The yield on the 10-year note ended June 28, 2022, at 3.20%, the 2-year note ended at 3.10%, and the 30-year at 3.30%.
What are the most common scenarios that give rise to private foundations converting to DAFs (or making a thoughtful decision not to convert), while preserving the original donor’s intent and satisfying the administrative concerns of surviving family members?
Our mid-March meeting’s “unenthusiastic” stance on global equities and negative stance on global bonds was a respectable decision, as was the overall macro theme “Stagflation Lite with GDP somewhat worse than consensus, but skirting recession.”
It came as a surprise when I found the annual report of the New Zealand SuperFund. While no one could fault it for sticking with passive investments, it chose a different path, with stunning results.
The headline number of 98.7 was a decrease of 4.5 from the final reading of 103.2 for May.
Wall Street analysts are sticking with their bullish earnings forecasts for this quarter, and Morgan Stanley’s Lisa Shalett says they need a reality check.
Our economy is in a will-they-won’t-they relationship with the next big recession.
Business has started to evaporate across home-lending firms in recent weeks, after the Federal Reserve boosted borrowing costs to tame decades-high inflation.
With this morning's release of the April S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index saw a 1.8% increase month over month. The non-seasonally adjusted national index saw a 20.4% YoY increase.
Here are three lessons about the cognitive biases advisors need to be aware of as the trusted protectors of their clients’ financial futures.
Many of my clients or their kids will face repaying student loans. And given the inflationary environment and related rising interest rates, some of them will need to make careful choices about prioritizing their payback plans.
The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for April. U.S. house prices were up 1.6%on a seasonally adjusted nominal basis from the previous month. Year-over-year the index is up 18.8% on a non-seasonally adjusted nominal basis. After adjusting for inflation and seasonality, the index is up 1.3% in April and up 8.2% year-over-year (seasonally adjusted).
Some Uber and Lyft drivers are finding that renting or buying a Tesla, the luxury electric car, is a more profitable option now amid soaring gas prices that have upended the economics of gig work.
Fifth District manufacturing activity declined in June, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite manufacturing index stood at -19 in June compared to -9 in May.
All eight indexes on our world watch list posted losses through June 27, 2022. The top performer is London's FTSE 100 with a YTD loss of 1.71%. Hong Kong's Hang Seng is in second with a loss of 4.99% and Tokyo's Nikkei 225 is in third with a loss of 6.67%. Coming in last is Germany's DAXK with a loss of 19.6% YTD.
To celebrate Pride Month, four PIMCO executives share their perspectives on inclusion and diversity in the workplace and the importance of visible representation.
An oil price and energy stock price reversion may be starting.
Real GDP declined at a 1.5% annual rate in the first quarter and, as of Friday, the Atlanta Fed's "GDP Now" model projects zero growth in Q2.
FINRA has released new data for margin debt, now available through May. The latest debt level is down 2.6% month-over-month.
The Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for June. The latest general business activity index came in at -17.7, down 10.4 from last month. All figures are seasonally adjusted.
Orders placed with US factories for durable goods rose more than expected in May, suggesting business investment so far remains firm even in the face of rising interest rates and mounting concerns about the economy.
The National Association of Realtors released the May data for their Pending Home Sales Index. According to the National Association of Realtors®, "Pending home sales crept higher in May, ending a six-month streak of declines."
The latest new orders number at 0.7% month-over-month (MoM) was better than the Investing.com 0.1% estimate. The series is up 10.6% year-over-year (YoY). If we exclude transportation, "core" durable goods was up 0.7% MoM and up 8.1% YoY.
Federal Reserve Chair Jerome Powell sees two possible paths for the economy and monetary policy over the next year: With some luck, inflation will cool with the help of more supply. And if that fails, the Fed won’t hesitate to impose a more painful solution.
Options insurance. Hedging with Treasuries. Using sentiment to pick a bottom. The things that have lessened the pain of past equity selloffs are coming up short this time around.
