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.
Remember when banks were small? Those old enough to have a bank account in the 1970s should. Back then, most people did their banking with a locally owned institution, often the First National Bank of (Your Town).
Gold appears to be well-positioned for a strong pump that could carry it to new all-time high prices in 2023—and beyond. As you know, I’ve been following and writing about the precious metal market for a very long time, and I see a number of unique catalysts at the moment that could contribute to higher gold prices.
Worries about the health of the overall banking system have led to a drawdown in deposits, with investors yanking nearly $100 billion in deposits from U.S. banks during the week that ended March 15. What’s more, there are fears that the stresses in the banking sector could be the start of the next financial crisis.
Stocks built on overnight gains and Treasury yields inched lower following today's relatively benign February PCE inflation data.
The yield on the 10-year note ended March 31, 2023 at 3.48%, the two-year note ended at 4.06%, and the 30-year at 3.67%.
Valid until the market close on April 30, 2023.
The S&P 500 closed March with a monthly gain of 3.51%, after a loss of 2.61% in February. 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," a decrease from last month's final triple "cash" signal.
The benchmark S&P 500 Index is wrapping up its second straight quarterly gain, rising 5.50% through Thursday and adding to the 7.08% surge in the final three months of 2022.
Up until recently, crude oil inventories saw continued build after build, suggesting the real time supply and demand dynamics in the market have been tilted toward the bearish side of the ledger.
Personal income (excluding transfer receipts) in February rose 0.3% and is up 6.6% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, real personal income (excluding transfer receipts) MoM was up 0.03% and was up 1.6% year-over-year.
The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, shifted up to 43.8 in March from 43.6 in February, marking the seventh straight month in contraction territory. This reading comes in above the Investing.com forecast of 43.4.
With the release of this morning's report on February'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 0.43% month-over-month change in disposable income comes to 0.16% when we adjust for inflation. This is a steep decline from last month's 2.00% nominal and 1.42% real change. The year-over-year metrics are 7.90% nominal and 2.76% real.
The BEA's Personal Income and Outlays report for February was published on this morning by the Bureau of Economic Analysis. The latest headline PCE price index was up 0.3% month-over-month (MoM) and is up 5.0% year-over-year (YoY). Core PCE dropped to 4.6% YoY, still well above the Fed's 2% target rate, and is up 0.3% MoM. All readings were below their respective Investing.com forecasts.
The accompanying chart is a way to visualize real GDP change since 2007 and uses stacked column chart to segment the four major components of GDP with a dashed line overlay to show the sum of the four, which is real GDP itself. Here is the latest overview from the Bureau of Labor Statistics.
When we talk about shadow banking, we think of China, one of the world’s most indebted nations. Lending by companies that do not own a banking license has reached 50 trillion yuan ($7.3 trillion), or about 42% of gross domestic product, according to Moody’s Investors Service.
Elon Musk and an array of public figures have signed their names to an open letter that went viral this week, calling for a six-month pause on training language models more powerful than GPT-4, the technology underpinning ChatGPT.
The third estimate for Q4 GDP came in at 2.6% a decrease from 3.2% for the Q3 third estimate. With a per-capita adjustment, the headline number is lower at 2.0%, a decrease from 2.7% for the Q3 headline number.
We've updated our periodic look at the Philly Fed ADS Index which includes real GDP (Q4 2022 third estimate) and initial jobless claims through 3/25.
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 latest average of the five for March is -13.7, down from the previous month.
The latest price of home heating oil nationwide dropped to its lowest price of the year at $4.07. The current price is down 6 cents from last week and down $1.05 compared to one year ago.
A group of conservative Republicans representatives known as the House Freedom Caucus came out last week against any proposal that would lift the cap on deposit insurance, currently set at $250,000. Members of US Congress on both sides of the aisle are understandably cautious about taking such a dramatic step in the middle of an unfolding crisis.
Congress is asking the Federal Reserve and other financial regulators what went wrong at Silicon Valley Bank and why they didn’t see it coming. In due course, they’ll admit some mistakes, draw some lessons and tweak some rules.
I’ve received more emails and calls from clients on the failure of SVB Bank than I did on the stock market crash in April of 2020. That tells me there is wide concern today about the stability of the economy and financial markets.
