With wage growth still strong and unemployment low, the labour market is still historically tight. For now.
The US federal budget is on an unsustainable path…but not for the reasons that most people think.
The Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for January. The latest general business activity index came in at -8.4, up 11.6 from last month. All figures are seasonally adjusted.
Now is not the time to consider changing inflation targets.
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.
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 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."
In stock investing there’s a management style called “growth at a reasonable price” or GARP. It seeks to achieve steadier results by avoiding both expensive growth stocks and beaten-down value stocks.
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.
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 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.
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:
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. With a per-capita adjustment, the headline number is lower at 2.52% to two decimal points.
There’s a price to be paid for being early in investing even if you get the broader story right, as US stock market bears are learning the hard way.
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 layoff announcements coming lately from the chief executive officers of big technology companies all contain variations on the theme of “we hired too many people during the pandemic,” expressed with varying degrees of contrition.
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 latest index came in at -1, up 3 from last month's revised figured, indicated a slower pace of decline compared to December. The future outlook declined to 3. All figures are seasonally adjusted. Here is a snapshot of the complete Kansas City Fed Manufacturing Survey.
This morning's release of the December new home sales from the Census Bureau came in at 616K, up 2.3% month-over-month from a revised 602K in November. The Investing.com forecast was for 617K. The median home price is now at $442K.
The Chicago Fed National Activity Index (CFNAI) edged up to -0.49 in December from -0.51 in November. Three of the four broad categories of indicators used to construct the index made negative contributions in December, but two categories improved from November. The index's three-month moving average, CFNAI-MA3, decreased to -0.33 in December from -0.14 in November.
In part 1 of this two-part series on dividend growth stocks, I stressed the importance of having a plan.
Yesterday, we got our first look at December’s economic data for Europe, in the form of PMIs.
The latest new orders number at 5.6% month-over-month (MoM) was better than the Investing.com 2.5% estimate. The series is up 11.9% year-over-year (YoY). If we exclude transportation, "core" durable goods was down 0.1% MoM and up 2.1% YoY.
This morning's seasonally adjusted 186K new claims, down 6k from the previous week's revised figure, came in below the Investing.com forecast of 205K.
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 Northern Trust Economics team shares its outlook for key markets in the month ahead.
The US Purchasing Managers Composite Index (PMI) increased in January to 46.6 from 45 in December, representing a slowing economy but slightly less pessimistic than expected and better than the month before.
Older advisors need to step aside and make room for the up and comers.
U.S. equities finished mixed in a lackluster trading session, as Q4 earnings season shifted into a higher gear today.
As of January 23, the price of regular and premium gas were up 11 and 9 cents each, respectively, from the previous week. According to GasBuddy.com, Hawaii has the highest average price for regular at $4.94 and Texas has the cheapest at $3.05. The WTIC end-of-day spot price for crude oil closed at $81.62 and is up 1.8% from last week.
The first and easiest leg of the bursting of the bubble we called for a year ago is complete.
The Federal Reserve’s quantitative-tightening program risks being propelled toward an early end as US politicians bicker in Washington over raising the national debt limit, according to some economists and bond-market participants.
Two major issues clients should consider in creating their own long-term care plan are where they will live and how they will pay for the care they are likely to need.
Fifth district manufacturing decreased in January, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite manufacturing index is at -11 in January, down 12 from December. This is worse than the Investing.com forecast of -5.
First, the good news: we estimate that real GDP grew at a solid 2.8% annual rate in the fourth quarter.
Microsoft Corp. is investing $10 billion in OpenAI, whose artificial intelligence tool ChatGPT has lit up the internet since its introduction in November, amassing more than a million users within days and touching off a fresh debate over the role of AI in the workplace.
Seven of eight indexes on our world watch list posted gains through January 20, 2023. The top performer is Hong Kong's Hang Sent with a YTD gain of 11.44%. France's CAC 40 is in second with a YTD gain of 8.07%, and Germany's DAXK remains in third with a YTD gain of 7.97%. Coming in last for the third straight week is India's BSE SENEX with a loss of 0.36% YTD.
The problem with speculation is that there’s usually a gap between the underlying risk and the inevitable outcome.
In the weeks since the ChatGPT artificial intelligence tool took the world by storm, Nvidia Corp. has emerged as Wall Street’s preferred pick for traders seeking to profit from its potential.