Another Federal Reserve official has lined up with those who favor following last week’s 75 basis-point interest-rate increase with the same again next month to curb rampant inflation.
Latin America tilted further left this week as Colombian voters elected Gustavo Petro as president. Come August, the former Bogotá mayor and member of the M-19 guerrilla organization will join the region’s growing list of leftist leaders in a political shift some are likening to the “pink tide” of the late 1990s and early 2000s.
The rise of remote work could make the Federal Reserve’s task of taming inflation a bit easier, while saving employers more than $200 billion, according to new research.
Wall Street’s biggest banks are set to return tens of billions of dollars to investors after all the lenders passed the Federal Reserve’s annual test of their ability to withstand market turmoil.
Investors in China can positively influence the behavior of Chinese companies and generate attractive risk-adjusted returns in the long run.
We've updated our periodic look at the Philly Fed ADS Index which includes Initial Jobless Claims through 6/18.
This morning's release of the May New Home Sales from the Census Bureau came in at 5696K, up 10.7% month-over-month from a revised 629K in April. The Investing.com forecast was for 588K. The median home price is now at $449K.
As of May 31, 2021, the 10-year note was 233 basis points above its historic closing low of 0.52%, reached on August 4, 2020
Free consulting is when you provide information and education to prove you know your stuff.
The latest index came in at 12, down from 23 last month, indicating slowed expansion in June. The future outlook fell to 10. All figures are seasonally adjusted. Here is a snapshot of the complete Kansas City Fed Manufacturing Survey.
U.S. stocks are extending weekly gains, rebounding from yesterday afternoon's slide as the markets remain choppy amid lingering global recession concerns that have been bolstered by monetary policy tightening efforts around the globe aimed at getting high inflation under control.
President Joe Biden and his allies in Congress are rightly concerned about surging prices.
This morning's seasonally adjusted 229K new claims, down 2K from the previous week's revised figure, was above the Investing.com forecast of 227K.
NFIB signals a recession is coming…again.
The Northern Trust Economics team shares its outlook for growth, inflation and interest rates.
While everyone’s financial journey is different, there are actionable steps advisors can take to empower their female clients’ financial futures and health.
Delegates at the second annual Qatar Economic Forum, from Tesla Chief Executive Officer Elon Musk and Nouriel Roubini to Atlas Merchant Capital’s Bob Diamond and StanChart’s Bill Winters, warned the US was heading toward a recession.
If you’re still holding out hope that the Federal Reserve will be able to engineer a soft landing in the US economy, abandon it.
The Chicago Fed's National Activity Index, which we reported on this morning, is based on 85 economic indicators drawn from four broad categories of data:
This morning's release of the May Existing-Home Sales showed that sales fell to a seasonally adjusted annual rate of 5.41 million units from the previous month's 5.6 million. The Investing.com consensus was for 5.39 million. The latest number represents a 3.4% decrease from the previous month and a 8.6% decrease YoY.
There is no Hall of Fame for single parents. There should be. The challenges of being a single parent are monumental.
Elon Musk confirmed the salaried workforce at Tesla Inc. would be cut by about 10% over the next three months.
US banking giants are poised to return $80 billion to shareholders after this year’s Federal Reserve stress tests, less than last year’s elevated level that followed a pandemic-driven buyback pause.
Delegates at the second annual Qatar Economic Forum, from Tesla Chief Executive Officer Elon Musk and Nouriel Roubini to Atlas Merchant Capital’s Bob Diamond and StanChart’s Bill Winters, warned the United States was heading toward a recession.
The Chicago Fed National Activity Index (CFNAI) fell to +0.01 in May from +0.40 in April. Two of the four broad categories of indicators used to construct the index made negative contributions in May, and two categories deteriorated from April. The index’s three-month moving average, CFNAI-MA3, decreased to +0.20 in May from +0.40 in April
An “economic hurricane” is coming.
