Join the experts at Core Alternative Capital and VettaFi as they discuss a distinct US large cap strategy that seeks to actively balance downside risk with a disciplined options strategy.
The latest Underlying Inflation Gauge full data set for February is 4.8% while the prices-only measure is 3.9%. Current Headline CPI is now 6.0% and Core CPI is 5.5%.
To help understand the current market volatility arising from the collapse of banks in the United States and Europe, Head of Franklin Templeton Institute Stephen Dover provides his answers to three crucial questions.
Stocks fell and volatility rose this morning as banking sector worries persist.
February's new orders for manufactured durable goods came in lower than expected at $268.4B, a -1.0% decline from last month compared with the Investing.com 0.6% estimate. The series is up 2.2% year-over-year (YoY), the smallest yearly increase since September 2020. If we exclude transportation, "core" durable goods were unchanged from last month, worse than the Investing.com 0.2% estimate, and up 1.7% YoY.
Lower interest rates and more liquidity are the keys to boosting confidence in the financial sector, but they impede the Fed's ability to fight inflation.
The latest Kansas City Fed Manufacturing Survey composite index came in at 0, unchanged from last month's figure. The future outlook came in at 3, up 2 from last month.
This morning's release of the February new home sales from the Census Bureau came in at 640K, up 1.1% month-over-month from a revised 633K in January. This is below the Investing.com forecast of 650K however it is the highest amount of monthly sales in the last 6 months. and above the Investing.com forecast of 620K. The median home price is now at $438,200, up $11.7K from January on a nominal basis.
The Fed raised short-term rates by another 25 basis points (bp) today and made no changes to the expected peak for short-term rates later this year.
The latest price of home heating oil nationwide dropped to its lowest price of the year at $4.13. The current price is down 5 cents from last week and down 76 cents compared to one year ago.
Income-seeking investors are accustomed to casting wide nets after years of low yields.
Silicon Valley Bank was a “vital cog” in the private market ecosystem, which leads to many questions—and opportunities—across the alternative investments landscape.
Both the leading indicators of growth and liquidity continue to suggest growth will slow as 2023 progresses.
I am drained having my colleagues and team members come to me with problems because of their frustration with my company.
Easing financial conditions globally have made Morgan Stanley “outright bullish” on growth stocks in Asia and emerging markets versus their value peers.
As of March 20, the price of regular and premium gas were down 3 cents and 4 cents from the previous week, respectively. According to GasBuddy.com, Hawaii has the highest average price for regular at $4.81 and Oklahoma has the cheapest at $2.89. The WTIC end-of-day spot price for crude oil closed at $67.82 and is down 9.3% from last week.
Some of the world’s biggest investors are looking beyond interest-rate hikes, bank failures and the threat of recession to one of the greatest fears of all money managers — missing out on the next big rally.
We have been reminding everyone that we believe we are unwinding a financial euphoria episode that Charlie Munger called the biggest of his career, “because of the totality of it.”
Banking turmoil continues to rattle the global markets and investor confidence.
US officials are studying ways they might temporarily expand Federal Deposit Insurance Corp. coverage to all deposits, a move sought by a coalition of banks arguing that it’s needed to head off a potential financial crisis.
CIO Larry Adam outlines the positive events that are outweighing negative developments and looks at dynamics to focus on in the week ahead.
This morning's release of the February existing home sales showed that sales surged to a seasonally adjusted annual rate of 4.58 million units from the previous month's 4.00 million, ending the 12-month streak of monthly declines. The latest number represents a 14.5% month-over-month increase, its largest since July 2020 and well above the Investing.com forecast of 5%. With that being said, existing home sales are down 22.6% compared to one year ago.
The simplest thing that can be said about current financial market and banking conditions is this: the unwinding of this Fed-induced, yield-seeking speculative bubble is proceeding as one would expect, and it’s not over by a longshot.
The national news cycle has careened from one extraordinary and alarming story to the next.