Investors, economists and journalists have been talking incessantly about recession for the better part of the past year, and they’re all tired of it.
Artificial intelligence advances in a manner that’s hard for the human mind to grasp.
2022 was a year of disappointment and negative surprises as economies faced the consequences of geopolitical turmoil and central banks fighting inflation.
U.S. stocks are extending a late last-week rally, with Q4 earnings season set to shift into high gear.
The latest Conference Board Leading Economic Index (LEI) for December was down 1% from the November final figure of 111.6, marking the 10th consecutive MoM decline.
So far, my 2023 investing looks just like 2022: lots of waiting.
Advisors can illustrate the risks in single-stock positions by educating their clients on the historical evidence that demonstrates diversification is the prudent strategy.
FINRA has released new data for margin debt, now available through December. The latest debt level is down 5.77% month-over-month.
Is the Fed trying to wean the markets off monetary policy?
The world’s leading CEOs, politicians, and various do-gooders were in Davos, Switzerland, this week, discussing ways to solve our collective problems and create opportunities for their own companies. The most important conversations were off the record and many of the public speeches were simply performance art.
A January survey conducted by Bank of America shows that 91% of money managers believe China will “fully reopen” in 2023. That’s a significant increase from December 2022. Growth expectations for the country are also at a 17-year high.
It’s as close to a sure-thing bet as markets ever offer. When the S&P 500 falls 20% or more, a recession is close behind
The recurring farce of lifting the US government debt ceiling began again this week.
The yield on the 10-year note ended January 20, 2023 at 3.48%, the two-year note ended at 4.14%, and the 30-year at 3.66%.
Federal Reserve officials, heartened by an inflation slowdown, are poised to slow the pace of their interest-rate hikes for a second straight meeting and debate how much more they need to tighten to get prices under control.
After a year that brought a surprise surge in interest rates, the biggest stock drop since 2008 and a halt to major deals, plenty of finance executives lined up at the World Economic Forum’s annual meeting to say they now see reasons to be upbeat.
Treasury Secretary Janet Yellen has declared that the US has hit its federal debt limit, kicking off an intense political battle that puts the global financial system at risk.
Amazon.com Inc.’s cloud unit will spend $35 billion on new data centers in Virginia by 2040, underscoring its determination to stay ahead of rivals Microsoft Corp. and Alphabet Inc.
I've updated this series to include the December release of the consumer price index as the deflator and the monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $47,438, down 8.6% from 45-plus years ago. Hourly earnings are below their all-time high after adjusting for inflation.
The lag effect of monetary policy changes will surprise the Fed as the fiscal “pig” of stimulus begins to exit the economic “python.”
This morning's release of the December existing home sales showed that sales fell slightly to a seasonally adjusted annual rate of 4.02 million units from the previous month's 4.08 million. The Investing.com consensus was for 3.96 million. The latest number represents a 1.5% decrease from the previous month and its eleventh in a row. December saw a 34.0% decrease YoY.
December's ZHVI came in at $357,319, slightly up from the previous month by 0.01% and up 10.8% YoY. After adjusting for inflation, the real figures are -0.77% MoM and 3.02% YoY.
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for December new residential building permits. The latest reading of 1.33M was down 1.55% from the November reading and is below the Investing.com forecast of 1.37M.
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for December new residential housing starts. The latest reading of 1.382M was slightly above the Investing.com forecast of 1.359M and is a 1.4% decrease from the previous month's 1.401M.
The Northern Trust Economics team shares its outlook for growth, inflation, employment, and interest rates.
2022 was a difficult year for bond investors, but the combination of high inflation and tighter Fed policy should keep yields elevated, creating materially stronger fixed income returns in the new year.
We call them narratives, memes, or mind viruses.
The latest manufacturing index came in at -8.9, up 4.8 from last month's -13.7, marking the index's fifth negative reading in a row and the seventh in the last eight months. The three-month moving average came in at -12.7, down from last month. The six-month outlook came in at 4.9, up from the previous month's -0.9. Since this is a diffusion index, negative readings indicate contraction, positive ones indicate expansion.
Month-over-month nominal sales in November was down 1.15% and up 6.02% YoY. Real retail sales, calculated with the seasonally adjusted CPI, decreased by 1.07% and was down 0.38% YoY.