The Federal Open Market Committee’s announcement of a 75-basis-point (bp) rate hike on June 15 revealed a shift in the Fed’s thinking.
Who would want to be tasked with investing their own and other people’s money in companies run by weirdos and jerks? But that turns out to be one of the most important skill sets shared by successful venture capitalists.
US credit-card rates have soared past 20%, mortgage costs have climbed to the highest since 2008 and companies are having a harder time borrowing money.
How high do interest rates have to go to control inflation?
Today we’ll look at some evidence this period could even be worse than the 1970s. Then we’ll read the mea culpa regrets of someone who had a big part in that drama.
The latest Conference Board Leading Economic Index (LEI) for May was down 0.4% from the April final figure of 118.8.
The one speed bump advisors keep tripping over is that, well, people are funny about their money.
The world’s central bankers are unleashing what may prove to be the most aggressive tightening of monetary policy since the 1980s, risking recessions and roiling financial markets as they rush to tackle the surge in inflation they didn’t see coming.
May's ZHVI came in at $349,816, up 1.5% from the previous month and up 20.7% YoY. After adjusting for inflation, the real figures are 0.85% MoM and 14.8% YoY.
Applications for US unemployment insurance were little changed last week, suggesting the labor market remains exceptionally tight.
The Federal Reserve raised rates by three-quarters of a percentage point (75 basis points) today, the most at any meeting since 1994 and exactly the move Chairman Jerome Powell was dismissive about in early May after the last meeting.
A key source of US economic growth this year -- consumer spending -- is showing signs of losing steam, even before Wednesday’s round of Federal Reserve rate hikes kick in.
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for May new residential housing starts. The latest reading of 1.549M was below the Investing.com forecast of 1.701M and a 14.4% decrease from the previous month's 1.810M.
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for May new residential building permits. The latest reading of 1.695M was down 7% from the April reading and is below the Investing.com forecast of 1.785M.
The latest Manufacturing Index came in at -3.3, down 5.9 from last month's 2.6. The 3-month moving average came in at 5.6, down from last month. Since this is a diffusion index, negative readings indicate contraction, positive ones indicate expansion. The Six-Month Outlook came in at -6.8, down from the previous month's 2.5.
The better ARK performed, the more money flowed into its main ETF, ARKK. It used this money to buy more sci-fi ARKK stocks, pushing up the prices of its holdings. This created a vicious cycle that has now reversed.
Wednesday's Federal Reserve meeting provides the clearest sign yet that the central bank is treating inflation as a national emergency, with markets expecting a 0.75% interest-rate increase.
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.
After months of hand-wringing, U.S. indexes are now in bear-market territory across the board, down 20% from their most recent highs.
Over the last year, we’ve experienced heightened macroeconomic uncertainty with several events impacting society and financial markets.
Recent experience shows that a third mandate – preventing financial instability – trumps the Fed’s two congressional mandates of full employment and low inflation.
US retail sales fell in May for the first time in five months, restrained by a plunge in auto purchases and other big-ticket items, suggesting moderating demand for goods amid decades-high inflation.
Federal Reserve Chair Jerome Powell, who’s carefully telegraphed interest rate hikes over four years, looks likely to abandon gradualism and move more forcefully to stamp out inflation along with growing concerns that it will persist.
The Census Bureau's Advance Retail Sales Report for May was released this morning. Headline sales came in at -0.27% month-over-month to two decimals and was below the Investing.com forecast of 0.2%. Core sales (ex Autos) came in at 0.52% MoM.
This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions at -1.2 was an increase of 10.4 from the previous month's -11.6. The Investing.com forecast was for a reading of 3.0.
In our new piece from the Franklin Templeton Institute, we examine the challenge of feeding a growing global population in the midst of climate change, geopolitical shocks and uncertainty.
Review the latest Weekly Headings by CIO Larry Adam.
For as long as the market allows, brokers, lenders, and investors are cashing in on the real estate boom in America’s prime vacation spots.
