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.
Yields on 10-Year Japanese Government Bonds have fallen by about a third over the past two weeks, as shown in the chart below.
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 Chicago Fed National Activity Index (CFNAI) fell to -0.19 in February, down from an unrevised +0.23 in January. All four broad categories of indicators used to construct the index made negative contributions in February, and three categories deteriorated from January. The index’s three-month moving average, CFNAI-MA3, moved up to –0.13 in February from –0.27 in January.
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.
This morning's seasonally adjusted 191K new claims, down 1K from the previous week's revised figure, came in below the Investing.com forecast of 197K.
The Federal Reserve raised interest rates by a quarter percentage point and signaled it’s not finished hiking, despite the risk of exacerbating a bank crisis that’s roiled global markets.
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.
Both the leading indicators of growth and liquidity continue to suggest growth will slow as 2023 progresses.
There are five reasons why prospects decide to choose someone else.
All eyes in the financial and economic world will be laser-focused Wednesday on the Federal Reserve as Chair Jerome Powell tries to balance his fight against inflation against a sudden banking crisis.
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.
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.
You provide a lot of value to your clients. Save them from making even a single catastrophic financial mistake and your fees will forever be a moot point.
If you work with boomer-generation women, are you properly responding to their need for lifetime income? Consider this parable.
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.
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.
FINRA has released new data for margin debt, now available through February. The latest debt level is at 624.38 billion, down 2.6% month-over-month (MoM) and down 25.3% year-over-year (YoY). However after adjusting for inflation, debt level is down 3.2% MoM and down 29.5% YoY.
Chief Economist Eugenio J. Alemán discusses current economic conditions.
Steve Chiavarone doesn’t want to scare anyone, but what he remembers most from the last banking crisis was how sure most people were that it wouldn’t happen.
UBS Group AG agreed to buy Credit Suisse Group AG in a historic, government-brokered deal aimed at containing a crisis of confidence that had started to spread across global financial markets.
Robust risk management is essential for fixed income investors. In his latest commentary, Marcus Moore explains why our sustainable investing team considers ESG factors as material business risks, similar to the traditional risks they also analyze.
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.
Could the consensus view of a “no recession” scenario be wrong? As portfolio managers, this is the question we ask ourselves daily.
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.
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.
Yesterday, the U.S. Census Bureau and the Department of Housing and Urban Development published their February findings for new residential housing starts and building permits. Over the long haul, the two series offer a compelling study of trends in residential real estate. Here is an overlay of the two series since the 1959 inception of the starts and oermits data, which was tracked beginning a year later.
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.
U.S. equities are lower as pressure has returned to the banking sector, which remains top of mind.
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.
Implications of SVB and Credit Suisse on the European banking sector—check out highlights from our recent panel discussion with Kim Catechis, Investment Strategist with the Franklin Templeton Institute.
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.
The 20th century Baby Boom was one of the most powerful demographic events in the history of the United States. We've created a series of charts to show seven age cohorts of the employed population from 1948 to the present.
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for February new residential building permits. The latest reading of 1.524M crushed the Investing.com forecast of 1.340M. Building permits climbed 13.82% from January's revised figure of 1.339M, the largest monthly gain since July 2020.
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.
Federal Reserve Chair Jerome Powell faces growing calls from key lawmakers and regulatory experts for an independent investigation into the collapse of Silicon Valley Bank, not just an internal review by the Fed board.
Elevated job openings may not give an accurate view of labor market conditions.
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.
Note: This commentary has been updated with the latest numbers from the latest employment report for February. Today, one in three of the 65-69 cohort and nearly one in five of the 70-74 cohort are in the labor force.
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%.
Quiet hiring. Quiet quitting. Quiet firing. It seems everyone’s allergic to confrontation in the labor market.
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.
U.S. stocks are falling in pre-market trading as recent banking turmoil on this side of the pond made its way to Europe.
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.
Should we tell our clients we need their help to grow our business?
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.
When it comes to value, you can’t deliver too much. Here are five ways to deliver even more value to your clients this week – without beating them over the head.
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.
The events that began with Thursday’s tumult in financial stocks and precipitated the FDIC takeover of Silicon Valley Bank and Signature Bank were swift.
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).
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.
Can we aggressively position assets today that have the potential for strong growth in the next 24 months when a tuition bill is due, without exposing those assets to market risk?
What does the ratio of unemployment claims tell us about where we are in the business cycle and recession risk?
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).
Can India capitalize on supply chain realignment to build its manufacturing sector?
