This is a couple months past its release, but the latest Fed balance sheet shows that total household and nonprofit organizations net worth is 151% above the 2009 trough. The nominal Q1 2023 net worth is up 2.1% from the previous quarter and down 2.5% 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?
I've updated our monthly workforce analysis to include the latest employment report for May. The unemployment rate rose to 3.7% and the number of new non-farm jobs (a relatively volatile number subject to extensive revisions) came in at 339K.
Let's take a close look at May's employment report numbers on Full and Part-Time Employment. The latest data shows that 83.6% of total employed workers are full-time (35+ hours) and 16.4% of total employed workers are part-time (<35 hours).
Multiple jobholders account for 4.8% 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 339,000 nonfarm jobs were added in May. An industry breakdown of that number shows a gain of 313,000 service-providing jobs and a gain of 26,000 goods-producing jobs.
The U.S. international trade in goods and services, also known as the FT-900, is published monthly by the Bureau of Economic Analysis with data going back to 1992 and details U.S. exports and imports of goods and services. In April, the trade deficit expanded by 23% to $74.60B. This is the largest gap the trade balance has seen in the last 6 months. The latest reading was smaller than the -$75.20B forecast.
As of June 5, the price of regular and premium gas decreased by 3 cents and 2 cents, respectively, from the previous week. According to GasBuddy.com, California has the highest average price for regular at $4.79 and Mississippi has the cheapest at $2.93. The WTIC end-of-day spot price for crude oil closed at $72.15 and up 3.9% from last week.
Too many advisors jump into surge poorly prepared to deliver massive value to their clients. Here are five common mistakes and how to avoid them.
At of the start of this year, Rick Pitcairn took on a new position as the chief global strategist at Pitcairn, a 100-year-old multi-family office with $7bn in client assets. In this position, he is focusing on macro-economic trends and is searching for new global initiatives that will add to the firm’s growth.
Rick recently journeyed to India where he met with some of the wealthiest local families to discuss multi-generational wealth transfer. He saw that people all around the world want the same things, including economic security and a safe environment to raise their children. But the investing and business environments differ significantly. Rick knows that U.S. investors have a home bias, but he saw substantial economic growth is happening outside our borders. Rick is here to discuss if an international allocation appropriate or too risky.
Seven of the eight indexes on our world watch list posted gains through June 5, 2023. Nikkei 225 continued to climb, finishing in the top spot with a YTD gain of 23.46%. The U.S.'s S&P 500 finished in second with a YTD gain of 11.76% while Germany's DAXK jumped into third with a YTD gain of 9.09%.
The yield on the 10-year note ended June 2, 2023 at 3.69%, the 2-year note ended at 4.50%, and the 30-year at 3.88%.
The moving average for the light vehicle sales per capita series peaked in August 1978. Almost 45 years later, it is down 40.5% from that peak.
Provisions of the SECURE Act may require advisors to revisit estate plans for clients who aren't utilizing their RMDs or who have qualified assets intended for the next generation. Some clients may benefit from strategies for using life insurance to maximize the value of qualified assets while minimizing their tax burden.
Stay informed and proactive to help clients meet their estate planning goals. Learn how to offset the taxes on qualified assets, structure investments for optimal distribution and navigate changes to inherited IRAs and new RMD requirements under the SECURE Act 2.0."
As of May 31, 2023, the 10-year note was 312 basis points above its historic closing low of 0.52% reached on August 4, 2020.
The Institute for Supply Management (ISM) manufacturing purchasing managers index (PMI) fell to 46.9 in May. The lates figure marks the seventh consecutive month the index has been in contraction territory after a 29-month period of growth dating back to June 2020. The May reading was just below the forecast of 47.0.
The May S&P Global US Manufacturing PMI™ dropped for the first time in five months to 48.4. The latest figure moves the index back into contraction territory after a brief 1-month stint in expansion territory. The May reading is slightly below the forecast of 48.5.
Valid until the market close on June 30, 2023
The S&P 500 closed May with a monthly gain of 0.25%, after a gain of 1.46% in April. At this point, after close on the last day of the month, two of five Ivy portfolio ETFs — Vanguard Real Estate ETF (VNQ) and Invesco DB Commodity Index Tracking Fund (DBC) — are signaling "cash", unchanged from last month's final double "cash" signal.
Without understanding people – how they think and act, and what they believe – you can’t effectively help them, no matter how good you are at planning or asset allocation.
The BEA's core Personal Consumption Expenditures (PCE) Price Index for April, released last Friday, shows that core inflation continues to be well above the Federal Reserve's 2% long-term target at 4.7%. The April core Consumer Price Index (CPI) release was higher, at 5.5%. The Fed is on record as using core PCE data as its primary inflation gauge.
The latest Chicago Purchasing Manager's Index (Chicago Business Barometer) regressed to 40.4 in May from 48.6 in April. This is the ninth straight month in contraction territory. This reading comes in below the forecast of 47.0.