The goal of marketing is to garner loyalty among existing clients while also attracting new ones to drive growth and profitability for your firm. To implement engaging messaging, follow these tips…
The Senate Banking Committee held a hearing to investigate the collapse of Signature Bank (SBNY) and Silicon Valley Bank (SIVB/SIVBQ) that brought to discussion possible changes for the entire banking system.
From the perspective of the U.S. stock market, 2022 was a miserable year (with the S&P 500 declining 19.4%), but until recently, 2023 was shaping up to be a stronger year.
The National Association of Realtors® (NAR) released the latest monthly data for its pending home sales index. According to the NAR, "Pending home sales grew in February for the third consecutive month."
The failures of Silvergate Bank, Silicon Valley Bank, Signature Bank, and the current struggles of First Republic and Pacific West Bank have seen bank deposits flee to the perceived safety of large banks.
With this morning's release of the January S&P Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index saw a 0.4% decrease month-over-month (MoM), higher than the Investing.com forecast of -0.5%, and a 2.6% increase year-over-year (YoY). After adjusting for inflation, the MoM was reduced to -1.1% and the YoY was reduced to -4.8%.
For millions of borrowers, student loan forgiveness will mean the difference between significant relief and ongoing payments. If you’re among them, the question is… what next?
The sudden loss of confidence by depositors in some US banks is causing many to focus on the scope for financial contagion and the needed policy responses. What should not be overlooked is the other, and slower, contagion channel in play — that involving enablers of economic growth...
The changes inside SECURE 2.0 range from new rules related to 529 college savings plans to when retirees should take their required minimum distributions (RMDs). With so much to sort through, advisors may be overlooking some of the details of the act.
As of March 27, the prices of regular and premium gas were unchanged from last week. According to GasBuddy.com, Hawaii has the highest average price for regular at $4.78 and Mississippi has the cheapest at $2.96. The WTIC end-of-day spot price for crude oil closed at $72.81 and is up 7.4% from last week.
Fifth district manufacturing increased in March, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite manufacturing index is at -5 in March, up 11 from February. This is better than the Investing.com forecast of -10. Despite this month's increase, the latest 3-month moving average dropped by 2 from last month to -10.7, the lowest it has been since June 2020.
Beyond the near-term turmoil, there may need to be a re-evaluation of the regional banking model in the United States, according to a recent panel hosted by Stephen Dover, Head of Franklin Templeton Institute.
The Conference Board released its Consumer Confidence Index ® this morning, with the headline number coming in at 104.2, an increase of 0.8 from the upwardly revised final reading of 103.4 in February. This month's reading is better than the Investing.com forecast of 101.0.
The Federal Housing Finance Agency (FHFA) has released its U.S. house price index (HPI) for January. U.S. house prices increased by 0.2% from the previous month. Year-over-year the index is up 5.3% on a non-seasonally adjusted nominal basis. After adjusting for inflation and seasonality, the real index is down 0.2% in January and down 0.3% year-over-year (seasonally adjusted).
Ignore short-term market moves and volatility. The biggest investment returns are driven by a handful of outliers in the long run. Growth investing is for patient capital seeking long runways for companies that will ultimately generate outsized returns for investors. Baillie Gifford is uniquely positioned as a global asset manager that is entirely owned by a private partnership. My guest today, Stuart Dunbar, has identified a few technologies that will be important in driving growth in sectors where we will see transformation in the years to come.
A simple annuity can effectively replace bond holdings in a retirement plan that are earmarked to meet the lifetime spending goal. The question is why should a retiree hold any bonds in the portion of their asset base designed to cover ongoing retirement spending goals?
Six of eight indexes on our world watch list posted gains through March 27, 2023. France's CAC 40 finished in the top spot with a YTD gain of 9.34%. Germany's DAXK finished second with a YTD gain of 8.33%, and Tokyo's Nikkei 225 moved to third with a YTD gain of 5.30%. India's BSE SENSEX finished last with a loss of 5.24% YTD.
The Federal Reserve raised short-term interest rates by another quarter point on Wednesday.
The Census Bureau has posted its advance report on durable goods new orders for February. 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.
Many have questioned the importance of the recent bank failures.
The economic signals and a host of geopolitical risks confronting investors suggest that 2023 could be as challenging as 20022 for both stocks and bonds.
The Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for March. The latest general business activity index came in at -15.7, down 2.2 from last month. The general business activity index has been in contraction territory since May of last year. The 3-month moving average is up 1.5 this month to -12.5, its lowest since June 2022. All figures are seasonally adjusted.
