The Federal Open Market Committee (FOMC) of the Federal Reserve did not make any formal changes to its policy, but did signal it would begin raising the fed funds rate soon.
At the January 2022 meeting, the U.S. Federal Reserve signaled an accelerated timetable to normalize policy, but it will be a long process amid an uncertain environment.
The latest index came in at 24, up from 22 last month, indicating steady continued expansion in January. The future outlook rose to 37. All figures are seasonally adjusted. Here is a snapshot of the complete Kansas City Fed Manufacturing Survey.
The National Association of Realtors released the December data for their Pending Home Sales Index. According to the National Association of Realtors®, "Pending home sales fell in December, denoting two straight months of declines."
The Northern Trust Economics team shares its outlook for key markets in the month ahead.
U.S. economic growth accelerated by more than forecast in the final three months of last year, fueled by the rebuilding of inventories and a pickup in consumer spending.
The Fed stayed the course today, with no change in the Fed Funds rate, no adjustment to the pace of tapering, no shift in the timeline for raising rates, and no indication that they intend to lift rates in larger steps.
The latest new orders number at -0.9% month-over-month (MoM) was slightly worse than the Investing.com -0.5% estimate. The series is up 12.7% year-over-year (YoY). If we exclude transportation, "core" durable goods was up 0.4% MoM and up 11.9% YoY.
Four prominent economists are imploring the White House to rethink a critical lever for policymaking that they call “insufficient to deliver the climate targets set in the Paris Agreement and by the Biden administration.”
ICYMI: In this roundup, we’re highlighting the five most popular pieces of content from the previous week.
This morning's release of the December New Home Sales from the Census Bureau came in at 811K, up 11.9% month-over-month from a downwardly revised 725K in November. The Investing.com forecast was for 760K. The median home price is now at $377.7K.
Energy sector leaders quickly shifted from the “green” economy in 2020 to the “brown” economy in 2021.
In our latest issue, Andy Rothman discusses how last year’s experiences can help us plan for China’s 2022 economic prospects.
Since May 2020, the Chinese Yuan has defied the path of other emerging market currencies, strengthening by almost 12%.
Insights into the economy can be found in surprising places. In a brothel, for instance, how services are priced and who ends up working there can reveal a lot about the state of the business cycle. It also reflects structural changes in our economy and society.
Given the many forces shaping the economy and markets, 2022 will be a stock picker’s—and a bond picker’s—market. Prices are indeed stretched in pockets of the market, but many areas offer attractive potential supported by compelling fundamentals and exposure to growth themes.
The headline number of 113.8 was a decrease of 1.4 from the final reading of 115.2 for December.
Fifth District manufacturing activity softened in January, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite index fell from 16 in December to 8 in January and indicates expansion.
With this morning's release of the November S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index saw a 1.18% increase month over month which is cut to 0.74% with inflation adjustment. The non-seasonally adjusted national index saw a 18.8% YoY increase.
The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for November. U.S. house prices were up 1.1 percent on a seasonally adjusted nominal basis from the previous month. Year-over-year the index is up 17.6% on a non-seasonally adjusted nominal basis. After adjusting for inflation and seasonality, the index is up 0.2% in November and up 8.4% year-over-year (seasonally adjusted).
As of January 24, the price of Regular and Premium were up two and one cent(s) each, respectively, from the previous week. According to GasBuddy.com, California has the highest average price for Regular at $4.63 and Mississippi has the cheapest at $2.95. The WTIC end-of-day spot price closed at 83.31 and is down 1.8% from last week.
In my work with female clients in transition, some of the most difficult conversations are with those whose lives have been upended by the death of their spouses.
We'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 $45,503, down 6.7% from 45-plus years ago. Hourly earnings are below their all-time high after adjusting for inflation.
"Travel on all roads and streets changed by +12.3% (+29.2 billion vehicle miles) for November 2021 as compared with November 2020. Travel for the month is estimated to be 267.5 billion vehicle miles." The 12-month moving average was up 0.92% month-over-month and up 9.5% year-over-year. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) was up 0.88% month-over-month and up 9.1% year-over-year.
When fourth quarter GDP data is released later this week, it will show that 2021 finished on a high note.
Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) fell to –0.15 in December from +0.44 in November. Two of the four broad categories of indicators used to construct the index made negative contributions in December, and all four categories deteriorated from November. The index’s three-month moving average, CFNAI-MA3, moved down to +0.33 in December from +0.40 in November.