As the debt limit negotiations near resolution, the specter of a default recedes. But the lesson is that both sides were willing to play chicken with the train.
Five out of the 12 Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia. The May average of the five districts is -17.5, down from the previous month. This is the lowest monthly average in the last three years.
The Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for May. The latest general business activity index came in at -29.1, down 5.7 from last month. The general business activity index has declined each of the past four months and has been in contraction territory since May of last year.
The Conference Board's Consumer Confidence Index ® slipped to 102.3 in May from April's upwardly revised reading of 103.7. This month's reading was better than expected, exceeding the 99.0 forecast. The latest figure is the index's lowest reading in the past six months.
Travel on all roads and streets increased in March. The 12-month moving average was up month-over-month by 0.1% and was up 0.3% 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 0.0% MoM and down 0.8% YoY.
In March, S&P Case-Shiller Home Price Index revealed seasonally adjusted home prices for the benchmark 20-city index saw a 0.5% increase month-over-month (MoM) and a 1.2% decrease year-over-year (YoY). After adjusting for inflation, the MoM was reduced to 0.0% and the YoY was reduced to -8.5%.
The Federal Housing Finance Agency (FHFA) has released its U.S. house price index (HPI) for March. The index reached a record high last month, coming in at 398.0. U.S. house prices increased by 0.6% from the previous month. Year-over-year the index is up 3.6%. After adjusting for inflation, the real index is up 0.8% in March and up 0.2% year-over-year.
The Census Bureau has posted its advance report on new orders for durable goods for April. This series dates from 1992 and is not adjusted for either population growth or inflation. Let's review durable goods data with those two adjustments.
The second estimate for Q1 GDP came in at 1.3%, a decrease from 2.6% for the Q4 third estimate. With a per-capita adjustment, the headline number is lower at 0.8%, a decrease from 2.0% for the Q4 headline number.
We've updated our periodic look at the Philly Fed ADS Index which includes real GDP (Q1 2023 second estimate) and initial jobless claims through 5/20.
Personal income (excluding transfer receipts) rose 0.5% in April and is up 5.7% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, real personal income (excluding transfer receipts) was up 0.2% month-over-month and 1.2% year-over-year.
With the release of this morning's report on April'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 0.37% month-over-month change in disposable income comes to 0.00% when we adjust for inflation. The year-over-year metrics are 7.36% nominal and 2.87% real.
The BEA's Personal Income and Outlays report for April was published this morning by the Bureau of Economic Analysis. The latest headline PCE price index was up 0.4% month-over-month (MoM) and increased to 4.4% year-over-year (YoY). Core PCE was also up 0.4% monthly and rose to 4.7% year-over-year, still well above the Fed's 2% target rate.
New orders for manufactured durable goods came in better than expected in April at $283.02B. This is a 1.1% increase from last month and higher than the expected 1.1% decline. The series is up 4.2% year-over-year (YoY). If we exclude transportation, "core" durable goods were down 0.2% from last month and down 0.2% from last year.
Real gross domestic product (GDP) is comprised of four major subcomponents. In the Q1 GDP second estimate, two out of the four components made positive contributions, one component made negative contributions, while the remaining component had a neutral impact.
The latest Kansas City Fed Manufacturing Survey composite index came in at -1. This is an increase from last month's figure and better than the expected -5 reading. The future outlook came in at 2, down slightly from April.
The National Association of Realtors® (NAR) released the latest monthly data for its pending home sales index. The latest index remained at 78.9, representing a 0.0% change from last month, lower than the expected 0.5% increase. Pending home sales are down 20.3% compared to one year ago.
AI’s arrival will have an increasingly large impact on our lives. That includes investing and, especially, other aspects of financial planning.
Fifth district manufacturing deteriorated in May, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite manufacturing index is at -15 in May, down 5 from April. This month's reading is worse than the Investing.com forecast of -8 and is the fifth consecutive month the index has reported worsening conditions.
This morning's release of the April new home sales from the Census Bureau came in at 683K, up 4.1% month-over-month from a revised 656K in March. This is above the Investing.com forecast of 663K and the highest level in over a year. The median home price is now at $420,800, down $35K from March on a nominal basis.
Review the latest Weekly Headings by CIO Larry Adam.
A member of Putnam's Fixed Income team since 2007, Onsel Gulbiten analyzes macroeconomic issues, including inflation, interest rates, and policy developments.
Banks and financial institutions are big issuers of preferred securities, so the recent banking industry volatility has had an impact. Our guidance on preferreds is unchanged but with some caveats.
Negotiations among lawmakers in Washington, D.C., to raise the debt ceiling might trend in a more favorable direction.