Rising inflation, rate hikes, supply-chain problems and the Russia-Ukraine war have contributed to growing recession fears.
“This market has a 1929 like feeling....”
As of June 13, the price of Regular and Premium were up 13 cents each from the previous week. According to GasBuddy.com, California has the highest average price for Regular at $6.43 and Georgia has the cheapest at $4.47. The WTIC end-of-day spot price closed at 120.93 and is up 2.1% from last week.
The headline number for May came in at 93.1, down fractionally from the previous month. The index is at the 16th percentile in this series.
This morning's release of the May Producer Price Index (PPI) for Finished Goods was up 1.8% month-over-month seasonally adjusted, up from a 0.8% change last month. It is at 16.4% year-over-year, up from a 15.5% increase last month, on a non-seasonally adjusted basis.
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.
With the Q1 GDP Second Estimate and the May close data, we now have an updated look at the popular "Buffett Indicator" -- the ratio of corporate equities to GDP. The current reading is 205.1%, down from 216.4% the previous quarter.
Social Security has a problem.
We are now seeing the highest Headline inflation rates since the second of the two recessions in the early 1980s. Here is a table showing the annualized change in Headline and Core CPI, not seasonally adjusted, for each of the past six months.
The proliferation of semiconductors throughout our economy may drive more durable, less cyclical demand and earnings.
What will be the Fed's next steps after a rapid course correction?
Market Indicators
Treasury Snapshot: 2-10 Spread at 0.1%
The yield on the 10-year note ended June 28, 2022, at 3.20%, the 2-year note ended at 3.10%, and the 30-year at 3.30%.
Common Scenarios for Transitioning a Private Foundation to a Donor Advised Fund
What are the most common scenarios that give rise to private foundations converting to DAFs (or making a thoughtful decision not to convert), while preserving the original donor’s intent and satisfying the administrative concerns of surviving family members?
More “Stagflation-Lite”, Moderately Positive On Equities Ex Europe, Still Negative On Global Bonds
Our mid-March meeting’s “unenthusiastic” stance on global equities and negative stance on global bonds was a respectable decision, as was the overall macro theme “Stagflation Lite with GDP somewhat worse than consensus, but skirting recession.”
How a New Zealand Superfund “Beat the Market”
It came as a surprise when I found the annual report of the New Zealand SuperFund. While no one could fault it for sticking with passive investments, it chose a different path, with stunning results.
Consumer Confidence Down Again in June
The headline number of 98.7 was a decrease of 4.5 from the final reading of 103.2 for May.
Morgan Stanley’s Shalett Says Analysts Are ‘Deer in Headlights’
Wall Street analysts are sticking with their bullish earnings forecasts for this quarter, and Morgan Stanley’s Lisa Shalett says they need a reality check.
Some Unsolicited Recession Survival Advice to Gen Z
Our economy is in a will-they-won’t-they relationship with the next big recession.
Mortgage Lenders Turn ‘Desperate’ as Soaring Rates Roil Industry
Business has started to evaporate across home-lending firms in recent weeks, after the Federal Reserve boosted borrowing costs to tame decades-high inflation.
April S&P/Case-Shiller Home Price Index: Up 20% YoY
With this morning's release of the April S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index saw a 1.8% increase month over month. The non-seasonally adjusted national index saw a 20.4% YoY increase.
Three Lessons About Cognitive Biases
Here are three lessons about the cognitive biases advisors need to be aware of as the trusted protectors of their clients’ financial futures.
Dealing with Student Loans, Rising Interest Rates, and Inflation
Many of my clients or their kids will face repaying student loans. And given the inflationary environment and related rising interest rates, some of them will need to make careful choices about prioritizing their payback plans.
FHFA House Price Index: Up 1.6% in April
The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for April. U.S. house prices were up 1.6%on a seasonally adjusted nominal basis from the previous month. Year-over-year the index is up 18.8% on a non-seasonally adjusted nominal basis. After adjusting for inflation and seasonality, the index is up 1.3% in April and up 8.2% year-over-year (seasonally adjusted).