The fallout from SVB will make the Fed's job more difficult.
Stock and bond markets were shaken by the recent banking crisis in the US and Europe.
Slower credit growth may curtail broader U.S. economic growth, taking pressure off the Federal Reserve.
Recently I saw someone share a clip from their weather app. It said, “Rain expected at 3 pm,” right above a little graphic showing a 30% chance of rain at 3 pm. What’s wrong with that picture?
The U.S. dollar remains the world’s top reserve currency for now, though its share of global central banks’ official holdings has slipped in the past 20 years. By contrast, the yuan’s share of official holdings has more than doubled since 2016.
Following recent efforts by central banks and regulators to alleviate the banking crisis, Franklin Templeton Institute’s Stephen Dover and Lukasz Kalwak discuss their thoughts on the implications and outlook for the banking industries in the United States and Europe.
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.
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.
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.
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.
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.
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.
Disturbing Thoughts
Remember when banks were small? Those old enough to have a bank account in the 1970s should. Back then, most people did their banking with a locally owned institution, often the First National Bank of (Your Town).
The Top Three Catalysts For Higher Gold Prices In 2023
Gold appears to be well-positioned for a strong pump that could carry it to new all-time high prices in 2023—and beyond. As you know, I’ve been following and writing about the precious metal market for a very long time, and I see a number of unique catalysts at the moment that could contribute to higher gold prices.
Is the Money Safe?
Worries about the health of the overall banking system have led to a drawdown in deposits, with investors yanking nearly $100 billion in deposits from U.S. banks during the week that ended March 15. What’s more, there are fears that the stresses in the banking sector could be the start of the next financial crisis.
Price Growth Slows, Stocks Gain
Stocks built on overnight gains and Treasury yields inched lower following today's relatively benign February PCE inflation data.
Treasury Yields Snapshot: March 31, 2023
The yield on the 10-year note ended March 31, 2023 at 3.48%, the two-year note ended at 4.06%, and the 30-year at 3.67%.
Moving Averages: S&P Finishes March Up 3.51%
Valid until the market close on April 30, 2023.
The S&P 500 closed March with a monthly gain of 3.51%, after a loss of 2.61% in February. 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," a decrease from last month's final triple "cash" signal.
This Stock Market Splash Has a Disturbing Undertow
The benchmark S&P 500 Index is wrapping up its second straight quarterly gain, rising 5.50% through Thursday and adding to the 7.08% surge in the final three months of 2022.
A Contrarian Buying Opportunity For Energy Bulls
Up until recently, crude oil inventories saw continued build after build, suggesting the real time supply and demand dynamics in the market have been tilted toward the bearish side of the ledger.
The Big Four: Real Personal Income in February
Personal income (excluding transfer receipts) in February rose 0.3% and is up 6.6% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, real personal income (excluding transfer receipts) MoM was up 0.03% and was up 1.6% year-over-year.
Chicago PMI Down Shifts Up in March, Better Than Expected
The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, shifted up to 43.8 in March from 43.6 in February, marking the seventh straight month in contraction territory. This reading comes in above the Investing.com forecast of 43.4.
Real Disposable Income Per Capita Inches Up 0.16% in February
With the release of this morning's report on February'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 0.43% month-over-month change in disposable income comes to 0.16% when we adjust for inflation. This is a steep decline from last month's 2.00% nominal and 1.42% real change. The year-over-year metrics are 7.90% nominal and 2.76% real.
PCE Price Index: February Core at 4.6% YoY
The BEA's Personal Income and Outlays report for February was published on this morning by the Bureau of Economic Analysis. The latest headline PCE price index was up 0.3% month-over-month (MoM) and is up 5.0% year-over-year (YoY). Core PCE dropped to 4.6% YoY, still well above the Fed's 2% target rate, and is up 0.3% MoM. All readings were below their respective Investing.com forecasts.
An Inside Look at the GDP Q4 Third Estimate
The accompanying chart is a way to visualize real GDP change since 2007 and uses stacked column chart to segment the four major components of GDP with a dashed line overlay to show the sum of the four, which is real GDP itself. Here is the latest overview from the Bureau of Labor Statistics.
Worried About Shadow Banking? Don’t Look at China
When we talk about shadow banking, we think of China, one of the world’s most indebted nations. Lending by companies that do not own a banking license has reached 50 trillion yuan ($7.3 trillion), or about 42% of gross domestic product, according to Moody’s Investors Service.