The distinction between futures-based ETFs and crypto equity ETFs is clear when you look closely at the two. But even when examining them closely, it may be difficult to distinguish between the different types of blockchain/crypto equity ETFs because of similarities with fintech, metaverse, and Web3 concepts.
HNW Americans need to be prepared for every contingency, including Democrats winning a trifecta of POTUS and majorities in both houses of Congress.
Chief Economist Eugenio J. Alemán discusses current economic conditions.
We often talk about technology’s influence on the economy. After the Strategic Investment Conference, though, I’ve decided that isn’t strong enough. It’s more correct to say technology is the economy.
Although attendance was down this year compared to last—mostly because Bitcoin’s price is still off its record high of approximately $69,000, set in November 2021—there was nevertheless an impressive turnout of investors of all ages, industry leaders, policymakers and more.
Factor investing has seen increased popularity in the US. Investors may also want to consider increasing their opportunity set by considering factors abroad.
When markets turn volatile, it’s not time to despair. Stephen Dover, Head of Franklin Templeton Institute, offers some judicious perspectives on how to turn volatility into opportunity.
I once had a cat who liked movies. His name was Otto—he passed away in 2014 at 15 years old. His favorite movie was The Matrix because there’s lots of action and explosions. All the action on the screen could hold his attention.
Investors aren’t likely to see a Bitcoin-spot exchange-traded fund offered in the US anytime soon, according to VanEck Chief Executive Officer Jan Van Eck.
Here’s what we learned in earnings season about how companies are coping with a particularly tricky set of macroeconomic conditions.
Credit conditions are tightening in both Europe and the United States. Our analysis follows in our mid-quarter update, Tightening Credit.
Advisors are looking ahead to the policy and tax changes impacting their high-net-worth clients. Those include changes stemming from the passage of Secure 2.0 Act.
Looming behind market fears over the prospect of a historic US default is the less-discussed risk of what would follow a deal to resolve the debt-ceiling impasse.
The U.S. economy is likely slowing down, and a recession seems likely in the 12-18 month time horizon.
Artificial Intelligence (AI) is a key pillar of the digital transformation theme, which is driving significant disruption and spurring new growth. Grant Bowers, portfolio manager with Franklin Equity Group, offers a unique perspective of the challenges and benefits of this evolving and disruptive technology.
REITs are most often thought about as income-producing investments. Although this is generally a true statement, REITs can also be great builders of wealth if invested correctly. To invest in REITs correctly, it is imperative that the investor understand the true nature of the beast.
An in-depth analysis of hedge fund performance demonstrates that, over the past 15 years, lower-beta hedge fund styles have generally achieved higher alpha, aligning with investors' objectives of maximizing returns and diversification.
Parking your fixed-income assets in cash may seem like a safe choice in today’s volatile investing environment, but it’s actually a risky proposition. Here are three reasons why sitting on the sidelines can be a dangerous game.
For this edition of Bull vs. Bear, James Comtois, and Elle Caruso discussed the pros and cons of using single-stock ETFs to express opinions on stock earnings.
As financial advisors and wealth managers, we want our ultra-high net worth clients to emulate the Rockefellers, not the Vanderbilts.
Despite economic uncertainty, we see compelling value in high-quality, liquid assets that we view as more resilient in the face of a potential recession.
April's ZHVI came in at $339.048, up 0.34% from March and up 3.30% from April 2022. This is the second consecutive monthly increase in home value. After adjusting for inflation, the real figures are -0.21% month-over-month and -4.45% year-over-year.
This morning's release of the April existing home sales showed that sales continued to fall for a second straight month to a seasonally adjusted annual rate of 4.28 million units from the previous month's 4.43 million. The latest number represents a 3.4% month-over-month decrease and was well below the forecast of a 0.1% increase in sales. Existing home sales are now down 23.2% compared to one year ago.
The latest Conference Board Leading Economic Index (LEI) for April dropped to 107.5 from March's revised figure of 108.2. This is the 13th consecutive monthly decline, the longest streak since 2009, and the lowest reading since September 2020. Today's reading represented a 0.6% month-over-month decline, consistent with the forecast.
It’s hard to open up a newspaper these days and not see a scary story about the debt ceiling debate. The Biden Administration is saying that a “default” is approaching if an agreement isn’t reached soon.
The view by many is that sustainable investing is concessionary in that financial results are forgone in order to achieve sustainable outcomes. Our historical analysis shows that this assertion isn’t true and that unique ESG data can be predictors of company results.
The Northern Trust Economics team shares its outlook for U.S. growth, employment, interest rates, and inflation.
Tencent Holdings Ltd. posted its fastest pace of revenue growth in more than a year but earnings missed estimates, reflecting an uneven internet sector recovery during China’s post-pandemic reopening.
The Federal Reserve’s latest 0.25% interest-rate hike has likely capped one of its most aggressive policy-tightening cycles in 40 years. And the cumulative 5% policy rate increase in just over a year is now starting to have an effect on rate-sensitive sectors and inflation.