Uber, Lyft Drivers Switch to Teslas as High Gas Prices Squeeze Profit
Some Uber and Lyft drivers are finding that renting or buying a Tesla, the luxury electric car, is a more profitable option now amid soaring gas prices that have upended the economics of gig work.
Richmond Fed Manufacturing: Additional Declines in June
Fifth District manufacturing activity declined in June, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite manufacturing index stood at -19 in June compared to -9 in May.
World Markets Update: June 27, 2022
All eight indexes on our world watch list posted losses through June 27, 2022. The top performer is London's FTSE 100 with a YTD loss of 1.71%. Hong Kong's Hang Seng is in second with a loss of 4.99% and Tokyo's Nikkei 225 is in third with a loss of 6.67%. Coming in last is Germany's DAXK with a loss of 19.6% YTD.
Power of Representation: the 'Us'es'
To celebrate Pride Month, four PIMCO executives share their perspectives on inclusion and diversity in the workplace and the importance of visible representation.
Oil Price Reversions – The Inevitable Outcome Of Recessions
An oil price and energy stock price reversion may be starting.
We're Not Already in a Recession
Real GDP declined at a 1.5% annual rate in the first quarter and, as of Friday, the Atlanta Fed's "GDP Now" model projects zero growth in Q2.
Margin Debt: Down 2.6% in May
FINRA has released new data for margin debt, now available through May. The latest debt level is down 2.6% month-over-month.
Dallas Fed Manufacturing: Growth Decelerates in June
The Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for June. The latest general business activity index came in at -17.7, down 10.4 from last month. All figures are seasonally adjusted.
US Durable Goods Orders Exceed Forecast in Broad Advance
Orders placed with US factories for durable goods rose more than expected in May, suggesting business investment so far remains firm even in the face of rising interest rates and mounting concerns about the economy.
Pending Home Sales Edged Up in May
The National Association of Realtors released the May data for their Pending Home Sales Index. According to the National Association of Realtors®, "Pending home sales crept higher in May, ending a six-month streak of declines."
Headline Durable Goods Orders Up 0.7% in May
The latest new orders number at 0.7% month-over-month (MoM) was better than the Investing.com 0.1% estimate. The series is up 10.6% year-over-year (YoY). If we exclude transportation, "core" durable goods was up 0.7% MoM and up 8.1% YoY.
Powell’s Path to 2% Inflation Needs Luck or, Failing That, Pain
Federal Reserve Chair Jerome Powell sees two possible paths for the economy and monetary policy over the next year: With some luck, inflation will cool with the help of more supply. And if that fails, the Fed won’t hesitate to impose a more painful solution.
Market Is Shredding All the Time-Tested Ways to Chart Its Course
Options insurance. Hedging with Treasuries. Using sentiment to pick a bottom. The things that have lessened the pain of past equity selloffs are coming up short this time around.
Fed Dove Daly Joins Officials Open to 75 Basis-Point July Hike
Another Federal Reserve official has lined up with those who favor following last week’s 75 basis-point interest-rate increase with the same again next month to curb rampant inflation.
A New “Pink Tide” in Latin America?
Latin America tilted further left this week as Colombian voters elected Gustavo Petro as president. Come August, the former Bogotá mayor and member of the M-19 guerrilla organization will join the region’s growing list of leftist leaders in a political shift some are likening to the “pink tide” of the late 1990s and early 2000s.
Remote Work Could Save Firms $206 Billion and Ease Pressure on the Fed
The rise of remote work could make the Federal Reserve’s task of taming inflation a bit easier, while saving employers more than $200 billion, according to new research.
Banks Ace Fed Stress Tests, Pave Way for Shareholder Payouts
Wall Street’s biggest banks are set to return tens of billions of dollars to investors after all the lenders passed the Federal Reserve’s annual test of their ability to withstand market turmoil.
