Computer-Driven Hedge Funds Surge Ahead Amid Chaotic Markets
A $200 billion corner of the hedge funds industry dominated by computer-driven algorithms has been making the most of wild swings in global markets, putting many of those funds on course for a record year of gains.
Biden’s Fight Against Inflation Is Failing Homeowners
The causes of inflation can be hard to isolate, but in the US at least, one culprit is clear: President Joe Biden and congressional Democrats spent too much in the last two years, and even now refuse to take steps that would ease the problem.
ISM Services Inches Down in September
The Institute of Supply Management (ISM) has now released the September Services Purchasing Managers' Index (PMI). The headline Composite Index is at 56.7 percent and is down 0.2 from 56.9 last month. Today's number came in above the Investing.com forecast of 56 percent.
September S&P Global Services PMI: Business Activity Growth Under Pressure
The September US Services Purchasing Managers' Index conducted by S&P Global came in at 49.3 percent, up from the final August estimate of 43.7 and in contraction territory.
Is anyone shopping or in an office? How to approach real estate in a rapidly changing economy
In a world of increasing economic uncertainty paired with the U.S. Federal Reserve’s hawkish stance on interest rates, is there a place in my portfolio for private real estate? Is the diversification and inflation mitigation that real estate investing has provided historically still relevant? Since 1983, Invesco Real Estate has navigated multiple real estate and economic cycles. These cycles have been accompanied by incredible technological innovation and major demographic shifts in living and lifestyle.
US Retirement Legislation And Regulation Bulletin: Third Quarter 2022
On August 16th, President Joe Biden signed the Inflation Reduction Act into law, ending months of uncertainty over whether congressional Democrats would ever reach agreement on a compromise budget reconciliation bill.
Weekly Gasoline Price Update
As of October 3, the price of Regular and Premium were up 7 and 12 cents, respectively, from the previous week. According to GasBuddy.com, California has the highest average price for Regular at $6.31 and Mississippi has the cheapest at $3.03. The WTIC end-of-day spot price closed at 83.63 and is up 9% from last week.
We Should All Cheer the Return of Company Profits
Trying to forecast inflation is a hazardous occupation when there's so much volatility in markets, supply chains and energy prices. But we can get some sense of where inflation is likely to go by tracking the profit margins of companies that make goods and services that go into the consumer prices basket.
CPI and PCE: Two Measures of Inflation and Fed Policy
The BEA's Core Personal Consumption Expenditures Chain-type Price Index for August, released recently, shows that core inflation is above the Federal Reserve's 2% long-term target at 4.91%. The August Core Consumer Price Index release is currently higher, at 6.32%. The Fed is on record as using Core PCE data as its primary inflation gauge.
Gold Extends Its Rally as Treasury Yields Continue to Retreat
Gold climbed higher, helped by a continued decline in Treasury yields, as traders weighed concerns that central banks’ monetary tightening will lead to recession and the possibility that bond rates may have reached a peak.
September S&P Global US Manufacturing PMI™: Slowing Improvement
The September S&P Global US Manufacturing PMI™ came in at 52.0, up 0.5 from the final August figure. S&P Global US Manufacturing PMI™ is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction.
Global Stocks Pin Hopes of Year-End Rally on Earnings Resilience
Investors are primed for any bit of good news to help them forget a brutal quarter for stocks that took this year’s value destruction to $24 trillion. A resilient corporate earnings season might give them that.
Runaway Bear Market Blows Past Everything Meant to Slow It Down
Unwavering profit projections. Benign chart patterns. Big hedges in the options market. All the things that bulls expected to put a brake on the worst equity selloff in 30 months have just summarily failed.
Navigational Tools to Lead Clients Through Volatility
With investors feeling anxious and looking for answers in these volatile and uncertain economic times, advisors should stick to a basic roadmap to help clients stay the course. Here are four ways advisors can do that.
SPONSORED Fed’s Inflation Fight Likely to Persist
The cost of goods may be peaking, but the rising cost of services clouds the inflation outlook. In our view, the Fed’s fight with inflation is far from over and will likely continue to be a headwind for the economy and equity markets. Therefore, our outlook remains cautious, and our Asset Allocation Committee is underweight stocks relative to bonds.
Hurricane Ian Highlights the Importance of Flood Insurance, a Hedge on Your Investment
Just 18.5% of homes in Florida counties that were told to evacuate have coverage through the National Flood Insurance Program (NFIP), which is administered by FEMA. Most regular homeowners’ insurance policies don’t cover flood damage, which is why Congress created the NFIP in 1968. But at an average cost of $995 a year, according to Forbes, the insurance may be out of reach to many households.
Airlines Had a ‘Revenge Travel’ Summer. The Stocks Went Nowhere
Airlines enjoyed a hot summer, as “revenge travel” and soaring fares lifted the companies. But investors have been reluctant to get on board as recession fears cloud the outlook, leaving the stocks languishing.
Now Comes the Hard Part
Surveying the current condition of the financial markets, we presently observe a combination of still historically-extreme valuations, rising yet still only normalizing interest rates, measurably inadequate risk-premiums in both equities and bonds, and ragged, unfavorable market internals, suggesting continued risk-aversion among investors.