Surging markets spurred a buying frenzy for everything from stocks and cryptocurrencies to new homes over the last two years. Now, with inflation at a nearly 40-year high and at least three priced-in rate hikes, the hunt for investing safe havens is on.
In what even the U.S. Treasury says will be a frustrating tax season, families claiming the child tax credit and newly self-employed Americans are among filers likely to see the biggest challenges this year.
Laurence Kotlikoff is a world-class economist who can convince you to pay off your mortgage and make you snort out your nose laughing at the same time; Money Magic is his compendium of life hacks aimed at leaving the reader wealthier and happier.
A “boatload” of news this week suggests that the shipping industry continues to look very attractive from an investing point of view. Global cargo carriers are estimated to have recorded $150 billion in profits in 2021, the first time they’ve collectively reached that figure in a single year.
Many analysts project China will soon be larger by GDP than the US—which shouldn’t be so hard with a population four times larger—but it’s not clear to me that China’s seemingly unlimited linear growth will continue three or four more decades. I can remember when the same was said about Japan.
The Department of Energy's Energy Information Administration (EIA) monthly data on volume sales is several weeks old when it released. The latest numbers, through mid-November, are now available.
The yield on the 10-year note ended January 21, 2022, at 1.75%, the 2-year note ended at 1.01%, and the 30-year at 2.07%.
In his renomination hearing, Fed Chair Jerome Powell stressed that the key to maximum sustainable employment and financial stability was keeping inflation low.
When reviewing the current state of the global economy and investment markets, we recommend focusing on market signals and weeding out market noise.
The latest Conference Board Leading Economic Index (LEI) for December was up 0.8% from the November final figure of 119.9. Annual revisions were made.
December's ZHVI came in at $320,662, up 1.4% from the previous month and up 19.6% YoY. After adjusting for inflation, the real figures are 0.97% MoM and 15.2% YoY.
For China, the year ahead holds special political and economic significance.
All 2-sigma equity bubbles in developed countries have broken back to trend.
This morning's release of the December Existing-Home Sales showed that sales fell to a seasonally adjusted annual rate of 6.10 million units from the previous month's 6.49 million. The Investing.com consensus was for 6.44 million. The latest number represents a 6% decrease from the previous month and an 8.3% decrease YoY.
The latest Manufacturing Index came in at 23.2, up 7.8 from last month's 15.4. The 3-month moving average came in at 25.9, 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 28.7, up 9.7 from the previous month's 19.
The pass rate for the second level of the chartered financial analyst exam bounced back from historic lows set last year.
If a recently widowed client hasn’t fired you, then you are among a lucky few. Here’s a thought experiment that illustrates the vulnerability advisors face when they don’t engage the female half of a couple.
Applications for U.S. state unemployment insurance surged last week to a three-month high, suggesting that the omicron variant is having a bigger impact on the labor market.
This morning's seasonally adjusted 260K new claims, down 30K from the previous week's figure, was at the Investing.com forecast.
FINRA has released new data for margin debt, now available through December. The latest debt level is down 0.93% month-over-month.
There is no shortage of candidates for the title of the most dangerous business idea of the moment. Management-by-algorithm may remove what humanity there is left in the corporate world. The office-less future may dissolve workers into angst-ridden atoms. I want to suggest a less obvious contender for the title: “social purpose.”
President Joe Biden’s Build Back Better plan is stalled, and the next steps are unclear. Some Democrats are talking about the need for new pandemic-relief measures, even as the White House is reportedly looking at a stripped-down version of the original proposal. Meanwhile, most analysts are giving short shrift to an issue that deserves more thought: how Build Back Better would make it harder to fight inflation.
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 1.702M was above the Investing.com forecast of 1.650M and a 1.4% increase from the previous month's 1.678M.
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 1.873M was up 9.09% from the November reading and is above the Investing.com forecast of 1.702M.
Rougher seas lie ahead for non-profit fiduciaries as the COVID-19 pandemic stretches into 2022 and refuses to retreat quietly into the night.
Just three out of eight indexes on our world watch list posted gains through January 18, 2022. The top performer is India's BSE SENSEX with a YTD gain of 4.29%. Hong Kong's Hang Seng is in second with a gain of 3.06%, and London's FTSE 100 is in third with a gain of 2.42%. Coming in last is our own S&P with a loss of 3.97%.