Federal Reserve Chair Jerome Powell is justifiably proud of the central bank’s independence — and refreshingly candid about its boundaries.
Behind the five-decade low US unemployment rate of 3.5% lies a 2.6 million-person mystery.
The National Association of Home Builders (NAHB) Housing Market Index (HMI) is a gauge of builder opinion on the relative level of current and future single-family home sales. It is a diffusion index, which means that a reading above 50 indicates a favorable outlook on home sales; below 50 indicates a negative outlook. The latest reading of 35 is up 4 from last month's 31, ending 12 consecutive monthly declines.
The Census Bureau's Advance Retail Sales Report for December was released this morning. Headline sales came in at -1.15% month-over-month and was below the Investing.com forecast of -0.8%. Core sales (ex Autos) came in at -1.13% MoM.
This morning's release of the December Producer Price Index (PPI) for Finished Goods was down 1.5% month-over-month seasonally adjusted, down from a 0.2% increase last month. It is at 8.8% year-over-year, down from a 10.6% increase last month, on a seasonally adjusted basis.
Oil prices continue to struggle as recession fears have curtailed the market is recent months.
We wrote last week about the soft landing that markets now seem to expect.
The Consumer Price Index for Urban Consumers (CPI-U) released for December puts the year-over-year inflation rate at 6.45%. It is well above the 3.74% average since the end of the Second World War and above its 10-year moving average, now at 2.5%.
Higher expenses and a plunge in deal-making hobbled quarterly results for two of Wall Street’s premier investment banks, with shares of Goldman Sachs Group Inc. sinking amid concern that the situation won’t improve anytime soon.
One of the main questions for the US economy in 2023 is how the trajectory of inflation will unfold.
A bad earnings season just might be good for stocks.
One syndrome is surprisingly common among the children of high-net worth parents: “failure to launch.”
Home prices have started to correct as interest rates rose sharply in 2022.
Many older workers who left the workforce during the pandemic may not return to the labor market.
Market Indicators
The Labor Market Is Still Historically Tight
With wage growth still strong and unemployment low, the labour market is still historically tight. For now.
Debt Limit Drama
The US federal budget is on an unsustainable path…but not for the reasons that most people think.
Dallas Fed Manufacturing Growth Slows in January
The Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for January. The latest general business activity index came in at -8.4, up 11.6 from last month. All figures are seasonally adjusted.
Are Inflation Targets Still On Point?
Now is not the time to consider changing inflation targets.
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.
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.
Pending Home Sales Increased 2.5% in December, Ending Six-Month Slide
The National Association of Realtors released the December data for its pending home sales index. According to the National Association of Realtors®, "Pending home sales increased in December for the first time since May 2022 — following six consecutive months of declines."
Growth Pains
In stock investing there’s a management style called “growth at a reasonable price” or GARP. It seeks to achieve steadier results by avoiding both expensive growth stocks and beaten-down value stocks.
I Asked ChatGPT to Write About Airline Deregulation in the U.S. Here’s How It Went
Since its launch in November, ChatGPT has been a smash hit. To explore the benefits of airline deregulation in the U.S., we sought the help of the AI content generator.
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.
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.
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.
Are Inflation Targets Still On Point?
Now is not the time to consider changing inflation targets.
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:
Q4 Real GDP Per Capita: 2.5% Versus the 2.9% Headline Real GDP
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. With a per-capita adjustment, the headline number is lower at 2.52% to two decimal points.
GDP and Jobs Show the Stock Market Bears Are Still Early
There’s a price to be paid for being early in investing even if you get the broader story right, as US stock market bears are learning the hard way.
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.
Big Tech Binged on Workers During Covid. Now, the Purge
The layoff announcements coming lately from the chief executive officers of big technology companies all contain variations on the theme of “we hired too many people during the pandemic,” expressed with varying degrees of contrition.
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.
Kansas City Fed Manufacturing Survey: Activity Was Flat
The latest index came in at -1, up 3 from last month's revised figured, indicated a slower pace of decline compared to December. The future outlook declined to 3. All figures are seasonally adjusted. Here is a snapshot of the complete Kansas City Fed Manufacturing Survey.