Five of eight indexes on our world watch list posted gains through March 20, 2023. France's CAC 40 finished in the top spot with a YTD gain of 8.33%. Germany's DAXK finished second with a YTD gain of 6.94%, and China's Shanghai moved to third with a YTD gain of 4.71%. India's BSE SENSEX finished last with a loss of 5.28% YTD.
Portfolio Manager Andy Acker explains why the healthcare sector could offer an attractive combination of defense and growth in today’s market.
Central banks endlessly fascinate me.
Franklin Templeton Investment Solutions explores the shared macro concerns that set the stage for the recent banking crisis, its ripple effects on the broader economy and implications for multi-asset investing.
The strongest force standing in the way of nuclear energy is the antiquated, irrational fear of it.
New research confirms the valuable role that short sellers play in correcting the valuations of overpriced stocks.
A TIPS is risky in the short term and riskless in the long run, which is precisely the opposite of, and complementary to, a T-bill, which is riskless in the short term but, because of reinvestment rate volatility, risky in the long run.
For years I’ve used a sandpile metaphor to describe complex systems like banking. Keep dropping grains of sand long enough and you will eventually trigger an avalanche.
Sixty-six million Americans currently receive monthly benefits from Social Security, which, if nothing changes, is expected to be insolvent by 2035 at the latest. It’s time for Americans to take a greater role in their own retirement planning.
Fears of bank runs precipitating a broader financial crisis helped spark a surge in bullion buying this week.
The full story of SVB is still unfolding, but we offer some initial reactions.
My “five-step investment process” provides an ongoing systematic framework for making portfolio decisions, and further incorporating financial planning and tax considerations into overall portfolio construction.
The yield on the 10-year note ended March 17, 2023 at 3.39%, the two-year note ended at 3.81%, and the 30-year at 3.60%.
I've updated this series to include the February release of the consumer price index as the deflator and the monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $48,172, down 8.2% from 50 years ago. Hourly earnings are below their all-time high after adjusting for inflation.
The key to if — or when — the US economy falls into recession will depend on how the latest turmoil in the banking sector spills over to Main Street.
Following this week’s banking crisis and the return of government bailouts, investors and traders alike are once again calling for a Fed pivot.
The latest Conference Board Leading Economic Index (LEI) for February was down 0.3% to 110.0 from January's final figure of 110.3, marking the 11th consecutive MoM decline. Today's reading was consistent with the Investing.com forecast.
Portfolio manager Peeyush Mittal and research analyst Swagato Ghosh say India has a fiscal playbook to chart a path of stability and growth.
In a dovish move, the central bank raises rates by half a point.
Month-over-month nominal retail sales in January were down 0.4% and up 5.4% YoY. However after adjusting for inflation, real retail sales decreased by 0.8% and were down 0.6% YoY.
February's ZHVI came in at $327,514, practically unchanged from January and up 6.76% from February 2022. After adjusting for inflation, the real figures are -0.71% month-over-month and -1.16% year-over-year.
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 latest manufacturing index came in at -23.2, up 1.1 from last month's -24.3, marking the index's seventh negative reading in a row.. The three-month moving average is now at -18.8, down from last month and the lowest since June 2020. The six-month outlook was down 9.7 points to -8.0. Since this is a diffusion index, negative readings indicate contraction, positive ones indicate expansion.
Although the dust has not yet settled, we think it’s a good time to pause and consider the implications of the recent Silicon Valley Bank (SVB) collapse.
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for February new residential housing starts. The latest reading of 1.450M was above the Investing.com forecast of 1.310M and is a 9.8% increase from the previous month's revised figure of 1.321M. Housing starts are down 18.4% compared to this time last year.
The banking earthquake is sending shockwaves through the financial markets. The financial and economic aftershocks, soon to follow, are underappreciated and will prove worse than the earthquake.
The Consumer Price Index for Urban Consumers (CPI-U) released for February puts the year-over-year inflation rate at 6.04%. 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 2.55%.
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. The latest reading came in better than expected (40) at 44, up 2 from last month, and is the index's highest reading in the last six months.