Apple’s Tech Supply Chain Shows Difficulty of Dumping China
American companies have had a growing list of reasons to downgrade their ties with China in recent years. Former President Donald Trump’s tariffs. Beijing’s stringent Covid lockdowns. The US-Sino standoff over Taiwan. Political pressure to “friend-shore” supply chains toward nations aligned with Washington. But breaking up, as the adage goes, is hard to do.
PCE Price Index: August Headline at 6.25% YoY
The BEA's Personal Income and Outlays report for August was published this morning by the Bureau of Economic Analysis. The latest Headline PCE price index was up 0.29% month-over-month (MoM) and is up 6.25% year-over-year (YoY). Core PCE (YoY) is now at 4.91%, well above the Fed's 2% target rate.
Real Disposable Income Per Capita Creeps Up in August
With the release of this morning's report on August'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 0.33% month-over-month change in disposable income comes to 0.05% when we adjust for inflation. This is generally a decrease from last month's 0.31% nominal and 0.42% real change. The year-over-year metrics are 1.19% nominal and -4.76% real.
Brainard Says Fed Committed to Avoiding Pulling Back Early
Federal Reserve Vice Chair Lael Brainard said the US central bank will need to keep interest rates high for some time to bring inflation down, even as she acknowledged the need to watch global financial-stability risks from rising borrowing costs.
The Big Four: Real Personal Income in August
Personal Income (excluding Transfer Receipts) in August rose 0.35% and is up 6.8% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, Real Personal Income (excluding Transfer Receipts) MoM was up 0.07%. The real number is up 0.6% year-over-year.
Debt & Why The Fed Is Trapped
The massive debt levels provide the single most significant risk and challenge to the Federal Reserve. It is also why the Fed is desperate to return inflation to low levels, even if it means weaker economic growth.
Q2 Real GDP Per Capita: -0.8% Versus the -0.6% Headline Real GDP
The Third Estimate for Q2 GDP came in at -0.6% (-0.58% to two decimals), down from -1.6% (1.57% to two decimals) in Q1 2022. With a per-capita adjustment, the headline number is lower at -0.80% to two decimal points.
Bond Markets Are Nearing a Painful Inflection Point
This week’s bond meltdown has sent the mean 10-year borrowing cost for Group of Seven countries to its highest in more than a decade, with the average yield surging above 3%. What happens next could set the tone for financial markets and the global economy for years to come.
The Untold Story of Convertible Bonds
There is no relief in sight. The market remains volatile. Both equity and fixed-income assets are taking a beating as investors grapple with 40-year-high inflation and the Federal Reserve’s attempts to rein it in. My next guest says there is potential upside in this tumultuous market. He claims high volatility has historically had positive effect on a little-known class of bonds known as convertibles. He will explain why adding convertible bonds to your portfolio is a smart move as we weather this financial storm.
It’s Infrastructure’s Time to Shine. Here’s What Investors Should Know About the Asset Class.
As the U.S. CPI data continues to rise, Charles Hamieh, Portfolio Manager at ClearBridge Investments, dives into the opportunity present for investors looking at the infrastructure space as an inflation hedge moving forward.
Middle-Class Hourly Wages as of August 2022
We've updated this series to include the August release of the Consumer Price Index as the deflator and the monthly employment update. The latest hypothetical real (inflation-adjusted) annual earnings are at $46,918, down 8.8% from 45-plus years ago. Hourly earnings are below their all-time high after adjusting for inflation.
July S&P/Case-Shiller Home Price Index: Down ~1% YoY Inflation Adjusted
With this morning's release of the July S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index saw a 0.44% decrease month over month. The non-seasonally adjusted national index saw a 16% YoY increase. This is reduced to -0.86% after adjusting for inflation.
New Home Sales Jump 28% in August
This morning's release of the August New Home Sales from the Census Bureau came in at 685K, up 28.8% month-over-month from a revised 532K in July. The Investing.com forecast was for 500K. The median home price is now at $437K.
Lowly T-Bills Are Suddenly Sexy. Yes, Treasury Bills!
If a long, ugly recession is in fact going to happen later this year, many investors will want to shift some additional money into cash. There’s good news: In July, yields on many cash-like investments, which means they're virtually risk-free and liquid, started soaring.
Everything-Selloff on Wall Street Deepens on 98% Recession Odds
Monday brought a stark warning for Wall Street daredevils: Stocks are still in free fall and bearish sentiment is far from getting exhausted -- especially with hawkish central bankers rattling recession-obsessed markets like this.
Consumer Confidence Improved in September
The headline number of 108 was an increase of 4.4 from the final reading of 103.6 for August.
Municipal Markets Continue To Feel The Pressure This Year, Yet Fundamentals Remain Stable
The municipal bond market has not been immune to bouts of volatility hitting the markets this year, but there are still pockets of opportunity, according to Franklin Templeton Fixed Income’s Director of Municipal Bonds, Ben Barber.
Buffett Indicator Says Markets Are Going To Crash?
Stocks are far from cheap. Based on Buffett’s preferred valuation model and historical data, return expectations for the next ten years are as likely to be negative as they were for the ten years following the late ’90s.