In response to a standing request, here is an updated comparison of four major secular bear markets. The numbers are through the December 31, 2021 close.
This Monday would’ve been Muhammed Ali’s 80th birthday!
Consumer prices rose 7.0% in 2021, the largest increase for any calendar year since 1981.
Since implementing new software, we’ve tripled our conversion rate with new prospects and dramatically shortened our sales cycle.
Many of us fantasize about quitting our jobs. In 2021, more people than ever turned that dream into reality. The latest U.S. Bureau of Labor Statistics data show that 4.53 million Americans voluntarily left their jobs last November. This was both a new monthly record and the eighth successive reading above the pre-pandemic high.
What insights can we glean beyond last year’s impressive 28% return? How did it compare it to global equities? I will show you some of the winners and losers, and finish with a few observations on the VIX.
Howard Marks’s latest memo considers one of investing’s most fundamental questions: when to sell. Howard explains that it’s foolish to sell because prices are up and because they’re down – and why, most of the time, staying invested is ultimately “the most important thing.”
This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions at -0.7 was a decrease of 32.6 from the previous month's 31.9. The Investing.com forecast was for a reading of 25.7.
The flow of excess cash has returned to normal, but the stock is still quite elevated.
Stocks are priced for perfection. Bonds trade at historically low yields despite 7% inflation. What could go wrong?
Today I’ll continue the annual forecast I began last week. New COVID developments are unfolding rapidly. If we’re lucky, they may carve out a nice bookend for us. But my worry is that rather than bookends it could be economicus interruptus. 2019 was not portending the most robust of economies. What if, in Groundhog Day fashion, we end up back where we were?
Month-over-month nominal sales in December were down 1.91% and up 16.95% YoY. Real Retail Sales, calculated with the seasonally adjusted Consumer Price Index, decreased by 2.37% and were up 9.17% YoY.
In an economy where the Fed has lost every systematic tether to common sense, empirical evidence, and concern for financial stability, it’s worth beginning this first market comment of 2022 by recalling the ways we’ve adapted in order to navigate that environment.
The strong inflation report combined with employment data will likely prompt the U.S. Federal Reserve to begin hiking its policy rate in March.
As we reflect on 2021, we can’t help but feel it was quite a year. Looking ahead, we think many of the same headwinds and tailwinds are likely to persist in 2022, so we are trying to find the right balance between offense and defense.
The Census Bureau's Advance Retail Sales Report for December was released this morning. Headline sales came in at -1.91% month-over-month to two decimals and was below the Investing.com forecast of -0.1%. Core sales (ex Autos) came in at -2.29% MoM.
The Northern Trust Economics team shares its outlook for the Federal Reserve and the U.S. economy.
The year ended on a highly upbeat tone for investors as equities rose to new heights against a backdrop of inflation and a prolonged pandemic
We've updated our monthly workforce analysis to include the latest Employment Report for December. The unemployment rate dropped to 3.9%, and the number of new nonfarm jobs (a relatively volatile number subject to extensive revisions) came in at 199K.
With the Q3 GDP Third Estimate and the December close data, we now have an updated look at the popular "Buffett Indicator" -- the ratio of corporate equities to GDP. The current reading is 206.6%, down from 212.7% the previous quarter.
In our Q3 market commentary, we described the primary economic fears behind a lackluster and trendless market.
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.
This morning's release of the December Producer Price Index (PPI) for Finished Goods was down 0.5% month-over-month seasonally adjusted, down from a 1.1% increase last month. It is at 12.4% year-over-year, down from 13.6% last month, on a non-seasonally adjusted basis. Core Finished Goods (less food and energy) came in at 0.6% MoM, unchanged from the previous month and is up 6.5% YoY NSA. The December PPI for Final Demand was at 0.2% month-over-month seasonally adjusted, down from a 1.0% increase last month. Investing.com MoM consensus forecasts for Final Demand were for 0.4% headline and 0.5% core.
2021 is now in the rear-view mirror and I believe that future financial historians may regard it as the year of peak speculation.
Investors expect the Fed’s bond-buying program to be promptly wound down and have calmly penciled in four increases in interest rates this year, starting in March.