This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions dropped 18.8 points from last month to -24.6. This morning's reading was far below the Investing.com forecast of -8.0. This month's reading marks the fourth consecutive month in contraction territory.
The Census Bureau's Advance Retail Sales Report for February was released this morning. Headline sales came in slightly below forecast at -0.4% month-over-month. Core sales (ex Autos) came in at -0.1% month-over-month, in line with the forecast.
The failure of Silicon Valley Bank raises questions for Fed policy and economic growth.
I meet many advisors who prioritize work over family and productivity over relationships. There’s a better way.
101 Lesson of Structural growth versus recovery growth investing.
China can match the US in artificial intelligence thanks to the expertise of companies from Alibaba to Baidu, joining a global tech transformation that will dwarf the mobile revolution, according to industry pioneer Kai-Fu Lee.
The extreme “tail” risk ahead may be disorienting.
The morning's release of the February Producer Price Index (PPI) for final demand was at -0.1% month-over-month seasonally adjusted, down from last month's 0.3% increase. Core PPI (excluding food and energy) was at 0.0% month-over-month, down from last month's 0.4% increase. Both headline and core PPI came in lower than their respective Investing.com forecasts, with headline expectations at 0.3% and core expectations at 0.4%.
The labor force participation rate (LFPR) is a simple computation: You take the civilian labor force (people age 16 and over employed or seeking employment) and divide it by the civilian non-institutional population (those 16 and over not in the military and or committed to an institution). As of February, the labor force participation rate is at 62.5%, up slightly from last month.
We are currently seeing some of the highest 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 new SECURE Act 2.0 (Setting Every Community Up for Retirement Enhancement Act) seeks to make it easier for U.S. taxpayers to save for retirement and expands access to retirement plans.
I've updated our monthly workforceanalysis to include the latest employment report for February. The unemployment rate increased to 3.6%, and the number of new non-farm jobs (a relatively volatile number subject to extensive revisions) came in at 311K.
Regulators' prompt response and the creation of a new lending facility should limit broader market fallout from recent bank failures, notes Chief Investment Officer Larry Adam.
The headline number for February came in at 90.9, up 0.6 from the previous month, but still below the series average of 98.2. The index is at the 9th percentile in this series.
The Bureau of Labor Statistics released the February Consumer Price Index data this morning. The year-over-year Headline CPI came in as expected at 6.0%, down from 6.4% the previous month (n.s.a). Year-over-year Core CPI (ex Food and Energy) also came in as expected at 5.5%, down from 5.6% the previous month (n.s.a).
Why don’t sellers of services transparently list one price that includes all fees?
Let's take a close look at February's employment report numbers on Full and Part-Time Employment.
Multiple jobholders account for 5.0% of civilian employment. The survey captures data for four subcategories of the multi-job workforce, the relative sizes of which we've illustrated in a pie chart.
The latest monthly employment report showed a gain of 311,000 nonfarm jobs, which consists of a gain of 291,000 service-providing jobs and a gain of 20,000 goods-producing jobs.
My research confirms what academic theory predicts: There has been no historical alpha among dividend-paying stocks, including those with a history of increasing dividends. Investors are better served by “tilting” allocations to factors that have historically outperformed (e.g., value).
US authorities took extraordinary measures to shore up confidence in the financial system after the collapse of Silicon Valley Bank, introducing a new backstop for banks that Federal Reserve officials said was big enough to protect the entire nation’s deposits.
Warren Buffett defended stock buybacks in Berkshire Hathaway’s annual letter, pushing back on those railing against the practice he believes benefits all shareholders.
If a picture is worth a thousand words, this will be the “longest” letter I’ve sent you in a while, as there are quite a few pictures. It may also be the most wide-ranging.
Like face recognition, artificial intelligence (AI), mRNA vaccines and other modern technology, Bitcoin is a key component of the ongoing, rapidly accelerating digital transformation.
Greg Becker sat in a red armchair at an invite-only conference in Los Angeles last week, legs crossed, one hand cutting through air.
Review the latest portfolio strategy commentary from Mike Gibbs, managing director of Equity Portfolio and Technical Strategy.