Elon Musk Wants to Pause AI? It’s Too Late for That
Elon Musk and an array of public figures have signed their names to an open letter that went viral this week, calling for a six-month pause on training language models more powerful than GPT-4, the technology underpinning ChatGPT.
Q4 Real GDP Per Capita at 2.0% Vs Q4 Real GDP at 2.6%
The third estimate for Q4 GDP came in at 2.6% a decrease from 3.2% for the Q3 third estimate. With a per-capita adjustment, the headline number is lower at 2.0%, a decrease from 2.7% for the Q3 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 (Q4 2022 third estimate) and initial jobless claims through 3/25.
March Regional Fed Manufacturing Overview
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 latest average of the five for March is -13.7, down from the previous month.
Weekly Heating Oil Prices: Down 6 Cents
The latest price of home heating oil nationwide dropped to its lowest price of the year at $4.07. The current price is down 6 cents from last week and down $1.05 compared to one year ago.
Insurance for All Bank Deposits Is a Manageable Cost
A group of conservative Republicans representatives known as the House Freedom Caucus came out last week against any proposal that would lift the cap on deposit insurance, currently set at $250,000. Members of US Congress on both sides of the aisle are understandably cautious about taking such a dramatic step in the middle of an unfolding crisis.
Want Safer Banks? Then Prepare for Slower Growth
Congress is asking the Federal Reserve and other financial regulators what went wrong at Silicon Valley Bank and why they didn’t see it coming. In due course, they’ll admit some mistakes, draw some lessons and tweak some rules.
Any Bank Can Fail; Don’t Panic
I’ve received more emails and calls from clients on the failure of SVB Bank than I did on the stock market crash in April of 2020. That tells me there is wide concern today about the stability of the economy and financial markets.
How to Reach Ideal Clients Through Engaging Messaging
The goal of marketing is to garner loyalty among existing clients while also attracting new ones to drive growth and profitability for your firm. To implement engaging messaging, follow these tips…
Proposed Bank Changes and Fed Comments
The Senate Banking Committee held a hearing to investigate the collapse of Signature Bank (SBNY) and Silicon Valley Bank (SIVB/SIVBQ) that brought to discussion possible changes for the entire banking system.
From Crisis Comes Opportunity
From the perspective of the U.S. stock market, 2022 was a miserable year (with the S&P 500 declining 19.4%), but until recently, 2023 was shaping up to be a stronger year.
Pending Home Sales Grew for Third Consecutive Month, Up 0.8% in February
The National Association of Realtors® (NAR) released the latest monthly data for its pending home sales index. According to the NAR, "Pending home sales grew in February for the third consecutive month."
Will FedNow Enable Greater Deposit Flight from Troubled Banks?
The failures of Silvergate Bank, Silicon Valley Bank, Signature Bank, and the current struggles of First Republic and Pacific West Bank have seen bank deposits flee to the perceived safety of large banks.
S&P Case-Shiller Home Price Index Continued Decline in January
With this morning's release of the January S&P Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index saw a 0.4% decrease month-over-month (MoM), higher than the Investing.com forecast of -0.5%, and a 2.6% increase year-over-year (YoY). After adjusting for inflation, the MoM was reduced to -1.1% and the YoY was reduced to -4.8%.
The Supreme Court May Quash Biden's Student Loan Forgiveness: Here's What Borrowers Should Do
For millions of borrowers, student loan forgiveness will mean the difference between significant relief and ongoing payments. If you’re among them, the question is… what next?
What Happens in the Banking Sector Won’t Stay There
The sudden loss of confidence by depositors in some US banks is causing many to focus on the scope for financial contagion and the needed policy responses. What should not be overlooked is the other, and slower, contagion channel in play — that involving enablers of economic growth...
What Most Advisors are Missing About SECURE 2.0 Act
The changes inside SECURE 2.0 range from new rules related to 529 college savings plans to when retirees should take their required minimum distributions (RMDs). With so much to sort through, advisors may be overlooking some of the details of the act.
Weekly Gasoline Prices: Regular and Premium Remain Steady
As of March 27, the prices of regular and premium gas were unchanged from last week. According to GasBuddy.com, Hawaii has the highest average price for regular at $4.78 and Mississippi has the cheapest at $2.96. The WTIC end-of-day spot price for crude oil closed at $72.81 and is up 7.4% from last week.