New Home Sales Up 2.3% in December
This morning's release of the December new home sales from the Census Bureau came in at 616K, up 2.3% month-over-month from a revised 602K in November. The Investing.com forecast was for 617K. The median home price is now at $442K.
Chicago Fed: Little Change in Economic Growth in December
The Chicago Fed National Activity Index (CFNAI) edged up to -0.49 in December from -0.51 in November. Three of the four broad categories of indicators used to construct the index made negative contributions in December, but two categories improved from November. The index's three-month moving average, CFNAI-MA3, decreased to -0.33 in December from -0.14 in November.
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.
China Reopening an Insignificant Factor for Germany So Far
Yesterday, we got our first look at December’s economic data for Europe, in the form of PMIs.
Headline Durable Goods Orders Up 5.6% in December
The latest new orders number at 5.6% month-over-month (MoM) was better than the Investing.com 2.5% estimate. The series is up 11.9% year-over-year (YoY). If we exclude transportation, "core" durable goods was down 0.1% MoM and up 2.1% YoY.
Weekly Unemployment Claims: Down 6K, Better Than Forecast
This morning's seasonally adjusted 186K new claims, down 6k from the previous week's revised figure, came in below the Investing.com forecast of 205K.
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.
Global Economic Outlook: Run-of-the-Mill
The Northern Trust Economics team shares its outlook for key markets in the month ahead.
US PMIs Show the Fed Walking a Fine Line
The US Purchasing Managers Composite Index (PMI) increased in January to 46.6 from 45 in December, representing a slowing economy but slightly less pessimistic than expected and better than the month before.
In Defense of Millennials
Older advisors need to step aside and make room for the up and comers.
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.
Weekly Gasoline Prices: Regular and Premium Increase for 4th Consecutive Week
As of January 23, the price of regular and premium gas were up 11 and 9 cents each, respectively, from the previous week. According to GasBuddy.com, Hawaii has the highest average price for regular at $4.94 and Texas has the cheapest at $3.05. The WTIC end-of-day spot price for crude oil closed at $81.62 and is up 1.8% from last week.
After a Timeout, Back to the Meat Grinder!
The first and easiest leg of the bursting of the bubble we called for a year ago is complete.
Debt-Limit Fight Risks Early End to Fed Quantitative Tightening
The Federal Reserve’s quantitative-tightening program risks being propelled toward an early end as US politicians bicker in Washington over raising the national debt limit, according to some economists and bond-market participants.
Creating a Plan for Long-Term Care
Two major issues clients should consider in creating their own long-term care plan are where they will live and how they will pay for the care they are likely to need.
Richmond Fed Manufacturing Declined in January
Fifth district manufacturing decreased in January, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite manufacturing index is at -11 in January, down 12 from December. This is worse than the Investing.com forecast of -5.
Rearview Mirror OK, Collision Ahead
First, the good news: we estimate that real GDP grew at a solid 2.8% annual rate in the fourth quarter.
Microsoft Invests $10 Billion in ChatGPT Maker OpenAI
Microsoft Corp. is investing $10 billion in OpenAI, whose artificial intelligence tool ChatGPT has lit up the internet since its introduction in November, amassing more than a million users within days and touching off a fresh debate over the role of AI in the workplace.
World Markets Update: January 20, 2023
Seven of eight indexes on our world watch list posted gains through January 20, 2023. The top performer is Hong Kong's Hang Sent with a YTD gain of 11.44%. France's CAC 40 is in second with a YTD gain of 8.07%, and Germany's DAXK remains in third with a YTD gain of 7.97%. Coming in last for the third straight week is India's BSE SENEX with a loss of 0.36% YTD.
Pushing Your Luck
The problem with speculation is that there’s usually a gap between the underlying risk and the inevitable outcome.
Nvidia to Win Big From ChatGPT Hype, Wall Street Predicts
In the weeks since the ChatGPT artificial intelligence tool took the world by storm, Nvidia Corp. has emerged as Wall Street’s preferred pick for traders seeking to profit from its potential.
Don't Get Disoriented by Recession-Talk Fatigue
Investors, economists and journalists have been talking incessantly about recession for the better part of the past year, and they’re all tired of it.
AI Is Improving Faster Than Most Humans Realize
Artificial intelligence advances in a manner that’s hard for the human mind to grasp.
Fed Up: Can the Fed Accommodate the Market?