Prices paid to U.S. producers decelerated in December as two key drivers of inflation in 2021 -- food and energy -- declined from a month earlier, representing a respite in the recent trend of sizable increases.
Note: This commentary has been updated with the latest numbers from the latest Employment Report for November. Consider: Today nearly one in three of the 65-69 cohort and one in five of the 70-74 cohort are in the labor force.
The surge in U.S. retirements during the Covid-19 pandemic was led by older White women without a college education, according to research by the St. Louis Federal Reserve.
Investing in ESG funds is like trying to navigate “the Wild West” as both regulations and enforcement fall short, according to Andrew Behar, the chief executive of As You Sow.
What does the ratio of unemployment claims tell us about where we are in the business cycle and recession risk?
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 Federal Reserve dealt the bond market a sharp body blow on January 5th with the release of the minutes of its last Federal Open Market Committee (FOMC) policy meeting in December 2021.
Inflation is rising rapidly, not an unexpected outcome given governments’ pandemic policy response of ballooning deficits and soaring government debt.
Monetary policy has driven U.S. stock prices to excessive valuations, according to Jeffrey Gundlach. But they remain cheap relative to bonds.
The global macro environment is ripe for EM assets outperformance as a combination of stronger growth in China, the end of exceptionalism in the US and less uncertainty on US interest rates, lead to a strong backdrop for EM assets.
The son of a terminally ill father consulted me recently. He was in dire emotional straits. If you had been his advisor, would his outcome have been better?
The Bureau of Labor Statistics released the December Consumer Price Index data this morning. The year-over-year non-seasonally adjusted Headline CPI came in at 7.04%, up from 6.81% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 5.45%, up from 4.93% the previous month and is above the Fed's 2% PCE target.
I find it difficult to act as a social worker. I’ve no background in psychology. I’ve no skills to help warring couples find their bliss and agree on a center point when they have differing opinions.
Market Indicators
Fed’s Message: Get Ready
The Federal Open Market Committee (FOMC) of the Federal Reserve did not make any formal changes to its policy, but did signal it would begin raising the fed funds rate soon.
The Fed’s Road to Full Normalization
At the January 2022 meeting, the U.S. Federal Reserve signaled an accelerated timetable to normalize policy, but it will be a long process amid an uncertain environment.
Kansas City Fed Survey: Activity Expanded in January
The latest index came in at 24, up from 22 last month, indicating steady continued expansion in January. The future outlook rose to 37. All figures are seasonally adjusted. Here is a snapshot of the complete Kansas City Fed Manufacturing Survey.
Pending Home Sales Fell in December
The National Association of Realtors released the December data for their Pending Home Sales Index. According to the National Association of Realtors®, "Pending home sales fell in December, denoting two straight months of declines."
Global Economic Outlook: Touch And Go
The Northern Trust Economics team shares its outlook for key markets in the month ahead.
U.S. Economic Growth Quickened Last Quarter With Inventory Boost
U.S. economic growth accelerated by more than forecast in the final three months of last year, fueled by the rebuilding of inventories and a pickup in consumer spending.
Liftoff in March
The Fed stayed the course today, with no change in the Fed Funds rate, no adjustment to the pace of tapering, no shift in the timeline for raising rates, and no indication that they intend to lift rates in larger steps.
Headline Durable Goods Orders Down 0/9% in December
The latest new orders number at -0.9% month-over-month (MoM) was slightly worse than the Investing.com -0.5% estimate. The series is up 12.7% year-over-year (YoY). If we exclude transportation, "core" durable goods was up 0.4% MoM and up 11.9% YoY.
Economists Implore Biden to Get Key Climate Number Right
Four prominent economists are imploring the White House to rethink a critical lever for policymaking that they call “insufficient to deliver the climate targets set in the Paris Agreement and by the Biden administration.”
Wednesday's Weekly Perspective: January 26, 2022
ICYMI: In this roundup, we’re highlighting the five most popular pieces of content from the previous week.
New Home Sales Up 11.9% in December
This morning's release of the December New Home Sales from the Census Bureau came in at 811K, up 11.9% month-over-month from a downwardly revised 725K in November. The Investing.com forecast was for 760K. The median home price is now at $377.7K.
Investing In Energy Transition: Gray Area Between Green And Brown Economies
Energy sector leaders quickly shifted from the “green” economy in 2020 to the “brown” economy in 2021.