Richmond Fed Manufacturing Activity Improved Modestly in March
Fifth district manufacturing increased in March, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite manufacturing index is at -5 in March, up 11 from February. This is better than the Investing.com forecast of -10. Despite this month's increase, the latest 3-month moving average dropped by 2 from last month to -10.7, the lowest it has been since June 2020.
From A Deep Dive Into The Banking Sector
Beyond the near-term turmoil, there may need to be a re-evaluation of the regional banking model in the United States, according to a recent panel hosted by Stephen Dover, Head of Franklin Templeton Institute.
Consumer Confidence Increased Slightly in March
The Conference Board released its Consumer Confidence Index ® this morning, with the headline number coming in at 104.2, an increase of 0.8 from the upwardly revised final reading of 103.4 in February. This month's reading is better than the Investing.com forecast of 101.0.
FHFA House Price Index Up 0.2% in January, Beats Forecast
The Federal Housing Finance Agency (FHFA) has released its U.S. house price index (HPI) for January. U.S. house prices increased by 0.2% from the previous month. Year-over-year the index is up 5.3% on a non-seasonally adjusted nominal basis. After adjusting for inflation and seasonality, the real index is down 0.2% in January and down 0.3% year-over-year (seasonally adjusted).
The New Landscape for Growth Investing
Ignore short-term market moves and volatility. The biggest investment returns are driven by a handful of outliers in the long run. Growth investing is for patient capital seeking long runways for companies that will ultimately generate outsized returns for investors. Baillie Gifford is uniquely positioned as a global asset manager that is entirely owned by a private partnership. My guest today, Stuart Dunbar, has identified a few technologies that will be important in driving growth in sectors where we will see transformation in the years to come.
The Fundamental Logic of Annuities with Lifetime Income
A simple annuity can effectively replace bond holdings in a retirement plan that are earmarked to meet the lifetime spending goal. The question is why should a retiree hold any bonds in the portion of their asset base designed to cover ongoing retirement spending goals?
World Markets Update: March 27, 2023
Six of eight indexes on our world watch list posted gains through March 27, 2023. France's CAC 40 finished in the top spot with a YTD gain of 9.34%. Germany's DAXK finished second with a YTD gain of 8.33%, and Tokyo's Nikkei 225 moved to third with a YTD gain of 5.30%. India's BSE SENSEX finished last with a loss of 5.24% YTD.
The Fed Waffles
The Federal Reserve raised short-term interest rates by another quarter point on Wednesday.
The "Real" Goods on the February Durable Goods Data
The Census Bureau has posted its advance report on durable goods new orders for February. 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.
Silicon Valley Bank’s Failure Highlights Systemically Combustible Conditions
Many have questioned the importance of the recent bank failures.
First Quarter 2023 Economic Review and Forecast
The economic signals and a host of geopolitical risks confronting investors suggest that 2023 could be as challenging as 20022 for both stocks and bonds.
Dallas Fed Manufacturing: Business Conditions Continued to Worsen in March
The Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for March. The latest general business activity index came in at -15.7, down 2.2 from last month. The general business activity index has been in contraction territory since May of last year. The 3-month moving average is up 1.5 this month to -12.5, its lowest since June 2022. All figures are seasonally adjusted.
The Fed Faces Its Trilemma
The fallout from SVB will make the Fed's job more difficult.
From Anomaly to Opportunity: High Yields on Short Bonds
Stock and bond markets were shaken by the recent banking crisis in the US and Europe.
Fed Weighs Stubborn Inflation Against Banking System Stress
Slower credit growth may curtail broader U.S. economic growth, taking pressure off the Federal Reserve.
Recession Odds Rising
Recently I saw someone share a clip from their weather app. It said, “Rain expected at 3 pm,” right above a little graphic showing a 30% chance of rain at 3 pm. What’s wrong with that picture?
Is This The End Of The Petrodollar?
The U.S. dollar remains the world’s top reserve currency for now, though its share of global central banks’ official holdings has slipped in the past 20 years. By contrast, the yuan’s share of official holdings has more than doubled since 2016.
How Is the SVB and Credit Suisse Crisis Affecting the US and European Banking Industry?
Following recent efforts by central banks and regulators to alleviate the banking crisis, Franklin Templeton Institute’s Stephen Dover and Lukasz Kalwak discuss their thoughts on the implications and outlook for the banking industries in the United States and Europe.
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.
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.
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.
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.
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.