Head of Portfolio Strategy David Dali explains why it’s an opportune time to add emerging-market exposure.
When weighing the decision to move to the RIA model, advisors must consider the catastrophic consequences to them if they are terminated by their broker-dealer.
Having raised rates by over 4% over a short period and in a very leveraged economy, the Fed no longer has the big stick it used to have. Therefore, speaking loudly with hawkish rhetoric and narrative must become a priority.
Some money secrets within a couples are matters of privacy or convenience, while others cross a line into financial infidelity.
This is a couple months past its release, but the latest Fed balance sheet shows a total net worth for households and nonprofit organizations that is 149% above the 2009 trough. The nominal Q4 2022 net worth is down up 2.0% from the previous quarter and down 2.7% year-over-year.
Pop Quiz! Without recourse to your text, your notes, or a Google search, what line item is the largest asset in Uncle Sam's financial accounts?
Investors focusing on climate change often overlook Chinese firms.
The problem with speculation is that there’s usually a gap between the underlying risk and the inevitable outcome.
The long-term outlook for stocks remains questionable, as most of my leading indicators of risk assets suggest sub-par performance over the next year or so.
Given the topsy-turvy nature of the market thus far in 2023, it remains crucial for investors to know what they are buying—especially as it relates to growth, value, and quality.
Soft landing or hard landing? Recession or no recession? In my mind, there is no question more important.
There were many good things to think about from Warren Buffett’s letter to shareholders which came out recently. In this piece, we’d like to drill down on two subjects that Buffett highlighted.
Small Cap
Amid Uncertain Forecasts, Consider a Core Strategy That Has Thrived in Both Bull and Bear Markets
Join the experts at Core Alternative Capital and VettaFi as they discuss a distinct US large cap strategy that seeks to actively balance downside risk with a disciplined options strategy.
Underlying Inflation Gauge: February Update
The latest Underlying Inflation Gauge full data set for February is 4.8% while the prices-only measure is 3.9%. Current Headline CPI is now 6.0% and Core CPI is 5.5%.
The Crucial Questions
To help understand the current market volatility arising from the collapse of banks in the United States and Europe, Head of Franklin Templeton Institute Stephen Dover provides his answers to three crucial questions.
Markets Again Under Pressure
Stocks fell and volatility rose this morning as banking sector worries persist.
Durable Goods Orders Down 1.0% in February, Worse Than Forecast
February's new orders for manufactured durable goods came in lower than expected at $268.4B, a -1.0% decline from last month compared with the Investing.com 0.6% estimate. The series is up 2.2% year-over-year (YoY), the smallest yearly increase since September 2020. If we exclude transportation, "core" durable goods were unchanged from last month, worse than the Investing.com 0.2% estimate, and up 1.7% YoY.
Phase Two of the Fed Follies
Lower interest rates and more liquidity are the keys to boosting confidence in the financial sector, but they impede the Fed's ability to fight inflation.
Kansas City Fed Manufacturing Survey: Activity Stayed Flat
The latest Kansas City Fed Manufacturing Survey composite index came in at 0, unchanged from last month's figure. The future outlook came in at 3, up 2 from last month.
New Home Sales Up for Third Straight Month
This morning's release of the February new home sales from the Census Bureau came in at 640K, up 1.1% month-over-month from a revised 633K in January. This is below the Investing.com forecast of 650K however it is the highest amount of monthly sales in the last 6 months. and above the Investing.com forecast of 620K. The median home price is now at $438,200, up $11.7K from January on a nominal basis.
Research Reports
The Fed raised short-term rates by another 25 basis points (bp) today and made no changes to the expected peak for short-term rates later this year.
Weekly Heating Oil Prices: Down 5 Cents
The latest price of home heating oil nationwide dropped to its lowest price of the year at $4.13. The current price is down 5 cents from last week and down 76 cents compared to one year ago.
Taming Biases in High-Dividend Equity Strategies
Income-seeking investors are accustomed to casting wide nets after years of low yields.