2022 was a year of disappointment and negative surprises as economies faced the consequences of geopolitical turmoil and central banks fighting inflation.
Stocks Adding to Friday's Rally, Flood of Earnings Data Looms
U.S. stocks are extending a late last-week rally, with Q4 earnings season set to shift into high gear.
CB LEI: 10th Consecutive Decline in December, Recession Signal Continues
The latest Conference Board Leading Economic Index (LEI) for December was down 1% from the November final figure of 111.6, marking the 10th consecutive MoM decline.
Why I’m Waiting for the Fed to Pivot
So far, my 2023 investing looks just like 2022: lots of waiting.
Fortune Doesn’t Always Favor the Bold: The Perils of Concentrated Stock Positions
Advisors can illustrate the risks in single-stock positions by educating their clients on the historical evidence that demonstrates diversification is the prudent strategy.
Margin Debt Down 5.8% in December
FINRA has released new data for margin debt, now available through December. The latest debt level is down 5.77% month-over-month.
Monetary Policy. Is The Fed Trying To Wean Markets Off Of It?
Is the Fed trying to wean the markets off monetary policy?
Slow Change Speeds Up
The world’s leading CEOs, politicians, and various do-gooders were in Davos, Switzerland, this week, discussing ways to solve our collective problems and create opportunities for their own companies. The most important conversations were off the record and many of the public speeches were simply performance art.
Fund Managers Are Betting On China Stocks And Commodities As The Country Reopens
A January survey conducted by Bank of America shows that 91% of money managers believe China will “fully reopen” in 2023. That’s a significant increase from December 2022. Growth expectations for the country are also at a 17-year high.
There's an Upbeat Signal Buried Beneath the Stock Market's Surface
It’s as close to a sure-thing bet as markets ever offer. When the S&P 500 falls 20% or more, a recession is close behind
The Debt-Ceiling Nonsense Has Gone On Long Enough
The recurring farce of lifting the US government debt ceiling began again this week.
Treasury Snapshot: January 20, 2023
The yield on the 10-year note ended January 20, 2023 at 3.48%, the two-year note ended at 4.14%, and the 30-year at 3.66%.
Fed Set to Slow Rate Hikes Again and Debate How Much Further to Go
Federal Reserve officials, heartened by an inflation slowdown, are poised to slow the pace of their interest-rate hikes for a second straight meeting and debate how much more they need to tighten to get prices under control.
Wall Street Spreads New Year Cheer With Upbeat Davos Outlook
After a year that brought a surprise surge in interest rates, the biggest stock drop since 2008 and a halt to major deals, plenty of finance executives lined up at the World Economic Forum’s annual meeting to say they now see reasons to be upbeat.
What the US Debt-Ceiling Battle Means for Your Money
Treasury Secretary Janet Yellen has declared that the US has hit its federal debt limit, kicking off an intense political battle that puts the global financial system at risk.
Amazon to Plow Extra $35 Billion Into Virginia Data Centers in Cloud Race
Amazon.com Inc.’s cloud unit will spend $35 billion on new data centers in Virginia by 2040, underscoring its determination to stay ahead of rivals Microsoft Corp. and Alphabet Inc.
Middle-Class Hourly Wages as of December 2022
I've updated this series to include the December release of the consumer price index as the deflator and the monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $47,438, down 8.6% from 45-plus years ago. Hourly earnings are below their all-time high after adjusting for inflation.
The Lag Effect Of The Fiscal Pig & Economic Python
The lag effect of monetary policy changes will surprise the Fed as the fiscal “pig” of stimulus begins to exit the economic “python.”
Existing-Home Sales: Retreat for 11th Consecutive Month
This morning's release of the December existing home sales showed that sales fell slightly to a seasonally adjusted annual rate of 4.02 million units from the previous month's 4.08 million. The Investing.com consensus was for 3.96 million. The latest number represents a 1.5% decrease from the previous month and its eleventh in a row. December saw a 34.0% decrease YoY.
Zillow Home Value Index: December Update
December's ZHVI came in at $357,319, slightly up from the previous month by 0.01% and up 10.8% YoY. After adjusting for inflation, the real figures are -0.77% MoM and 3.02% YoY.