How to Invest in China Responsibly
Investors in China can positively influence the behavior of Chinese companies and generate attractive risk-adjusted returns in the long run.
The Philly Fed ADS Business Conditions Index Update
We've updated our periodic look at the Philly Fed ADS Index which includes Initial Jobless Claims through 6/18.
New Home Sales Up 10.7% in May
This morning's release of the May New Home Sales from the Census Bureau came in at 5696K, up 10.7% month-over-month from a revised 629K in April. The Investing.com forecast was for 588K. The median home price is now at $449K.
Treasury Yields: A Long-Term Perspective
As of May 31, 2021, the 10-year note was 233 basis points above its historic closing low of 0.52%, reached on August 4, 2020
Are You Doing Free Consulting?
Free consulting is when you provide information and education to prove you know your stuff.
Kansas City Fed Mfg Survey: Further Slowing in June
The latest index came in at 12, down from 23 last month, indicating slowed expansion in June. The future outlook fell to 10. All figures are seasonally adjusted. Here is a snapshot of the complete Kansas City Fed Manufacturing Survey.
Stocks Adding to Weekly Gains
U.S. stocks are extending weekly gains, rebounding from yesterday afternoon's slide as the markets remain choppy amid lingering global recession concerns that have been bolstered by monetary policy tightening efforts around the globe aimed at getting high inflation under control.
What Biden Should (and Shouldn’t) Do About Inflation
President Joe Biden and his allies in Congress are rightly concerned about surging prices.
Weekly Unemployment Claims: Down 2K
This morning's seasonally adjusted 229K new claims, down 2K from the previous week's revised figure, was above the Investing.com forecast of 227K.
NFIB Signals A Recession Is Coming…Again
NFIB signals a recession is coming…again.
Heating and Cooling
The Northern Trust Economics team shares its outlook for growth, inflation and interest rates.
The Future of Female Financial Empowerment is Today
While everyone’s financial journey is different, there are actionable steps advisors can take to empower their female clients’ financial futures and health.
Recession Calls Grow; Mnuchin on Inflation Threat: Qatar Update
Delegates at the second annual Qatar Economic Forum, from Tesla Chief Executive Officer Elon Musk and Nouriel Roubini to Atlas Merchant Capital’s Bob Diamond and StanChart’s Bill Winters, warned the US was heading toward a recession.
The US Economy Is Headed for a Hard Landing
If you’re still holding out hope that the Federal Reserve will be able to engineer a soft landing in the US economy, abandon it.
CFNAI Components: Employment, Production, Consumption, Sales
The Chicago Fed's National Activity Index, which we reported on this morning, is based on 85 economic indicators drawn from four broad categories of data:
Existing-Home Sales: Down 3.4% in May
This morning's release of the May Existing-Home Sales showed that sales fell to a seasonally adjusted annual rate of 5.41 million units from the previous month's 5.6 million. The Investing.com consensus was for 5.39 million. The latest number represents a 3.4% decrease from the previous month and a 8.6% decrease YoY.
Single Parents Deserve a Hall of Fame
There is no Hall of Fame for single parents. There should be. The challenges of being a single parent are monumental.
Elon Musk Says Tesla Job Cuts Will Reduce Workforce by 3.5%
Elon Musk confirmed the salaried workforce at Tesla Inc. would be cut by about 10% over the next three months.
Big Banks Led by JPMorgan Set to Return $80 Billion to Investors
US banking giants are poised to return $80 billion to shareholders after this year’s Federal Reserve stress tests, less than last year’s elevated level that followed a pandemic-driven buyback pause.
Recession Warnings Multiply; Exxon Signs Gas Deal: Qatar Update
Delegates at the second annual Qatar Economic Forum, from Tesla Chief Executive Officer Elon Musk and Nouriel Roubini to Atlas Merchant Capital’s Bob Diamond and StanChart’s Bill Winters, warned the United States was heading toward a recession.