Planning for ’22 with Lessons from ‘21
In our latest issue, Andy Rothman discusses how last year’s experiences can help us plan for China’s 2022 economic prospects.
Why Has the Chinese Yuan Been So Strong, Will it Last, and What Does it Mean for the US?
Since May 2020, the Chinese Yuan has defied the path of other emerging market currencies, strengthening by almost 12%.
Men Are Getting Left Behind in the Jobs Boom
Insights into the economy can be found in surprising places. In a brothel, for instance, how services are priced and who ends up working there can reveal a lot about the state of the business cycle. It also reflects structural changes in our economy and society.
1Q 2022 Outlooks from the Calamos Investment Team
Given the many forces shaping the economy and markets, 2022 will be a stock picker’s—and a bond picker’s—market. Prices are indeed stretched in pockets of the market, but many areas offer attractive potential supported by compelling fundamentals and exposure to growth themes.
Consumer Confidence Fell in January
The headline number of 113.8 was a decrease of 1.4 from the final reading of 115.2 for December.
Richmond Fed Manufacturing: Activity Softened in January
Fifth District manufacturing activity softened in January, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite index fell from 16 in December to 8 in January and indicates expansion.
November S&P/Case-Shiller Home Price Index: National Index up 18.8% YoY
With this morning's release of the November S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index saw a 1.18% increase month over month which is cut to 0.74% with inflation adjustment. The non-seasonally adjusted national index saw a 18.8% YoY increase.
FHFA House Price Index: Up Another 1.1% in November
The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for November. U.S. house prices were up 1.1 percent on a seasonally adjusted nominal basis from the previous month. Year-over-year the index is up 17.6% on a non-seasonally adjusted nominal basis. After adjusting for inflation and seasonality, the index is up 0.2% in November and up 8.4% year-over-year (seasonally adjusted).
Weekly Gasoline Prices: WTIC Down 1.8%
As of January 24, the price of Regular and Premium were up two and one cent(s) each, respectively, from the previous week. According to GasBuddy.com, California has the highest average price for Regular at $4.63 and Mississippi has the cheapest at $2.95. The WTIC end-of-day spot price closed at 83.31 and is down 1.8% from last week.
Advising Young Widows: It’s Not Just About the Money
In my work with female clients in transition, some of the most difficult conversations are with those whose lives have been upended by the death of their spouses.
Middle-Class Hourly Wages as of December 2021
We'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 $45,503, down 6.7% from 45-plus years ago. Hourly earnings are below their all-time high after adjusting for inflation.
America's Driving Habits as of November 2021
"Travel on all roads and streets changed by +12.3% (+29.2 billion vehicle miles) for November 2021 as compared with November 2020. Travel for the month is estimated to be 267.5 billion vehicle miles." The 12-month moving average was up 0.92% month-over-month and up 9.5% year-over-year. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) was up 0.88% month-over-month and up 9.1% year-over-year.
The 2021 Finish: Fast Growth, High Inflation
When fourth quarter GDP data is released later this week, it will show that 2021 finished on a high note.
Chicago Fed: "Index suggests economic growth declined in December"
Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) fell to –0.15 in December from +0.44 in November. Two of the four broad categories of indicators used to construct the index made negative contributions in December, and all four categories deteriorated from November. The index’s three-month moving average, CFNAI-MA3, moved down to +0.33 in December from +0.40 in November.
Real Estate Is Emerging as a Hedge Against Roaring Inflation
Surging markets spurred a buying frenzy for everything from stocks and cryptocurrencies to new homes over the last two years. Now, with inflation at a nearly 40-year high and at least three priced-in rate hikes, the hunt for investing safe havens is on.
‘Disappointing Tax Season’ Points Toward Smaller, Later Refunds
In what even the U.S. Treasury says will be a frustrating tax season, families claiming the child tax credit and newly self-employed Americans are among filers likely to see the biggest challenges this year.
An Economist Looks at School, Marriage, Divorce, and Moving in with Your Mom
Laurence Kotlikoff is a world-class economist who can convince you to pay off your mortgage and make you snort out your nose laughing at the same time; Money Magic is his compendium of life hacks aimed at leaving the reader wealthier and happier.
The Shipping Industry Has Never Been So Profitable as It Is Now
A “boatload” of news this week suggests that the shipping industry continues to look very attractive from an investing point of view. Global cargo carriers are estimated to have recorded $150 billion in profits in 2021, the first time they’ve collectively reached that figure in a single year.