The latest manufacturing index came in at -10.4, up 20.9 from last month, marking the index's ninth negative reading in a row. The six-month outlook was down 8.8 points from last month and remains in negative territory for the third straight month at -10.3.
Working with a skilled OCIO provider can help you position your portfolio to benefit from investment opportunities and avoid uncompensated risks.
The current economic and investing environment remains one of the most challenging and difficult to navigate in recent times. We have stubborn inflation, economic resilience, geopolitical tensions, tight labour markets, rising interest rates, higher for longer monetary policy, QT, bank failures, overwhelming bearishness and now, issues surrounding the debt ceiling.
Month-over-month nominal retail sales in April were up 0.42% and up 1.60% YoY. However, after adjusting for inflation, real retail sales increased by 0.05% and were down 3.20% YoY.
The paradox that this marriage potential created at the college was that the odds are good, but the goods are odd. This is the statement that can be made for common stock investing today.
Alphabet Inc. is back in the game. The artificial intelligence game, that is.
The patent that’s given Vanguard Group an edge over competitors for the past 20 years — and helped its clients pull in more than $100 billion worth of additional investment gains — expired today.
Muni investors have more reasons for optimism than concern as California tackles a projected $31.5 billion budget deficit.
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for April new residential housing starts. The latest reading of 1.401M was just above Investing.com's forecast of 1.400M and is a 2.2% increase from the March's revised figure of 1.371M. Housing starts are down 22.3% compared to this time last year.
The future of money is uncertain, and speculation about what comes next is all over the place. The Federal Reserve note "dollar" is the world's reserve currency, but its seat on that throne is no longer secure.
If 2022 was the zenith of the post financial crisis bull market, the intervening year and a quarter is a relatively short period from which to conclude that a turn in the secular tide has taken place. That said, several indicators have already begun to signal a change in trend.
No one is bragging about the index fund they own to their friends.
You can’t carry other people’s emotional weight for long without your legs giving out.
Equita Financial Network is helping women build independent financial advisory firms efficiently with tangible, meaningful support.
Our older advisors (four of them in their 60s) are not comfortable bringing the younger team members into their client meetings.
Long-term Treasury bonds are an excellent investment. But timing the purchase of bonds is difficult because three headwinds are keeping rates higher.
Estate Planning
Household Net Worth Q1 2023: The "Real" Story
This is a couple months past its release, but the latest Fed balance sheet shows that total household and nonprofit organizations net worth is 151% above the 2009 trough. The nominal Q1 2023 net worth is up 2.1% from the previous quarter and down 2.5% 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?
U.S. Workforce Analysis: May 2023 Update
I've updated our monthly workforce analysis to include the latest employment report for May. The unemployment rate rose to 3.7% and the number of new non-farm jobs (a relatively volatile number subject to extensive revisions) came in at 339K.
Full-time and Part-time Employment: A Deeper Look
Let's take a close look at May's employment report numbers on Full and Part-Time Employment. The latest data shows that 83.6% of total employed workers are full-time (35+ hours) and 16.4% of total employed workers are part-time (<35 hours).
Multiple Jobholders are 4.8% of All Employed
Multiple jobholders account for 4.8% 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.
Goods-Producing vs. Services-Providing Employment in May
The latest monthly employment report showed 339,000 nonfarm jobs were added in May. An industry breakdown of that number shows a gain of 313,000 service-providing jobs and a gain of 26,000 goods-producing jobs.
Trade Deficit Expands to $74.60B
The U.S. international trade in goods and services, also known as the FT-900, is published monthly by the Bureau of Economic Analysis with data going back to 1992 and details U.S. exports and imports of goods and services. In April, the trade deficit expanded by 23% to $74.60B. This is the largest gap the trade balance has seen in the last 6 months. The latest reading was smaller than the -$75.20B forecast.
Weekly Gasoline Update: Prices Drop for First Time in 4 Weeks
As of June 5, the price of regular and premium gas decreased by 3 cents and 2 cents, respectively, from the previous week. According to GasBuddy.com, California has the highest average price for regular at $4.79 and Mississippi has the cheapest at $2.93. The WTIC end-of-day spot price for crude oil closed at $72.15 and up 3.9% from last week.
The Top Five Mistakes Advisors Make in Surge Meetings
Too many advisors jump into surge poorly prepared to deliver massive value to their clients. Here are five common mistakes and how to avoid them.
The Case for Non-U.S. Allocations
At of the start of this year, Rick Pitcairn took on a new position as the chief global strategist at Pitcairn, a 100-year-old multi-family office with $7bn in client assets. In this position, he is focusing on macro-economic trends and is searching for new global initiatives that will add to the firm’s growth.