President Biden has proposed a $6.9 trillion budget that calls for reducing deficits and raising taxes on wealthy people and large corporations. There is a lot of spending in this budget that fuels inflation.
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.
Investors sought the safety of bonds for a second day as jitters over a rout in bank stocks hit risk sentiment and traders speculated that rate-hike bets had gone too far too fast.
Former Treasury Secretary Lawrence Summers said that the odds are now almost even that the Federal Reserve will have to raise its benchmark interest rate to 6% or more to bring inflation back down to its 2% target.
This commentary has been updated to include this morning's release of non-farm employment. February saw a 311,000 increase in total non-farm payrolls. The unemployment rate rose to 3.6%. The Investing.com forecast was for 205,000 jobs gained.
U.S. equities are modestly higher in pre-market action following the February labor report that was only modestly above estimates.
Head of Portfolio Strategy David Dali explains why it’s an opportune time to add emerging-market exposure.
This morning's employment report for February showed a 311,000 increase in total nonfarm payrolls, which exceeded the Investing.com forecast of 205,000 jobs added. The unemployment rate rose to 3.6%.
We believe municipal bonds boast several key factors that position them as an attractive asset class in general, but especially so when markets are volatile.
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.
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?
U.S. stocks are higher, paring weekly losses though the markets remain choppy following this week's hawkish Congressional testimony from Fed Chairman Jerome Powell.
Market Indicators
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.
What are JGBs Trying to Tell Us?
Yields on 10-Year Japanese Government Bonds have fallen by about a third over the past two weeks, as shown in the chart below.
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.
Chicago Fed: Economic Growth Declined in February
The Chicago Fed National Activity Index (CFNAI) fell to -0.19 in February, down from an unrevised +0.23 in January. All four broad categories of indicators used to construct the index made negative contributions in February, and three categories deteriorated from January. The index’s three-month moving average, CFNAI-MA3, moved up to –0.13 in February from –0.27 in January.
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 Unemployment Claims: Down 1K, Lower Than Expected
This morning's seasonally adjusted 191K new claims, down 1K from the previous week's revised figure, came in below the Investing.com forecast of 197K.
Fed Hikes Quarter Point, Signals It Still Expects Higher Rates
The Federal Reserve raised interest rates by a quarter percentage point and signaled it’s not finished hiking, despite the risk of exacerbating a bank crisis that’s roiled global markets.
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.
The Growth Slowdown Is Not Over Yet
Both the leading indicators of growth and liquidity continue to suggest growth will slow as 2023 progresses.
Five Research-Based Reasons Why You Lose Prospects
There are five reasons why prospects decide to choose someone else.
Fed Caught Between Inflation and Bank Crisis
All eyes in the financial and economic world will be laser-focused Wednesday on the Federal Reserve as Chair Jerome Powell tries to balance his fight against inflation against a sudden banking crisis.
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.
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.
Ask Brad: The Toxic Lesson from Dry Cleaners
You provide a lot of value to your clients. Save them from making even a single catastrophic financial mistake and your fees will forever be a moot point.
Annuity? Never
If you work with boomer-generation women, are you properly responding to their need for lifetime income? Consider this parable.
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.
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.
Margin Debt Down 2.6% in February
FINRA has released new data for margin debt, now available through February. The latest debt level is at 624.38 billion, down 2.6% month-over-month (MoM) and down 25.3% year-over-year (YoY). However after adjusting for inflation, debt level is down 3.2% MoM and down 29.5% YoY.
A Difficult Job Becomes Even More Difficult
Chief Economist Eugenio J. Alemán discusses current economic conditions.
Bank Crisis Survivors Remember How Fast the Dominoes Can Fall
Steve Chiavarone doesn’t want to scare anyone, but what he remembers most from the last banking crisis was how sure most people were that it wouldn’t happen.
UBS to Buy Credit Suisse in $3.3 Billion Deal to End Crisis
UBS Group AG agreed to buy Credit Suisse Group AG in a historic, government-brokered deal aimed at containing a crisis of confidence that had started to spread across global financial markets.
Sustainable Investing: Opportunistically Managing Risk
Robust risk management is essential for fixed income investors. In his latest commentary, Marcus Moore explains why our sustainable investing team considers ESG factors as material business risks, similar to the traditional risks they also analyze.
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.
Consensus View Of “No Recession.” Could It Be Wrong?
Could the consensus view of a “no recession” scenario be wrong? As portfolio managers, this is the question we ask ourselves daily.
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.
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.
A Long-Term Look: Residential Building Permits and Housing Starts
Yesterday, the U.S. Census Bureau and the Department of Housing and Urban Development published their February findings for new residential housing starts and building permits. Over the long haul, the two series offer a compelling study of trends in residential real estate. Here is an overlay of the two series since the 1959 inception of the starts and oermits data, which was tracked beginning a year later.