Beijing’s Dilemmas
Many analysts project China will soon be larger by GDP than the US—which shouldn’t be so hard with a population four times larger—but it’s not clear to me that China’s seemingly unlimited linear growth will continue three or four more decades. I can remember when the same was said about Japan.
Gasoline Volume Sales Down 8.9% YoY
The Department of Energy's Energy Information Administration (EIA) monthly data on volume sales is several weeks old when it released. The latest numbers, through mid-November, are now available.
Treasury Snapshot: 10-Year Note at 1.75%
The yield on the 10-year note ended January 21, 2022, at 1.75%, the 2-year note ended at 1.01%, and the 30-year at 2.07%.
Weekly Market Snapshot
In his renomination hearing, Fed Chair Jerome Powell stressed that the key to maximum sustainable employment and financial stability was keeping inflation low.
The WisdomTree Q1 2022 Economic and Market Outlook in 10 Charts or Less
When reviewing the current state of the global economy and investment markets, we recommend focusing on market signals and weeding out market noise.
CB LEI: Rising Trajectory Continues in December
The latest Conference Board Leading Economic Index (LEI) for December was up 0.8% from the November final figure of 119.9. Annual revisions were made.
Zillow Home Value Index: Low Inventory in December, Growing Prices
December's ZHVI came in at $320,662, up 1.4% from the previous month and up 19.6% YoY. After adjusting for inflation, the real figures are 0.97% MoM and 15.2% YoY.
China’s Economy in the Year of the Tiger
For China, the year ahead holds special political and economic significance.
Let The Wild Rumpus Begin
All 2-sigma equity bubbles in developed countries have broken back to trend.
Existing-Home Sales: Down 6% from November and 8.3% YoY
This morning's release of the December Existing-Home Sales showed that sales fell to a seasonally adjusted annual rate of 6.10 million units from the previous month's 6.49 million. The Investing.com consensus was for 6.44 million. The latest number represents a 6% decrease from the previous month and an 8.3% decrease YoY.
Philly Fed Mfg Index: Growth Continues
The latest Manufacturing Index came in at 23.2, up 7.8 from last month's 15.4. The 3-month moving average came in at 25.9, 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 28.7, up 9.7 from the previous month's 19.
CFA Pass Rate Ticks Up to 46% Following Lows for the Level II Exam
The pass rate for the second level of the chartered financial analyst exam bounced back from historic lows set last year.
Man, You've Got This! Or Maybe Not
If a recently widowed client hasn’t fired you, then you are among a lucky few. Here’s a thought experiment that illustrates the vulnerability advisors face when they don’t engage the female half of a couple.
U.S. Jobless Claims Surge to Three-Month High on Omicron Impact
Applications for U.S. state unemployment insurance surged last week to a three-month high, suggesting that the omicron variant is having a bigger impact on the labor market.
Weekly Unemployment Claims: Down 30K
This morning's seasonally adjusted 260K new claims, down 30K from the previous week's figure, was at the Investing.com forecast.
Margin Debt: Down 0.93% in December
FINRA has released new data for margin debt, now available through December. The latest debt level is down 0.93% month-over-month.
Business Doesn’t Need a ‘Social Purpose’ Revolution
There is no shortage of candidates for the title of the most dangerous business idea of the moment. Management-by-algorithm may remove what humanity there is left in the corporate world. The office-less future may dissolve workers into angst-ridden atoms. I want to suggest a less obvious contender for the title: “social purpose.”
Build Back Better Would Make It Harder to Fight Inflation
President Joe Biden’s Build Back Better plan is stalled, and the next steps are unclear. Some Democrats are talking about the need for new pandemic-relief measures, even as the White House is reportedly looking at a stripped-down version of the original proposal. Meanwhile, most analysts are giving short shrift to an issue that deserves more thought: how Build Back Better would make it harder to fight inflation.
New Residential Housing Starts Up 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 1.702M was above the Investing.com forecast of 1.650M and a 1.4% increase from the previous month's 1.678M.
New Residential Building Permits: Up 9.1% 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 1.873M was up 9.09% from the November reading and is above the Investing.com forecast of 1.702M.