Alternative Investments Outlook Post-SVB
Silicon Valley Bank was a “vital cog” in the private market ecosystem, which leads to many questions—and opportunities—across the alternative investments landscape.
The Growth Slowdown Is Not Over Yet
Both the leading indicators of growth and liquidity continue to suggest growth will slow as 2023 progresses.
Is My Company Really That Bad?
I am drained having my colleagues and team members come to me with problems because of their frustration with my company.
Morgan Stanley Turns ‘Outright Bullish’ on Asian Growth Stocks
Easing financial conditions globally have made Morgan Stanley “outright bullish” on growth stocks in Asia and emerging markets versus their value peers.
Weekly Gasoline Price Update: WTIC Down 9.3% from Last Week
As of March 20, the price of regular and premium gas were down 3 cents and 4 cents from the previous week, respectively. According to GasBuddy.com, Hawaii has the highest average price for regular at $4.81 and Oklahoma has the cheapest at $2.89. The WTIC end-of-day spot price for crude oil closed at $67.82 and is down 9.3% from last week.
Biggest Fear for Trillion-Dollar Funds Is Missing Next Rally
Some of the world’s biggest investors are looking beyond interest-rate hikes, bank failures and the threat of recession to one of the greatest fears of all money managers — missing out on the next big rally.
Funding Unprofitable Growth
We have been reminding everyone that we believe we are unwinding a financial euphoria episode that Charlie Munger called the biggest of his career, “because of the totality of it.”
Banking, Inflation, and the Fed: Where Do We Go From Here?
Banking turmoil continues to rattle the global markets and investor confidence.
US Studies Ways to Insure All Bank Deposits If Crisis Grows
US officials are studying ways they might temporarily expand Federal Deposit Insurance Corp. coverage to all deposits, a move sought by a coalition of banks arguing that it’s needed to head off a potential financial crisis.
Incremental Progress Emerging in the Banking Sector Fallout
CIO Larry Adam outlines the positive events that are outweighing negative developments and looks at dynamics to focus on in the week ahead.
Existing-Home Sales Surge in February, Ending 12-Month Streak of Declines
This morning's release of the February existing home sales showed that sales surged to a seasonally adjusted annual rate of 4.58 million units from the previous month's 4.00 million, ending the 12-month streak of monthly declines. The latest number represents a 14.5% month-over-month increase, its largest since July 2020 and well above the Investing.com forecast of 5%. With that being said, existing home sales are down 22.6% compared to one year ago.
Edge of the Edge
The simplest thing that can be said about current financial market and banking conditions is this: the unwinding of this Fed-induced, yield-seeking speculative bubble is proceeding as one would expect, and it’s not over by a longshot.
U.S. Banking System Faces Worsening Crisis in Confidence
The national news cycle has careened from one extraordinary and alarming story to the next.
World Markets Update: March 20, 2023
Five of eight indexes on our world watch list posted gains through March 20, 2023. France's CAC 40 finished in the top spot with a YTD gain of 8.33%. Germany's DAXK finished second with a YTD gain of 6.94%, and China's Shanghai moved to third with a YTD gain of 4.71%. India's BSE SENSEX finished last with a loss of 5.28% YTD.
Two Sides of Healthcare, One Strong Investment Case
Portfolio Manager Andy Acker explains why the healthcare sector could offer an attractive combination of defense and growth in today’s market.
The Fed’s Got Inflation Backwards
Central banks endlessly fascinate me.
A Multi-Asset Perspective on Recent Bank Turmoil: Don’t Lose Sight of the Macro Story
Franklin Templeton Investment Solutions explores the shared macro concerns that set the stage for the recent banking crisis, its ripple effects on the broader economy and implications for multi-asset investing.
Lies, Damn Lies, and Visions of Nuclear Catastrophe
The strongest force standing in the way of nuclear energy is the antiquated, irrational fear of it.
New Evidence that Short Sellers Correct Overpriced Stocks
New research confirms the valuable role that short sellers play in correcting the valuations of overpriced stocks.