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.
Banking Sector Uncertainty Keeps Pressure on Stocks
U.S. equities are lower as pressure has returned to the banking sector, which remains top of mind.
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.
European Banking Sector—Taking Stock After Silicon Valley Bank and Credit Suisse
Implications of SVB and Credit Suisse on the European banking sector—check out highlights from our recent panel discussion with Kim Catechis, Investment Strategist with the Franklin Templeton Institute.
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.
Baby Boomer Employment - February 2023
The 20th century Baby Boom was one of the most powerful demographic events in the history of the United States. We've created a series of charts to show seven age cohorts of the employed population from 1948 to the present.
Building Permits Climb 13.8% in February
The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for February new residential building permits. The latest reading of 1.524M crushed the Investing.com forecast of 1.340M. Building permits climbed 13.82% from January's revised figure of 1.339M, the largest monthly gain since July 2020.
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.
Powell Faces Bipartisan Chorus Calling for Independent SVB Probe
Federal Reserve Chair Jerome Powell faces growing calls from key lawmakers and regulatory experts for an independent investigation into the collapse of Silicon Valley Bank, not just an internal review by the Fed board.
Are Job Openings Overstated?
Elevated job openings may not give an accurate view of labor market conditions.
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.
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 February. Today, one in three of the 65-69 cohort and nearly one in five of the 70-74 cohort are in the labor force.
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%.
Is Quiet Hiring the Answer to the Great Resignation?
Quiet hiring. Quiet quitting. Quiet firing. It seems everyone’s allergic to confrontation in the labor market.
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.
Stocks Falling as European Banking Worries Flare Up
U.S. stocks are falling in pre-market trading as recent banking turmoil on this side of the pond made its way to Europe.
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.
Stop Calling it “Referrals”
Should we tell our clients we need their help to grow our business?
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.
Is There Such a Thing As Too Much Value?
When it comes to value, you can’t deliver too much. Here are five ways to deliver even more value to your clients this week – without beating them over the head.
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.
The 2022-2023 Regime Change
The events that began with Thursday’s tumult in financial stocks and precipitated the FDIC takeover of Silicon Valley Bank and Signature Bank were swift.
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).
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.
An Annuity Can Fund Looming College Tuition
Can we aggressively position assets today that have the potential for strong growth in the next 24 months when a tuition bill is due, without exposing those assets to market risk?
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?
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).
India Seeks More Manufacturing
Can India capitalize on supply chain realignment to build its manufacturing sector?
Biden’s $6.9 Trillion Deficit Gamble
President Biden has proposed a $6.9 trillion budget that calls for reducing deficits and raising taxes on wealthy people and large corporations. There is a lot of spending in this budget that fuels inflation.
Monetary Cycle Versus Fiscal Cycle: What is the Difference?
Chief Economist Eugenio J. Alemán discusses current economic conditions.
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.
Treasuries Surge as Bond Bulls Seize on Bank Fears, Jobless Data
Investors sought the safety of bonds for a second day as jitters over a rout in bank stocks hit risk sentiment and traders speculated that rate-hike bets had gone too far too fast.
Summers Sees Nearly 50-50 Odds Fed Must Hike to 6% or Higher
Former Treasury Secretary Lawrence Summers said that the odds are now almost even that the Federal Reserve will have to raise its benchmark interest rate to 6% or more to bring inflation back down to its 2% target.
The Big Four Economic Indicators: February Employment
This commentary has been updated to include this morning's release of non-farm employment. February saw a 311,000 increase in total non-farm payrolls. The unemployment rate rose to 3.6%. The Investing.com forecast was for 205,000 jobs gained.
Stocks Trying to Battle Back From a Two-Day Rout
U.S. equities are modestly higher in pre-market action following the February labor report that was only modestly above estimates.
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.
February Employment: 311K Jobs Added, Higher Than Forecast
This morning's employment report for February showed a 311,000 increase in total nonfarm payrolls, which exceeded the Investing.com forecast of 205,000 jobs added. The unemployment rate rose to 3.6%.
Municipal Bond Outlook 2023: Three Reasons for Optimism
We believe municipal bonds boast several key factors that position them as an attractive asset class in general, but especially so when markets are volatile.
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.
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?
Stocks Chipping Away at Weekly Losses
U.S. stocks are higher, paring weekly losses though the markets remain choppy following this week's hawkish Congressional testimony from Fed Chairman Jerome Powell.