Chicago Fed: "Index suggests economic growth declined in May"
The Chicago Fed National Activity Index (CFNAI) fell to +0.01 in May from +0.40 in April. Two of the four broad categories of indicators used to construct the index made negative contributions in May, and two categories deteriorated from April. The index’s three-month moving average, CFNAI-MA3, decreased to +0.20 in May from +0.40 in April
“Economic Hurricane” – Hyperbole Or Real Possibility?
An “economic hurricane” is coming.
Playing Catch-Up: Takeaways from the June FOMC Meeting
The Federal Open Market Committee’s announcement of a 75-basis-point (bp) rate hike on June 15 revealed a shift in the Fed’s thinking.
How Venture Capital Thrives by Betting on Weirdness
Who would want to be tasked with investing their own and other people’s money in companies run by weirdos and jerks? But that turns out to be one of the most important skill sets shared by successful venture capitalists.
Credit Cards at 20%, Mortgages Near 6%: The Fed's Rate Hikes Are Already Having an Impact
US credit-card rates have soared past 20%, mortgage costs have climbed to the highest since 2008 and companies are having a harder time borrowing money.
An Active Week For Central Banks
How high do interest rates have to go to control inflation?
Gradually Worse
Today we’ll look at some evidence this period could even be worse than the 1970s. Then we’ll read the mea culpa regrets of someone who had a big part in that drama.
CB LEI: Falls Again in May
The latest Conference Board Leading Economic Index (LEI) for May was down 0.4% from the April final figure of 118.8.
Dr. Cole Cash and the Next Generation
The one speed bump advisors keep tripping over is that, well, people are funny about their money.
World’s Central Banks Unleash Most Hawkish Campaign Since 1980s
The world’s central bankers are unleashing what may prove to be the most aggressive tightening of monetary policy since the 1980s, risking recessions and roiling financial markets as they rush to tackle the surge in inflation they didn’t see coming.
Zillow Home Value Index: May Update
May's ZHVI came in at $349,816, up 1.5% from the previous month and up 20.7% YoY. After adjusting for inflation, the real figures are 0.85% MoM and 14.8% YoY.
US Jobless Claims Edge Lower, Reflecting Tight Labor Market
Applications for US unemployment insurance were little changed last week, suggesting the labor market remains exceptionally tight.
Fed Goes Bigger
The Federal Reserve raised rates by three-quarters of a percentage point (75 basis points) today, the most at any meeting since 1994 and exactly the move Chairman Jerome Powell was dismissive about in early May after the last meeting.
Consumer Spending Is Running Out Of Steam and the Market Isn’t Ready For It
A key source of US economic growth this year -- consumer spending -- is showing signs of losing steam, even before Wednesday’s round of Federal Reserve rate hikes kick in.
New Residential Housing Starts Down 14% in May
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for May new residential housing starts. The latest reading of 1.549M was below the Investing.com forecast of 1.701M and a 14.4% decrease from the previous month's 1.810M.
New Residential Building Permits: Down 14% from April
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for May new residential building permits. The latest reading of 1.695M was down 7% from the April reading and is below the Investing.com forecast of 1.785M.
Philly Fed Mfg Index: Activity Weakens in June
The latest Manufacturing Index came in at -3.3, down 5.9 from last month's 2.6. The 3-month moving average came in at 5.6, down from last month. Since this is a diffusion index, negative readings indicate contraction, positive ones indicate expansion. The Six-Month Outlook came in at -6.8, down from the previous month's 2.5.
ARKK Stocks Sunk
The better ARK performed, the more money flowed into its main ETF, ARKK. It used this money to buy more sci-fi ARKK stocks, pushing up the prices of its holdings. This created a vicious cycle that has now reversed.
Housing Market Cooldown Will Only Lead to More Dysfunction
Wednesday's Federal Reserve meeting provides the clearest sign yet that the central bank is treating inflation as a national emergency, with markets expecting a 0.75% interest-rate increase.
The Big Four: May Real Retail Sales Down 1.2%
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.