Riskless at Age 104
A TIPS is risky in the short term and riskless in the long run, which is precisely the opposite of, and complementary to, a T-bill, which is riskless in the short term but, because of reinvestment rate volatility, risky in the long run.
Another Unstable Finger
For years I’ve used a sandpile metaphor to describe complex systems like banking. Keep dropping grains of sand long enough and you will eventually trigger an avalanche.
Pension Reform Showdown: Will The U.S. Follow France’s Bold Retirement Age Changes?
Sixty-six million Americans currently receive monthly benefits from Social Security, which, if nothing changes, is expected to be insolvent by 2035 at the latest. It’s time for Americans to take a greater role in their own retirement planning.
Could Bank Runs Lead to a Run on Gold & Silver?
Fears of bank runs precipitating a broader financial crisis helped spark a surge in bullion buying this week.
Silicon Valley: The Consequences of a Bank's Failure
The full story of SVB is still unfolding, but we offer some initial reactions.
The Professor's Portfolio
My “five-step investment process” provides an ongoing systematic framework for making portfolio decisions, and further incorporating financial planning and tax considerations into overall portfolio construction.
Treasury Yields Snapshot: March 17, 2023
The yield on the 10-year note ended March 17, 2023 at 3.39%, the two-year note ended at 3.81%, and the 30-year at 3.60%.
Middle-Class Hourly Wages as of February 2023
I've updated this series to include the February release of the consumer price index as the deflator and the monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $48,172, down 8.2% from 50 years ago. Hourly earnings are below their all-time high after adjusting for inflation.
Where to Look for Signs Financial Turmoil Is Impacting the US Economy
The key to if — or when — the US economy falls into recession will depend on how the latest turmoil in the banking sector spills over to Main Street.
Don’t Expect a Fed Pivot Just Yet
Following this week’s banking crisis and the return of government bailouts, investors and traders alike are once again calling for a Fed pivot.
CB LEI: Down 0.3% in February, Still Pointing to Risk of Recession
The latest Conference Board Leading Economic Index (LEI) for February was down 0.3% to 110.0 from January's final figure of 110.3, marking the 11th consecutive MoM decline. Today's reading was consistent with the Investing.com forecast.
India’s Balancing Act
Portfolio manager Peeyush Mittal and research analyst Swagato Ghosh say India has a fiscal playbook to chart a path of stability and growth.
The ECB Hikes Rates Amid Financial Market Volatility
In a dovish move, the central bank raises rates by half a point.
The Big Four: February Real Retail Sales Down 0.8%
Month-over-month nominal retail sales in January were down 0.4% and up 5.4% YoY. However after adjusting for inflation, real retail sales decreased by 0.8% and were down 0.6% YoY.
Zillow Home Value Index: February Update
February's ZHVI came in at $327,514, practically unchanged from January and up 6.76% from February 2022. After adjusting for inflation, the real figures are -0.71% month-over-month and -1.16% year-over-year.
Inside the Consumer Price Index: February 2023
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.
Philly Fed Manufacturing Index: Activity Declines for Seventh Straight Month
The latest manufacturing index came in at -23.2, up 1.1 from last month's -24.3, marking the index's seventh negative reading in a row.. The three-month moving average is now at -18.8, down from last month and the lowest since June 2020. The six-month outlook was down 9.7 points to -8.0. Since this is a diffusion index, negative readings indicate contraction, positive ones indicate expansion.
SVB Failure: The Impact on Private Credit
Although the dust has not yet settled, we think it’s a good time to pause and consider the implications of the recent Silicon Valley Bank (SVB) collapse.
Housing Starts Jump 9.8% in February
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for February new residential housing starts. The latest reading of 1.450M was above the Investing.com forecast of 1.310M and is a 9.8% increase from the previous month's revised figure of 1.321M. Housing starts are down 18.4% compared to this time last year.
The Aftershock That Will Follow Silicon Valley Bank
The banking earthquake is sending shockwaves through the financial markets. The financial and economic aftershocks, soon to follow, are underappreciated and will prove worse than the earthquake.