Rick recently journeyed to India where he met with some of the wealthiest local families to discuss multi-generational wealth transfer. He saw that people all around the world want the same things, including economic security and a safe environment to raise their children. But the investing and business environments differ significantly. Rick knows that U.S. investors have a home bias, but he saw substantial economic growth is happening outside our borders. Rick is here to discuss if an international allocation appropriate or too risky.
World Markets Watchlist: June 5, 2023
Seven of the eight indexes on our world watch list posted gains through June 5, 2023. Nikkei 225 continued to climb, finishing in the top spot with a YTD gain of 23.46%. The U.S.'s S&P 500 finished in second with a YTD gain of 11.76% while Germany's DAXK jumped into third with a YTD gain of 9.09%.
Treasury Yields Snapshot: June 2, 2023
The yield on the 10-year note ended June 2, 2023 at 3.69%, the 2-year note ended at 4.50%, and the 30-year at 3.88%.
Vehicle Sales Per Capita as of May 2023
The moving average for the light vehicle sales per capita series peaked in August 1978. Almost 45 years later, it is down 40.5% from that peak.
Ensure your Clients' Estate Plans are SECURE
Provisions of the SECURE Act may require advisors to revisit estate plans for clients who aren't utilizing their RMDs or who have qualified assets intended for the next generation. Some clients may benefit from strategies for using life insurance to maximize the value of qualified assets while minimizing their tax burden.
Stay informed and proactive to help clients meet their estate planning goals. Learn how to offset the taxes on qualified assets, structure investments for optimal distribution and navigate changes to inherited IRAs and new RMD requirements under the SECURE Act 2.0."
Treasury Yields: A Long-Term Perspective
As of May 31, 2023, the 10-year note was 312 basis points above its historic closing low of 0.52% reached on August 4, 2020.
ISM Manufacturing Index Contracts for Seventh Straight Month
The Institute for Supply Management (ISM) manufacturing purchasing managers index (PMI) fell to 46.9 in May. The lates figure marks the seventh consecutive month the index has been in contraction territory after a 29-month period of growth dating back to June 2020. The May reading was just below the forecast of 47.0.
S&P Global US Manufacturing PMI™: Renewed Decline in May
The May S&P Global US Manufacturing PMI™ dropped for the first time in five months to 48.4. The latest figure moves the index back into contraction territory after a brief 1-month stint in expansion territory. The May reading is slightly below the forecast of 48.5.
Moving Averages: S&P Finishes May Up 0.25%
Valid until the market close on June 30, 2023
The S&P 500 closed May with a monthly gain of 0.25%, after a gain of 1.46% in April. At this point, after close on the last day of the month, two of five Ivy portfolio ETFs — Vanguard Real Estate ETF (VNQ) and Invesco DB Commodity Index Tracking Fund (DBC) — are signaling "cash", unchanged from last month's final double "cash" signal.
How to Incorporate Behavioral Factors into Planning Discussions
Without understanding people – how they think and act, and what they believe – you can’t effectively help them, no matter how good you are at planning or asset allocation.
CPI and PCE: Two Measures of Inflation and Fed Policy
The BEA's core Personal Consumption Expenditures (PCE) Price Index for April, released last Friday, shows that core inflation continues to be well above the Federal Reserve's 2% long-term target at 4.7%. The April core Consumer Price Index (CPI) release was higher, at 5.5%. The Fed is on record as using core PCE data as its primary inflation gauge.
Chicago PMI Regresses to Six Month Low
The latest Chicago Purchasing Manager's Index (Chicago Business Barometer) regressed to 40.4 in May from 48.6 in April. This is the ninth straight month in contraction territory. This reading comes in below the forecast of 47.0.
Social Security: Congress is Playing Chicken with a Train
As the debt limit negotiations near resolution, the specter of a default recedes. But the lesson is that both sides were willing to play chicken with the train.
Regional Fed Manufacturing Overview: May 2023
Five out of the 12 Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia. The May average of the five districts is -17.5, down from the previous month. This is the lowest monthly average in the last three years.
Dallas Fed Manufacturing: Business Conditions Worsen to Three Year Low
The Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for May. The latest general business activity index came in at -29.1, down 5.7 from last month. The general business activity index has declined each of the past four months and has been in contraction territory since May of last year.
Consumer Confidence Slips to Six Month Low
The Conference Board's Consumer Confidence Index ® slipped to 102.3 in May from April's upwardly revised reading of 103.7. This month's reading was better than expected, exceeding the 99.0 forecast. The latest figure is the index's lowest reading in the past six months.
America's Driving Habits as of March 2023
Travel on all roads and streets increased in March. The 12-month moving average was up month-over-month by 0.1% and was up 0.3% 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 0.0% MoM and down 0.8% YoY.