June Swoon: U.S. Stocks Slip Into Bear-market Territory As Inflation Concerns Rattle Investors
After months of hand-wringing, U.S. indexes are now in bear-market territory across the board, down 20% from their most recent highs.
The State of Sustainable Investing
Over the last year, we’ve experienced heightened macroeconomic uncertainty with several events impacting society and financial markets.
Will the Fed’s Third Mandate Derail Markets?
Recent experience shows that a third mandate – preventing financial instability – trumps the Fed’s two congressional mandates of full employment and low inflation.
US Retail Sales Post First Drop in Five Months as Auto Purchases Plunge
US retail sales fell in May for the first time in five months, restrained by a plunge in auto purchases and other big-ticket items, suggesting moderating demand for goods amid decades-high inflation.
Fed Mulls ‘Game Changer’ to Jolt Inflation: Decision Day Guide
Federal Reserve Chair Jerome Powell, who’s carefully telegraphed interest rate hikes over four years, looks likely to abandon gradualism and move more forcefully to stamp out inflation along with growing concerns that it will persist.
Retail Sales Down 0.3% in May, Worse Than Forecast
The Census Bureau's Advance Retail Sales Report for May was released this morning. Headline sales came in at -0.27% month-over-month to two decimals and was below the Investing.com forecast of 0.2%. Core sales (ex Autos) came in at 0.52% MoM.
Empire State Mfg Survey: Activity Levels Off
This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions at -1.2 was an increase of 10.4 from the previous month's -11.6. The Investing.com forecast was for a reading of 3.0.
The Future of Food is Technology
In our new piece from the Franklin Templeton Institute, we examine the challenge of feeding a growing global population in the midst of climate change, geopolitical shocks and uncertainty.
Weekly Investment Strategy
Review the latest Weekly Headings by CIO Larry Adam.
Americans Are Building Vacation-Home Empires With Easy-Money Loans
For as long as the market allows, brokers, lenders, and investors are cashing in on the real estate boom in America’s prime vacation spots.
Signs Point to Rising Recession Risk
Rising inflation, rate hikes, supply-chain problems and the Russia-Ukraine war have contributed to growing recession fears.
Is the Real Economy as Weak as Markets?
“This market has a 1929 like feeling....”
Weekly Gasoline Prices: WTIC at $120
As of June 13, the price of Regular and Premium were up 13 cents each from the previous week. According to GasBuddy.com, California has the highest average price for Regular at $6.43 and Georgia has the cheapest at $4.47. The WTIC end-of-day spot price closed at 120.93 and is up 2.1% from last week.
NFIB Small Business Survey: Mostly Unchanged in May, Inventory, Inflation, Problematic
The headline number for May came in at 93.1, down fractionally from the previous month. The index is at the 16th percentile in this series.
May Producer Price Index: Final Demand Up 10.8% YoY
This morning's release of the May Producer Price Index (PPI) for Finished Goods was up 1.8% month-over-month seasonally adjusted, up from a 0.8% change last month. It is at 16.4% year-over-year, up from a 15.5% increase last month, on a non-seasonally adjusted basis.
Components of the CPI: May
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.
Market Cap to GDP: May Buffett Valuation Indicator
With the Q1 GDP Second Estimate and the May close data, we now have an updated look at the popular "Buffett Indicator" -- the ratio of corporate equities to GDP. The current reading is 205.1%, down from 216.4% the previous quarter.
Social Security: Whistling Past The $96 Trillion Graveyard
Social Security has a problem.
May Inflation: The Components
We are now seeing the highest Headline inflation rates since the second of the two recessions in the early 1980s. Here is a table showing the annualized change in Headline and Core CPI, not seasonally adjusted, for each of the past six months.
Semiconductors: A Less Cyclical Future
The proliferation of semiconductors throughout our economy may drive more durable, less cyclical demand and earnings.
FOMC Preview
What will be the Fed's next steps after a rapid course correction?