We are moving our first federal funds rate cut to September of this year compared to our current July call although we are going to get more information from Federal Reserve officials after the release of the Summary of Economic Projections and the new ‘dot plot’ on June 12.
Personal Consumption Expenditure (PCE) measures the price paid for goods and services by consumers. It reflects changes in consumer behavior and captures inflation (or deflation) across a wide range of consumer expenses. Prices for both goods and services are measured.
Why is there so much angst among investors? The mixed economic signals may have a lot to do with it.
Positive corporate earnings and greater participation from sectors other than technology carried stocks forward.
We connect the dots between the micro data points (what we learned during 1Q earnings season) and what we expect the forthcoming macro data will reveal about the state of the economy.
Survey after survey has been indicating that Americans feel worse off today compared to the recent past; so much so that many of them indicate the economy is currently in recession, that the rate of unemployment is the highest in several decades, that inflation is very high today, etc.
It’s natural to avoid loss, but sitting on the sidelines out of fear might lead to missed financial goals.
Market factors are constantly changing and require monitoring, analysis, and flexibility by the investors when it comes to choosing appropriate investments.
As we set our sights on the summer, here are five dynamics that could drive the financial markets between Memorial Day and Labor Day:
We are free trade enthusiasts, in economic terms, even at a time when free trade has been losing some of its aura within the U.S. political system.
As goes the consumer, so goes the U.S. economy. As Wall Street knows, the importance of the consumer cannot be overstated. That’s because consumer spending is the main engine of growth, representing ~70% of US economic activity – nearly 10% more of the economy than it did in the early 1980s.
To say that inflation data during the first quarter of the year surprised us and the markets is clearly an understatement and by Tuesday of this week, with the higher-than-expected Producer Price Index (PPI) print for April, markets were clearly on edge as they were also potentially expecting a higher reading for the Consumer Price Index (CPI) on Wednesday.
More than 338,000 Americans relocated for retirement last year – a 44% increase from 2022 – and about a quarter of those retirees moved to a different state.
The finance world can get complicated, especially for the passive or uninterested investor. Let’s face it, some of us are not curious about sports, movies, exercise, reading, or other things while others of us carry a passion for them.
Happy National Small Business Day! Every year on May 10, small businesses are officially recognized for their contributions to the US economy. And rightfully so. Small businesses are the backbone of the US economy.
Markets seem to have been basking in the spring sun as they wait for the approaching summer heat, so to speak.
A recap of the important drivers, along with our views on how things will play out over the rest of the year.
It can be easy to overthink the markets and it is human nature to try to out-guess, out-maneuver, or out-smart the average, but perhaps we can step back and simplify what seems to be occurring.
We try not to react to just one data point because, as we have always said, “a data point doesn’t a trend make.” Furthermore, we don’t know if this is just a one-time event or if it is the start of something more.
The Federal Reserve is looking for more confidence that inflation is headed back towards its 2% target before commencing with rate cuts.
The S&P 500 experienced its first 5% pullback since October 2023, but the long-term outlook remains positive.
One of the main advantages of constructing a portfolio of individual bonds is that it can be customized to meet the precise needs, wants, and objectives of the investor
The reaction from markets to the release of Q1 2024 real GDP results has given every sector of the market another chance to give their own interpretation of what is coming regarding Federal Reserve (Fed) policy, inflation, and the federal funds rate.
Discover the reasons investors diversify their portfolio with alternative investments.
Timing has never been a crucial undertaking for fixed income allocations dedicated to asset preservation largely because this is a long-term endeavor dedicated to keeping an investor’s wealth intact.
We put the recent market movements in perspective, which have been driven by time (it has been a while since we had a 5%+ pullback), overly optimistic, complacent market sentiment, and higher Treasury yields amid persistent inflationary pressures and signs of a more patient Fed.
The impact of high inflation on individuals’ finances is not something to take lightly, especially in the U.S., because for almost 40 years we have had no experience with such an event and have no clue how to deal with it or how to try to minimize its negative impact.
For a typical consumer, the two most hot-button topics are food and energy. Both play a significant role in household spending, and just as importantly, both are highly visible.
Fed Funds Rate: According to Bloomberg calculations based on where Fed Funds futures are currently trading, there is a 20% chance that the FOMC cuts the overnight rate in June and a ~50% chance that they cut in July.
Growth and inflation have remained remarkably resilient since the start of the year, causing the market to once again rethink the Fed’s rate path. As a result, the odds of a June rate cut have collapsed
Before we start discussing the Consumer Price Index again, we want to remind readers that CPI inflation is not what Federal Reserve officials use to determine monetary policy. It is true that markets put a lot of emphasis on this measure, but we would like to caution giving too much importance to it.
Senior Investment Strategist Tracey Manzi notes that with a Federal Reserve easing cycle on the horizon, the fixed income markets are relatively attractive.
This week’s discussion is a follow-up to last week’s overview of the elongation of the economic cycle.
While artificial intelligence and new technologies have captured the market's attention, this quarter we reminisce about the good old days and a key piece of technology that has endlessly entertained us all – classic video games.
Can Federal Reserve (Fed) officials live with such a strong labor market and still start lowering interest rates in June or July?
We are normally reluctant to use trendy phrases to explain either our good and/or bad calls regarding the U.S. economy. However, saying that ‘this time is different’ is more than fitting today to understand what has happened to the U.S. economy since the recovery from the COVID-19 pandemic.
Market rally driven by a broadening of the market and optimism that the Federal Reserve will deliver rate cuts later this year.
With technology changing the way we live, we are taking a trip down memory lane to look back at a piece of technology that has entertained generations: classic video games.
For lack of a better word, the fixed-income mantra is getting stale. Interest rates have peaked, and they remain at elevated levels, allowing investors to take advantage of higher income and ample cash flow opportunities.
The Federal Open Market Committee (FOMC) comprises the Federal Reserve System’s decision-makers on monetary policy in the United States. This monetary policy is designed to keep the Fed’s dual mandate of maximum employment and price stability in line with targets.
Larry Adam takes stock of how the economy and markets have performed since the beginning of the year and take a fresh look at where we are heading as we progress through the year.
Markets have taken the Federal Reserve (Fed) decision to keep about 75 basis points (bps) cuts in its dot plot as a very positive sign that the Fed is going to actually cut 75 bps during the year and are still acting upon the news.
The central bank will look to cut interest rates three times by the end of 2024.
Doug Drabik discusses fixed income market conditions and offers insight for bond investors.
Do you know that the headline Personal Consumption Expenditures (PCE) was 2.4% in January while the core PCE was 2.8%? This is very close to the 2% target.
With the U.S. economy posting two consecutive quarters of 3%+ GDP growth, recession calls have quieted down.
For many investors, fixed income is intended to serve as the ballast of a portfolio. This means that it hopefully provides stability in turbulent times while providing consistent and known income, cash flow, and return of principal.
Sometimes, and February was one of those times, the information on the U.S. labor market doesn’t make sense. Many argue that government agencies are cooking the books.
The move higher in the S&P 500 has been historic. In fact, the S&P 500 has climbed ~17% over the last four months and is on pace to rally 17 of the last 19 weeks.
Recessions are part of the economic cycle. No one looks forward to a recession because of the pain it can impose on investors or worse, job security.