S&P Case-Shiller Home Price Index: Rebound Continued in March
In March, S&P Case-Shiller Home Price Index revealed seasonally adjusted home prices for the benchmark 20-city index saw a 0.5% increase month-over-month (MoM) and a 1.2% decrease year-over-year (YoY). After adjusting for inflation, the MoM was reduced to 0.0% and the YoY was reduced to -8.5%.
FHFA House Price Index Reaches Record High in March
The Federal Housing Finance Agency (FHFA) has released its U.S. house price index (HPI) for March. The index reached a record high last month, coming in at 398.0. U.S. house prices increased by 0.6% from the previous month. Year-over-year the index is up 3.6%. After adjusting for inflation, the real index is up 0.8% in March and up 0.2% year-over-year.
The "Real" Goods on the April Durable Goods Data
The Census Bureau has posted its advance report on new orders for durable goods for April. This series dates from 1992 and is not adjusted for either population growth or inflation. Let's review durable goods data with those two adjustments.
Q1 Real GDP Per Capita at 0.8% vs. Q1 Real GDP at 1.3%
The second estimate for Q1 GDP came in at 1.3%, a decrease from 2.6% for the Q4 third estimate. With a per-capita adjustment, the headline number is lower at 0.8%, a decrease from 2.0% for the Q4 headline number.
The Philly Fed ADS Business Conditions Index Update
We've updated our periodic look at the Philly Fed ADS Index which includes real GDP (Q1 2023 second estimate) and initial jobless claims through 5/20.
The Big Four: Real Personal Income Inches Up
Personal income (excluding transfer receipts) rose 0.5% in April and is up 5.7% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, real personal income (excluding transfer receipts) was up 0.2% month-over-month and 1.2% year-over-year.
Real Disposable Income Per Capita Flat in April
With the release of this morning's report on April'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 0.37% month-over-month change in disposable income comes to 0.00% when we adjust for inflation. The year-over-year metrics are 7.36% nominal and 2.87% real.
PCE Price Index: April Core Up to 4.7%
The BEA's Personal Income and Outlays report for April was published this morning by the Bureau of Economic Analysis. The latest headline PCE price index was up 0.4% month-over-month (MoM) and increased to 4.4% year-over-year (YoY). Core PCE was also up 0.4% monthly and rose to 4.7% year-over-year, still well above the Fed's 2% target rate.
Durable Goods Orders Up 1.1% in April, Better Than Expected
New orders for manufactured durable goods came in better than expected in April at $283.02B. This is a 1.1% increase from last month and higher than the expected 1.1% decline. The series is up 4.2% year-over-year (YoY). If we exclude transportation, "core" durable goods were down 0.2% from last month and down 0.2% from last year.
An Inside Look at the Q1 2023 GDP Second Estimate
Real gross domestic product (GDP) is comprised of four major subcomponents. In the Q1 GDP second estimate, two out of the four components made positive contributions, one component made negative contributions, while the remaining component had a neutral impact.
Kansas City Fed Manufacturing Activity Remained Steady in May
The latest Kansas City Fed Manufacturing Survey composite index came in at -1. This is an increase from last month's figure and better than the expected -5 reading. The future outlook came in at 2, down slightly from April.
Pending Home Sales Unchanged in April
The National Association of Realtors® (NAR) released the latest monthly data for its pending home sales index. The latest index remained at 78.9, representing a 0.0% change from last month, lower than the expected 0.5% increase. Pending home sales are down 20.3% compared to one year ago.
Imagine Financial Planning 2030
AI’s arrival will have an increasingly large impact on our lives. That includes investing and, especially, other aspects of financial planning.
Richmond Fed Manufacturing Activity Deteriorated in May
Fifth district manufacturing deteriorated in May, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite manufacturing index is at -15 in May, down 5 from April. This month's reading is worse than the Investing.com forecast of -8 and is the fifth consecutive month the index has reported worsening conditions.
New Home Sales Jump 4.1% in April
This morning's release of the April new home sales from the Census Bureau came in at 683K, up 4.1% month-over-month from a revised 656K in March. This is above the Investing.com forecast of 663K and the highest level in over a year. The median home price is now at $420,800, down $35K from March on a nominal basis.
The Fed Remains Confronted With a Difficult Juggling Act
Review the latest Weekly Headings by CIO Larry Adam.
Economic Imbalances Could Mean Deep Recession or Sticky Inflation
A member of Putnam's Fixed Income team since 2007, Onsel Gulbiten analyzes macroeconomic issues, including inflation, interest rates, and policy developments.
Banking Stress and Preferred Securities: Now What?
Banks and financial institutions are big issuers of preferred securities, so the recent banking industry volatility has had an impact. Our guidance on preferreds is unchanged but with some caveats.
U.S. Debt-Ceiling Scenarios: 4 Different Ways the Negotiations Could Play Out
Negotiations among lawmakers in Washington, D.C., to raise the debt ceiling might trend in a more favorable direction.