The 2022 List Issue, Part 5: 4 Steps for Non-Profit Fiduciaries to Consider This Year
Rougher seas lie ahead for non-profit fiduciaries as the COVID-19 pandemic stretches into 2022 and refuses to retreat quietly into the night.
World Markets Update: January 18, 2022
Just three out of eight indexes on our world watch list posted gains through January 18, 2022. The top performer is India's BSE SENSEX with a YTD gain of 4.29%. Hong Kong's Hang Seng is in second with a gain of 3.06%, and London's FTSE 100 is in third with a gain of 2.42%. Coming in last is our own S&P with a loss of 3.97%.
The Four Totally Bad Bear Recoveries: Where Is Today's Market?
In response to a standing request, here is an updated comparison of four major secular bear markets. The numbers are through the December 31, 2021 close.
Weekly Investment Strategy
This Monday would’ve been Muhammed Ali’s 80th birthday!
Who Gets the Blame for Inflation
Consumer prices rose 7.0% in 2021, the largest increase for any calendar year since 1981.
How Proving Your Planning Value Upfront Boosts Prospect Conversion Rates
Since implementing new software, we’ve tripled our conversion rate with new prospects and dramatically shortened our sales cycle.
Can You Afford to Join the Great Resignation?
Many of us fantasize about quitting our jobs. In 2021, more people than ever turned that dream into reality. The latest U.S. Bureau of Labor Statistics data show that 4.53 million Americans voluntarily left their jobs last November. This was both a new monthly record and the eighth successive reading above the pre-pandemic high.
Deep Analytic Market Insights for 2021
What insights can we glean beyond last year’s impressive 28% return? How did it compare it to global equities? I will show you some of the winners and losers, and finish with a few observations on the VIX.
Selling Out
Howard Marks’s latest memo considers one of investing’s most fundamental questions: when to sell. Howard explains that it’s foolish to sell because prices are up and because they’re down – and why, most of the time, staying invested is ultimately “the most important thing.”
Empire State Mfg Survey: Activity Leveled Off
This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions at -0.7 was a decrease of 32.6 from the previous month's 31.9. The Investing.com forecast was for a reading of 25.7.
Last Year's Saving Is This Year’s Spending
The flow of excess cash has returned to normal, but the stock is still quite elevated.
2022 Investment Outlook (Part 2) – Stocks and Bonds
Stocks are priced for perfection. Bonds trade at historically low yields despite 7% inflation. What could go wrong?
Year of the Bookends
Today I’ll continue the annual forecast I began last week. New COVID developments are unfolding rapidly. If we’re lucky, they may carve out a nice bookend for us. But my worry is that rather than bookends it could be economicus interruptus. 2019 was not portending the most robust of economies. What if, in Groundhog Day fashion, we end up back where we were?
The Big Four: December Real Retail Sales Down 2.4%
Month-over-month nominal sales in December were down 1.91% and up 16.95% YoY. Real Retail Sales, calculated with the seasonally adjusted Consumer Price Index, decreased by 2.37% and were up 9.17% YoY.
Return-Free Risk
In an economy where the Fed has lost every systematic tether to common sense, empirical evidence, and concern for financial stability, it’s worth beginning this first market comment of 2022 by recalling the ways we’ve adapted in order to navigate that environment.
December CPI Data Suggests U.S. Inflation May Be Stabilizing, But Hasn’t Peaked Yet
The strong inflation report combined with employment data will likely prompt the U.S. Federal Reserve to begin hiking its policy rate in March.
Strategic Income Outlook: One Heck of a Year
As we reflect on 2021, we can’t help but feel it was quite a year. Looking ahead, we think many of the same headwinds and tailwinds are likely to persist in 2022, so we are trying to find the right balance between offense and defense.
Retail Sales Down 1.9% in December, Up 16.9% YoY
The Census Bureau's Advance Retail Sales Report for December was released this morning. Headline sales came in at -1.91% month-over-month to two decimals and was below the Investing.com forecast of -0.1%. Core sales (ex Autos) came in at -2.29% MoM.
In Like A Lion
The Northern Trust Economics team shares its outlook for the Federal Reserve and the U.S. economy.