New Residential Building Permits: Down 1.55% in December
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for December new residential building permits. The latest reading of 1.33M was down 1.55% from the November reading and is below the Investing.com forecast of 1.37M.
New Residential Housing Starts Down 1.4% in December
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for December new residential housing starts. The latest reading of 1.382M was slightly above the Investing.com forecast of 1.359M and is a 1.4% decrease from the previous month's 1.401M.
A Not-So-Fresh Start
The Northern Trust Economics team shares its outlook for growth, inflation, employment, and interest rates.
Strategic Income Outlook: Was This a Crazy Year or What?
2022 was a difficult year for bond investors, but the combination of high inflation and tighter Fed policy should keep yields elevated, creating materially stronger fixed income returns in the new year.
Payden & Rygel 2023 Macro Outlook: Macro Memes & Mind Viruses
We call them narratives, memes, or mind viruses.
Philly Fed Manufacturing Index: Activity Continues Decline in January
The latest manufacturing index came in at -8.9, up 4.8 from last month's -13.7, marking the index's fifth negative reading in a row and the seventh in the last eight months. The three-month moving average came in at -12.7, down from last month. The six-month outlook came in at 4.9, up from the previous month's -0.9. Since this is a diffusion index, negative readings indicate contraction, positive ones indicate expansion.
The Big Four: December Real Retail Sales Continue to Decline
Month-over-month nominal sales in November was down 1.15% and up 6.02% YoY. Real retail sales, calculated with the seasonally adjusted CPI, decreased by 1.07% and was down 0.38% YoY.
The Fed Should Fight Inflation, Not Climate Change
Federal Reserve Chair Jerome Powell is justifiably proud of the central bank’s independence — and refreshingly candid about its boundaries.
Job Market's 2.6 Million Missing People Unnerves Star Harvard Economist
Behind the five-decade low US unemployment rate of 3.5% lies a 2.6 million-person mystery.
NAHB Housing Market Index: "Builder Confidence Uptick Signals Turning Point for Housing Lies Ahead"
The National Association of Home Builders (NAHB) Housing Market Index (HMI) is a gauge of builder opinion on the relative level of current and future single-family home sales. It is a diffusion index, which means that a reading above 50 indicates a favorable outlook on home sales; below 50 indicates a negative outlook. The latest reading of 35 is up 4 from last month's 31, ending 12 consecutive monthly declines.
Retail Sales Down 1.15% in December, Worse Than Forecast
The Census Bureau's Advance Retail Sales Report for December was released this morning. Headline sales came in at -1.15% month-over-month and was below the Investing.com forecast of -0.8%. Core sales (ex Autos) came in at -1.13% MoM.
December Producer Price Index: Finished Goods at 8.8% YoY
This morning's release of the December Producer Price Index (PPI) for Finished Goods was down 1.5% month-over-month seasonally adjusted, down from a 0.2% increase last month. It is at 8.8% year-over-year, down from a 10.6% increase last month, on a seasonally adjusted basis.
Time to Buy the Dip In Energy?
Oil prices continue to struggle as recession fears have curtailed the market is recent months.
Soft Landing?
We wrote last week about the soft landing that markets now seem to expect.
Long-Term Look at the CPI
The Consumer Price Index for Urban Consumers (CPI-U) released for December puts the year-over-year inflation rate at 6.45%. It is well above the 3.74% average since the end of the Second World War and above its 10-year moving average, now at 2.5%.
Goldman, Morgan Stanley Are Weighed Down by High Costs as M&A Slumps
Higher expenses and a plunge in deal-making hobbled quarterly results for two of Wall Street’s premier investment banks, with shares of Goldman Sachs Group Inc. sinking amid concern that the situation won’t improve anytime soon.
Sub-2% Inflation Is on the Horizon, But It Won't Last
One of the main questions for the US economy in 2023 is how the trajectory of inflation will unfold.
Time to Air Dirty Laundry? Bad Earnings Season Could Be Good
A bad earnings season just might be good for stocks.
Failure to Launch Syndrome: What It Is and Why Wealthy Families Are Susceptible
One syndrome is surprisingly common among the children of high-net worth parents: “failure to launch.”
Home Prices Will Likely Fall Further
Home prices have started to correct as interest rates rose sharply in 2022.
Content in Retirement
Many older workers who left the workforce during the pandemic may not return to the labor market.