Surrounding Crypto ETFs: Metaverse, Web3, and More
The distinction between futures-based ETFs and crypto equity ETFs is clear when you look closely at the two. But even when examining them closely, it may be difficult to distinguish between the different types of blockchain/crypto equity ETFs because of similarities with fintech, metaverse, and Web3 concepts.
Pre-Election Strategies for Wealthy Americans
HNW Americans need to be prepared for every contingency, including Democrats winning a trifecta of POTUS and majorities in both houses of Congress.
Real Money Supply and The Real Price of Petroleum, Examined
Chief Economist Eugenio J. Alemán discusses current economic conditions.
Technology Turning
We often talk about technology’s influence on the economy. After the Strategic Investment Conference, though, I’ve decided that isn’t strong enough. It’s more correct to say technology is the economy.
Bitcoin’s Rise To Prominence On Full Display At This Year’s Miami Conference
Although attendance was down this year compared to last—mostly because Bitcoin’s price is still off its record high of approximately $69,000, set in November 2021—there was nevertheless an impressive turnout of investors of all ages, industry leaders, policymakers and more.
International Style
Factor investing has seen increased popularity in the US. Investors may also want to consider increasing their opportunity set by considering factors abroad.
What To Do When Stuff Happens
When markets turn volatile, it’s not time to despair. Stephen Dover, Head of Franklin Templeton Institute, offers some judicious perspectives on how to turn volatility into opportunity.
The Boringest Excitingest Market in History
I once had a cat who liked movies. His name was Otto—he passed away in 2014 at 15 years old. His favorite movie was The Matrix because there’s lots of action and explosions. All the action on the screen could hold his attention.
A Bitcoin-Spot ETF Is Unlikely in US in the Near Future, VanEck CEO Says
Investors aren’t likely to see a Bitcoin-spot exchange-traded fund offered in the US anytime soon, according to VanEck Chief Executive Officer Jan Van Eck.
Learnings from Earnings: Macro Crosscurrents Make Growth Elusive
Here’s what we learned in earnings season about how companies are coping with a particularly tricky set of macroeconomic conditions.
Mid-Quarter Update: Tightening Credit
Credit conditions are tightening in both Europe and the United States. Our analysis follows in our mid-quarter update, Tightening Credit.
Policy and Tax Changes Impacting HNW Clients in 2023
Advisors are looking ahead to the policy and tax changes impacting their high-net-worth clients. Those include changes stemming from the passage of Secure 2.0 Act.
Wall Street Fears $1 Trillion Aftershock From Debt Deal
Looming behind market fears over the prospect of a historic US default is the less-discussed risk of what would follow a deal to resolve the debt-ceiling impasse.
Final Approach: May 2023 Economic Update
The U.S. economy is likely slowing down, and a recession seems likely in the 12-18 month time horizon.
Age of AI
Artificial Intelligence (AI) is a key pillar of the digital transformation theme, which is driving significant disruption and spurring new growth. Grant Bowers, portfolio manager with Franklin Equity Group, offers a unique perspective of the challenges and benefits of this evolving and disruptive technology.
4 High-Quality REITs In Value Yielding 5%
REITs are most often thought about as income-producing investments. Although this is generally a true statement, REITs can also be great builders of wealth if invested correctly. To invest in REITs correctly, it is imperative that the investor understand the true nature of the beast.
When High Alpha Met Low Beta
An in-depth analysis of hedge fund performance demonstrates that, over the past 15 years, lower-beta hedge fund styles have generally achieved higher alpha, aligning with investors' objectives of maximizing returns and diversification.
Taking a Time Out? The High Price of Idle Cash
Parking your fixed-income assets in cash may seem like a safe choice in today’s volatile investing environment, but it’s actually a risky proposition. Here are three reasons why sitting on the sidelines can be a dangerous game.
Bull vs. Bear: Playing Earnings Season With Single-Stock ETFs
For this edition of Bull vs. Bear, James Comtois, and Elle Caruso discussed the pros and cons of using single-stock ETFs to express opinions on stock earnings.
Be a Rockefeller, Not a Vanderbilt
As financial advisors and wealth managers, we want our ultra-high net worth clients to emulate the Rockefellers, not the Vanderbilts.
Income Fund Update: Building Resilience and Harnessing Yield in High Quality Assets
Despite economic uncertainty, we see compelling value in high-quality, liquid assets that we view as more resilient in the face of a potential recession.
Zillow Home Value Index: Increases for Second Straight Month
April's ZHVI came in at $339.048, up 0.34% from March and up 3.30% from April 2022. This is the second consecutive monthly increase in home value. After adjusting for inflation, the real figures are -0.21% month-over-month and -4.45% year-over-year.
Existing Home Sales Fall Again in April
This morning's release of the April existing home sales showed that sales continued to fall for a second straight month to a seasonally adjusted annual rate of 4.28 million units from the previous month's 4.43 million. The latest number represents a 3.4% month-over-month decrease and was well below the forecast of a 0.1% increase in sales. Existing home sales are now down 23.2% compared to one year ago.