Q4 2021: “Tracking the Recovery: Inflationary Pressure a Symptom Not the Cause”
The year ended on a highly upbeat tone for investors as equities rose to new heights against a backdrop of inflation and a prolonged pandemic
U.S. Workforce: December 2021 Update
We've updated our monthly workforce analysis to include the latest Employment Report for December. The unemployment rate dropped to 3.9%, and the number of new nonfarm jobs (a relatively volatile number subject to extensive revisions) came in at 199K.
Market Cap to GDP: December Buffett Valuation Indicator
With the Q3 GDP Third Estimate and the December close data, we now have an updated look at the popular "Buffett Indicator" -- the ratio of corporate equities to GDP. The current reading is 206.6%, down from 212.7% the previous quarter.
The Long and Winding Road That Leads to ‘Normal’
In our Q3 market commentary, we described the primary economic fears behind a lackluster and trendless market.
December 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.
December Producer Price Index: Final Demand Up 9.7% YoY
This morning's release of the December Producer Price Index (PPI) for Finished Goods was down 0.5% month-over-month seasonally adjusted, down from a 1.1% increase last month. It is at 12.4% year-over-year, down from 13.6% last month, on a non-seasonally adjusted basis. Core Finished Goods (less food and energy) came in at 0.6% MoM, unchanged from the previous month and is up 6.5% YoY NSA. The December PPI for Final Demand was at 0.2% month-over-month seasonally adjusted, down from a 1.0% increase last month. Investing.com MoM consensus forecasts for Final Demand were for 0.4% headline and 0.5% core.
The Year Of Living Dangerously
2021 is now in the rear-view mirror and I believe that future financial historians may regard it as the year of peak speculation.
As Inflation Soars, the Fed Needs to Keep Its Head
Investors expect the Fed’s bond-buying program to be promptly wound down and have calmly penciled in four increases in interest rates this year, starting in March.
Smaller Gain in U.S. Producer Prices Is Hint of Cooler Inflation
Prices paid to U.S. producers decelerated in December as two key drivers of inflation in 2021 -- food and energy -- declined from a month earlier, representing a respite in the recent trend of sizable increases.
Demographic Trends for the 50-and-Older Work Force
Note: This commentary has been updated with the latest numbers from the latest Employment Report for November. Consider: Today nearly one in three of the 65-69 cohort and one in five of the 70-74 cohort are in the labor force.
‘Great Retirement’ in U.S. Is Driven by Older Female Baby Boomers
The surge in U.S. retirements during the Covid-19 pandemic was led by older White women without a college education, according to research by the St. Louis Federal Reserve.
ESG Study Shared With SEC Reveals Fund Labels Are Often Useless
Investing in ESG funds is like trying to navigate “the Wild West” as both regulations and enforcement fall short, according to Andrew Behar, the chief executive of As You Sow.
The Civilian Labor Force, Unemployment Claims and the Business Cycle
What does the ratio of unemployment claims tell us about where we are in the business cycle and recession risk?
Components of the CPI: December 2021
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 Fed’s Policy Tightening Plan: A One-Two Punch
The Federal Reserve dealt the bond market a sharp body blow on January 5th with the release of the minutes of its last Federal Open Market Committee (FOMC) policy meeting in December 2021.
Inflation Is Here! What Now?
Inflation is rising rapidly, not an unexpected outcome given governments’ pandemic policy response of ballooning deficits and soaring government debt.
Gundlach’s 2022 Forecast: Equities are Expensive but Cheap Relative to Bonds
Monetary policy has driven U.S. stock prices to excessive valuations, according to Jeffrey Gundlach. But they remain cheap relative to bonds.
Four Mega-Trends Shaping the 2022 Outlook and Beyond
The global macro environment is ripe for EM assets outperformance as a combination of stronger growth in China, the end of exceptionalism in the US and less uncertainty on US interest rates, lead to a strong backdrop for EM assets.
A Financial Planning Failure
The son of a terminally ill father consulted me recently. He was in dire emotional straits. If you had been his advisor, would his outcome have been better?
Consumer Price Index: December Headline at 7.04%
The Bureau of Labor Statistics released the December Consumer Price Index data this morning. The year-over-year non-seasonally adjusted Headline CPI came in at 7.04%, up from 6.81% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 5.45%, up from 4.93% the previous month and is above the Fed's 2% PCE target.
Should Advisors Be Therapists and Life Coaches?
I find it difficult to act as a social worker. I’ve no background in psychology. I’ve no skills to help warring couples find their bliss and agree on a center point when they have differing opinions.