Inflation Since 1872: A Long-Term Look at the CPI
The Consumer Price Index for Urban Consumers (CPI-U) released for February puts the year-over-year inflation rate at 6.04%. 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 2.55%.
NAHB Housing Market Index: Confidence Edges Higher but Future Outlook Uncertain
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. The latest reading came in better than expected (40) at 44, up 2 from last month, and is the index's highest reading in the last six months.
Empire State Manufacturing Survey: Contraction Continues in March
This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions dropped 18.8 points from last month to -24.6. This morning's reading was far below the Investing.com forecast of -8.0. This month's reading marks the fourth consecutive month in contraction territory.
Retail Sales Dip 0.4% in February After Strong January
The Census Bureau's Advance Retail Sales Report for February was released this morning. Headline sales came in slightly below forecast at -0.4% month-over-month. Core sales (ex Autos) came in at -0.1% month-over-month, in line with the forecast.
Bank Failures and the Fed
The failure of Silicon Valley Bank raises questions for Fed policy and economic growth.
Work Less and Be More Productive
I meet many advisors who prioritize work over family and productivity over relationships. There’s a better way.
Chinese Internet – the Boom and Bust Story
101 Lesson of Structural growth versus recovery growth investing.
China Can Quickly Catch Up to US AI, Says Venture Veteran
China can match the US in artificial intelligence thanks to the expertise of companies from Alibaba to Baidu, joining a global tech transformation that will dwarf the mobile revolution, according to industry pioneer Kai-Fu Lee.
Headed For The Tail
The extreme “tail” risk ahead may be disorienting.
Producer Price Index: February Headline at 4.6%, Down from January
The morning's release of the February Producer Price Index (PPI) for final demand was at -0.1% month-over-month seasonally adjusted, down from last month's 0.3% increase. Core PPI (excluding food and energy) was at 0.0% month-over-month, down from last month's 0.4% increase. Both headline and core PPI came in lower than their respective Investing.com forecasts, with headline expectations at 0.3% and core expectations at 0.4%.
Long-Term Trends in Employment by Age Group
The labor force participation rate (LFPR) is a simple computation: You take the civilian labor force (people age 16 and over employed or seeking employment) and divide it by the civilian non-institutional population (those 16 and over not in the military and or committed to an institution). As of February, the labor force participation rate is at 62.5%, up slightly from last month.
February Inflation: The Components
We are currently seeing some of the highest 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.
SECURE 2.0: Top 5 Items to Discuss with Your Clients
The new SECURE Act 2.0 (Setting Every Community Up for Retirement Enhancement Act) seeks to make it easier for U.S. taxpayers to save for retirement and expands access to retirement plans.
U.S. Workforce: February 2023 Update
I've updated our monthly workforceanalysis to include the latest employment report for February. The unemployment rate increased to 3.6%, and the number of new non-farm jobs (a relatively volatile number subject to extensive revisions) came in at 311K.
Recent Bank Failures a Potential Game-Changer for The Fed
Regulators' prompt response and the creation of a new lending facility should limit broader market fallout from recent bank failures, notes Chief Investment Officer Larry Adam.
NFIB Small Business Survey: Expectations for Better Business Conditions Remain Low
The headline number for February came in at 90.9, up 0.6 from the previous month, but still below the series average of 98.2. The index is at the 9th percentile in this series.
Consumer Price Index: February Headline at 6.0%, Down from January
The Bureau of Labor Statistics released the February Consumer Price Index data this morning. The year-over-year Headline CPI came in as expected at 6.0%, down from 6.4% the previous month (n.s.a). Year-over-year Core CPI (ex Food and Energy) also came in as expected at 5.5%, down from 5.6% the previous month (n.s.a).
How Clients Can Guard Against Junk Fees
Why don’t sellers of services transparently list one price that includes all fees?
Full-time and Part-time Employment: A Deeper Look
Let's take a close look at February's employment report numbers on Full and Part-Time Employment.