CB Leading Economic Index: Forecasts Mild Recession by Mid-2023
The latest Conference Board Leading Economic Index (LEI) for April dropped to 107.5 from March's revised figure of 108.2. This is the 13th consecutive monthly decline, the longest streak since 2009, and the lowest reading since September 2020. Today's reading represented a 0.6% month-over-month decline, consistent with the forecast.
Battle of the Budget
It’s hard to open up a newspaper these days and not see a scary story about the debt ceiling debate. The Biden Administration is saying that a “default” is approaching if an agreement isn’t reached soon.
ESG X Big Data: Solving for the Double Bottom Line
The view by many is that sustainable investing is concessionary in that financial results are forgone in order to achieve sustainable outcomes. Our historical analysis shows that this assertion isn’t true and that unique ESG data can be predictors of company results.
U.S. Economic Outlook, May 2023
The Northern Trust Economics team shares its outlook for U.S. growth, employment, interest rates, and inflation.
Tencent’s Sales Rebound Though Concerns Persist on China Outlook
Tencent Holdings Ltd. posted its fastest pace of revenue growth in more than a year but earnings missed estimates, reflecting an uneven internet sector recovery during China’s post-pandemic reopening.
Connecting the Disinflation Dots in Multi-Asset Strategies
The Federal Reserve’s latest 0.25% interest-rate hike has likely capped one of its most aggressive policy-tightening cycles in 40 years. And the cumulative 5% policy rate increase in just over a year is now starting to have an effect on rate-sensitive sectors and inflation.
Philly Fed Manufacturing Index: Overall Decline Continues
The latest manufacturing index came in at -10.4, up 20.9 from last month, marking the index's ninth negative reading in a row. The six-month outlook was down 8.8 points from last month and remains in negative territory for the third straight month at -10.3.
Know Where You Want to Be: How a Skilled OCIO Provider Can Help Investors Navigate Opportunities and Threats
Working with a skilled OCIO provider can help you position your portfolio to benefit from investment opportunities and avoid uncompensated risks.
Your Complete Guide Through The Current Macro Landscape
The current economic and investing environment remains one of the most challenging and difficult to navigate in recent times. We have stubborn inflation, economic resilience, geopolitical tensions, tight labour markets, rising interest rates, higher for longer monetary policy, QT, bank failures, overwhelming bearishness and now, issues surrounding the debt ceiling.
The Big Four: April Real Retail Sales Up 0.05%
Month-over-month nominal retail sales in April were up 0.42% and up 1.60% YoY. However, after adjusting for inflation, real retail sales increased by 0.05% and were down 3.20% YoY.
Good Odds and Odd Goods
The paradox that this marriage potential created at the college was that the odds are good, but the goods are odd. This is the statement that can be made for common stock investing today.
Alphabet Adds $115 Billion in Value After Defying AI Doubters
Alphabet Inc. is back in the game. The artificial intelligence game, that is.
The Patent That Helped Vanguard Clients Pocket Big Gains Expires
The patent that’s given Vanguard Group an edge over competitors for the past 20 years — and helped its clients pull in more than $100 billion worth of additional investment gains — expired today.
Will California's Budget Woes Have a Hollywood Ending?
Muni investors have more reasons for optimism than concern as California tackles a projected $31.5 billion budget deficit.
Housing Starts Rise 2.2% in April
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for April new residential housing starts. The latest reading of 1.401M was just above Investing.com's forecast of 1.400M and is a 2.2% increase from the March's revised figure of 1.371M. Housing starts are down 22.3% compared to this time last year.
Holding Gold Is Like Holding a Wildcard
The future of money is uncertain, and speculation about what comes next is all over the place. The Federal Reserve note "dollar" is the world's reserve currency, but its seat on that throne is no longer secure.
Transitioning from Secular Bull to Bear?
If 2022 was the zenith of the post financial crisis bull market, the intervening year and a quarter is a relatively short period from which to conclude that a turn in the secular tide has taken place. That said, several indicators have already begun to signal a change in trend.
Why Clients are Attracted to Complex Investments
No one is bragging about the index fund they own to their friends.
Shouldering Stress: Your Role as ‘Atlas the Advisor’
You can’t carry other people’s emotional weight for long without your legs giving out.
Less Talk, More Action to Support Female Advisors
Equita Financial Network is helping women build independent financial advisory firms efficiently with tangible, meaningful support.
My Older Advisors Don’t “Get” the Younger Generation
Our older advisors (four of them in their 60s) are not comfortable bringing the younger team members into their client meetings.
Three Headwinds that Will Keep Rates High
Long-term Treasury bonds are an excellent investment. But timing the purchase of bonds is difficult because three headwinds are keeping rates higher.