their all-time high after adjusting for inflation.
Recession Unlikely in 2022
The consensus among economists puts the odds of a recession starting sometime in the next year at 30%, according to Bloomberg's most recent survey.
The S&P 500, Dow and Nasdaq Since Their 2000 Highs
Take a look at real (inflation-adjusted) charts of the S&P 500, Dow 30, and Nasdaq Composite since 2000. We've updated this through the April 29, 2022 close.
Schwab Market Update: Stocks Remain Hamstrung as Conviction Continues to Cool
U.S. stocks are trading lower as another week begins on the heels of six-straight weekly losses for the S&P 500.
Defensive Equities: Finding Stability in an Unhinged World
Three powerful forces have unleashed a volatility storm in stock markets this year.
What’s Fueling Food Inflation?
When life gives you lemons: sell them!
Mid Quarter Update
There’s no way to sugar coat it -the stock market has experienced a bear market affecting all sectors of the market except for Energy.
Housing Defies Fed’s Campaign to Control Inflation
The seasonally adjusted median home sale price jumped 3.6% in April from March, the biggest increase in Zillow data dating to 2012. Inventory is starting to rise slightly, but it’s still so low that it’s vastly outstripped by demand, fueling housing appreciation.
Dollar’s Strength Pushes World Economy Deeper Into Slowdown
The soaring dollar is propelling the global economy deeper into a synchronized slowdown by driving up borrowing costs and stoking financial-market volatility -- and there’s little respite on the horizon.
Age of Inflation in US Will Last Much Longer Than Pandemic Spike
Deep-seated trends in trade and demographics helped keep inflation in a comfort zone for decades, but both are now pushing in the opposite direction. Globalization was fraying even before pandemic and war made things worse. Growth in the world’s labor force has slowed.
Beware the Fed’s Balance Sheet Unwinding
Historical data shows that stock markets have reacted poorly when the Fed has contracted its balance sheet and reduced liquidity – and the effect is more pronounced when Fed actions deviate from what the market expects.
The Fed Sure Sounds as If It Expects a Recession
In just more than a week, US Federal Reserve Chair Jerome Powell has gone from expressing confidence that policy makers will be able to avoid pushing the economy into a recession while rapidly raising interest rates to control inflation to remarking, as he did on Thursday, that a downturn is out of the central bank’s control.
Lessons from CalPERS LTC Insurance Crisis
Since the 1990s, the CalPERS sold LTC policies to its residents. The lawsuit over claims related to those policies illustrates the dangers clients face with government-sponsored insurance programs.
The 9.62% Opportunity in I Bonds
The best retirement-savings vehicle is one that few have heard about: I bonds. They offer a risk-free yield of 9.62%, yet the amount of I bonds issued is only a small fraction of the total volume of bond issuance by the U.S. Treasury. My guest today will explain that paradox.
This is also the 300th episode of the Gaining Perspective podcast, and no guest would be more appropriate than Zvi Bodie. He has eloquently and persuasively made the case for the financial services industry to provide products that respond to the needs of everyday investors.
Crypto Winters Have Been Great Times to Buy. Today, Bitcoin Is Half Off
Some big-name investors forecast that Bitcoin will eventually hit $100,000, $1 million or more. It could very well do that, but for now, its price is closer to $0. That’s both a risk and an opportunity.
A Little Harder
The Strategic Investment Conference wrapped up this week with another wave of strong, fascinating speakers and panels. Today I have more to share and, as you’ll see, the plot thickened considerably.
Weekly Investment Strategy
The equity market was on cruise control, but now headline congestion has the S&P 500 down more than 17% year-to-date—its worst start to a year in at least 25 years.
Components of the CPI: April
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.
Our Debt Cannot Be Inflated Away
The U.S. debt cannot be paid, even in inflated dollars. Serious inflation is inevitable that will crash stock and bond markets, in addition to devaluing the dollar.
Income Strategy Update: Opportunities Ahead
Rising yields, wider spreads, and heightened market volatility are providing an attractive environment, but caution in credit selection is warranted.
Expeditious
The Northern Trust Economics team shares its outlook for growth, inflation and interest rates.
Lacy Hunt: The Stability of the US Economy is at Stake
The Fed is at a crucial junction, according to Lacy Hunt. It has to contain inflation. If not, the stability of the U.S. economy over the longer term is seriously in doubt.
Bond Investors Underperformed Despite A Bull Market. Now What?
In our latest insight, we analyze the recent DALBAR study to determine how well (or not well) active fixed-income investors performed during the bull market and explain what we believe will be the best approach for fixed-income investing given the start of a pro-inflation paradigm shift.
Chickenhawks
Jay Powell may think he is Paul Volcker, but he is not Paul Volcker.
April Producer Price Index: Final Demand Up 11% YoY
This morning's release of the April Producer Price Index (PPI) for Finished Goods was up 0.8% month-over-month seasonally adjusted, down from a 2.1% change last month. It is at 15.6% year-over-year, up from a 15.3% increase last month, on a non-seasonally adjusted basis.
The Chinese Devaluation Continues
Just today, as US inflation came in a touch hotter than expected, the Chinese Yuan is pulling lower, testing the lows of May 9, 2022.
Managing Challenges in US Equity and Fixed Income Markets Today
Coming out of the depths of the pandemic, US equity and fixed income markets are facing new challenges this year amid a rising interest rate environment and deceleration in growth.
The Rising Dollar Is Wreaking Havoc With US Trade
In 1995, Treasury Secretary Robert Rubin asserted that a strong dollar is in the US national interest, a mantra repeated by each of his successors. They’re partially correct since the effects of the robust buck, which has soared this year, help some while harming others.
How to Save Your Budget With Inflation Running Hot
Surging inflation showed little sign of abating last month, indicating that grocery bills will keep going up, markets will remain volatile and investors will continue to feel pain in their 401(k)s.
Market Is Still in the Denial Stage About Inflation
The latest US inflation report should be a reality check for Wall Street, but many investors are still wearing rose-colored glasses. Bond yields ticked slightly higher Wednesday after the Labor Department reported that consumer prices rose more than forecast last month, but they are still nowhere near reflecting the monetary policy path it may take to rein in inflation.
Fed Officials Stay Course on Half-Point Hikes Despite Hot Prices
Federal Reserve officials face pressure for more aggressive action after a hotter-than-expected inflation reading for April, though so far officials are sticking with their strategy to keep raising interest rates by a half point at each of their next two meetings.
Crypto Stress Is Feeding the Wider Selloff in Global Markets
As markets slumped in unison on Thursday, traders pointed to the chaos in crypto as a focal point of their concern. Strategists are increasingly worried that small traders, already nursing losses from the meme stock craze, will be wiped out on their crypto holdings and sell everything else.
Fewer Nuggets, Smaller Salads: Shrinkflation Hits US Restaurant Diners
Feeling a bit cheated when you look down at your plate? It’s not just a figment of your imagination — portions at US restaurants are indeed getting smaller. Call it shrinkflation: when sizes shrink, but you’re paying the same price, or sometimes even more, for the meal or product.