Multiple Jobholders are 5% of All Employed
Multiple jobholders account for 5.0% of civilian employment. The survey captures data for four subcategories of the multi-job workforce, the relative sizes of which we've illustrated in a pie chart.
February Employment: Services- versus Goods-Producing Jobs
The latest monthly employment report showed a gain of 311,000 nonfarm jobs, which consists of a gain of 291,000 service-providing jobs and a gain of 20,000 goods-producing jobs.
The Evidence Against Favoring Dividend-Paying Stocks
My research confirms what academic theory predicts: There has been no historical alpha among dividend-paying stocks, including those with a history of increasing dividends. Investors are better served by “tilting” allocations to factors that have historically outperformed (e.g., value).
Fed’s New Backstop Shields Banks From $300 Billion of Losses
US authorities took extraordinary measures to shore up confidence in the financial system after the collapse of Silicon Valley Bank, introducing a new backstop for banks that Federal Reserve officials said was big enough to protect the entire nation’s deposits.
Buffett On Buybacks
Warren Buffett defended stock buybacks in Berkshire Hathaway’s annual letter, pushing back on those railing against the practice he believes benefits all shareholders.
Thousand-Word Equivalents
If a picture is worth a thousand words, this will be the “longest” letter I’ve sent you in a while, as there are quite a few pictures. It may also be the most wide-ranging.
Bitcoin Is A Key Component Of The Great Digital Transformation
Like face recognition, artificial intelligence (AI), mRNA vaccines and other modern technology, Bitcoin is a key component of the ongoing, rapidly accelerating digital transformation.
SVB’s 44-Hour Collapse Was Rooted in Treasury Bets During Pandemic
Greg Becker sat in a red armchair at an invite-only conference in Los Angeles last week, legs crossed, one hand cutting through air.
Weekly Market Guide
Review the latest portfolio strategy commentary from Mike Gibbs, managing director of Equity Portfolio and Technical Strategy.
Add Emerging Market Strength in Global Weakness
Head of Portfolio Strategy David Dali explains why it’s an opportune time to add emerging-market exposure.
Ask Brad: What if My Broker-Dealer Terminates Me?
When weighing the decision to move to the RIA model, advisors must consider the catastrophic consequences to them if they are terminated by their broker-dealer.
The Fed Must Speak Loudly Because It Carries a Small Stick
Having raised rates by over 4% over a short period and in a very leveraged economy, the Fed no longer has the big stick it used to have. Therefore, speaking loudly with hawkish rhetoric and narrative must become a priority.
When Does Money Secrecy Become Financial Infidelity?
Some money secrets within a couples are matters of privacy or convenience, while others cross a line into financial infidelity.
Q4 2022 Household Net Worth: The "Real" Story
This is a couple months past its release, but the latest Fed balance sheet shows a total net worth for households and nonprofit organizations that is 149% above the 2009 trough. The nominal Q4 2022 net worth is down up 2.0% from the previous quarter and down 2.7% year-over-year.
The Fed's Financial Accounts: What Are Uncle Sam's Largest Assets?
Pop Quiz! Without recourse to your text, your notes, or a Google search, what line item is the largest asset in Uncle Sam's financial accounts?
China’s Green Enablers Deserve a Place in Equity Funds
Investors focusing on climate change often overlook Chinese firms.
Pushing Your Luck
The problem with speculation is that there’s usually a gap between the underlying risk and the inevitable outcome.
Is Now The Time To Buy Stocks?
The long-term outlook for stocks remains questionable, as most of my leading indicators of risk assets suggest sub-par performance over the next year or so.
Caveat Emptor: Important Market Shifts Underway
Given the topsy-turvy nature of the market thus far in 2023, it remains crucial for investors to know what they are buying—especially as it relates to growth, value, and quality.
Getting Ahead of Ourselves
Soft landing or hard landing? Recession or no recession? In my mind, there is no question more important.
Musings from Buffett’s Letter
There were many good things to think about from Warren Buffett’s letter to shareholders which came out recently. In this piece, we’d like to drill down on two subjects that Buffett highlighted.