Chief Economist Eugenio J. Alemán discusses current economic conditions.
The GMO Focused Equity team has evaluated banks in the context of our Quality Strategy for 20 years, using both quantitative and fundamental analysis to invest in high-quality banks with healthy financials and in our opinion responsible management practices.
Yesterday, the Fed raised its benchmark interest rate 25 basis points to a 4.75%–5.0% range and signaled that one more hike is likely this cycle.
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.
Yesterday, the Fed completed its regular meeting and announced that it would increase interest rates by 25 bps, or a quarter percentage point.
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.
Financial markets seem to have returned to trying to time a dovish Federal Reserve turn, but Franklin Templeton Fixed Income CIO Sonal Desai says with a tight labor market and inflation running at 5%-6%—don’t bank on it.
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.
In a closely watched decision, the Fed lifted its benchmark lending rate by 25 basis points to a range of 4.75% to 5% at the conclusion of its March policy meeting.
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.
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.
Both the leading indicators of growth and liquidity continue to suggest growth will slow as 2023 progresses.
U.S. stocks climbed for a second straight day Tuesday, with the tech-focused Nasdaq Composite ending near a five-week high, as jitters over bank instability eased.
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.
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.
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.
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.
Markets have been trading as if the end of the world is at hand – but what most participants see, behind the recent financial turmoil and contagion fears, is a still-strong US economy, the MLIV Pulse survey shows.
The late great Supreme Court Justice Antonin Scalia was often in dissent in key legal cases during his long career.
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.
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.
With the collapse of Silicon Valley Bank, questions of potential “bank runs” spread among regional banks.
Could the consensus view of a “no recession” scenario be wrong? As portfolio managers, this is the question we ask ourselves daily.
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.
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.
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%.
GMO 7-year Asset Class Forecast: 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.
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 market gyrations are not rooted in a banking crisis, but in financial cracks from rapid rate hikes.
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.
Is upheaval in the banking sector the prelude to a financial crisis, or just the biggest bump yet on the road to restoring order to the economy? Stock investors clinging to hopes this too shall pass are having their tolerance for pain severely tested.
Although the dust has not yet settled, we think it’s a good time to pause and consider the implications of the recent Silicon Valley Bank (SVB) collapse.
Financial market volatility has followed the collapse of Silicon Valley Bank. Stephen Dover, Head of Franklin Templeton Institute, shares his thoughts on possible implications outside the United States.
What our experts think about today's market action.
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.
Advisors are increasingly using annuities when they determine that it is in their clients’ best interests. They recognize that it is a client’s income – not their wealth – that matters in retirement, and annuities are the only way to provide a longevity-protected income solution. Rising inflation and uncertainty over high market valuations have made the need to secure lifetime income more acute, and rising interest rates have made annuities more affordable.
Here to discuss how to help clients and prospects determine if an annuity is a good fit for their financial needs are three members of the Protective Life team: Lori Marino, Tom Sullivan and Mark Berwanger.
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%.
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.
The failure of Silicon Valley Bank raises questions for Fed policy and economic growth.
Government debt yields plunged globally as mounting financial-stability concerns prompted bond traders to abandon bets on additional central-bank rate hikes and begin pricing in cuts by the Federal Reserve.
101 Lesson of Structural growth versus recovery growth investing.
Bridgewater Associates founder Ray Dalio warned Silicon Valley Bank’s failure shows cracks widening in global finance, joining other US billionaires raising the alarm on fallout from the lender’s collapse.
Headline CPI came in today as expected at 0.4%, however core inflation (ex food and energy) came in slightly higher at 0.5% versus the estimated 0.4% increase.
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%.
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.
The new SECURE Act 2.0 (Setting Every Community Up for Retirement Enhancement Act) seeks to make it easier for U.S. taxpayers to save for retirement and expands access to retirement plans.
Investors are zeroing in on key parts of the market for short-term dollar borrowing to determine if and how signs of systemic stress might be emerging after the biggest US bank collapse in over a decade.
Some of the world’s top money managers are sitting on a windfall after the collapse of Silicon Valley Bank spurred the biggest rally in US Treasuries since the early 1980s.
An acceleration in monthly core consumer prices seems likely to reinforce the Federal Reserve’s determination to raise interest rates to fight inflation, though the decision on next week’s move will be a tough call amid ongoing concern about financial turmoil.
Regulators' prompt response and the creation of a new lending facility should limit broader market fallout from recent bank failures, notes Chief Investment Officer Larry Adam.
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).
The high-profile collapse of Silicon Valley Bank last week is a story about bad debt, just not in the way most people think.
Federal Reserve Chair Jerome Powell’s strategy to speed up the central bank’s inflation-fighting efforts is unraveling in the wake of Silicon Valley Bank’s collapse.
Your clients need a hero – one who can help them navigate the uncertain world and keep them on track to living their best lives no matter what circumstances they face. That hero should be their financial advisor.
Senior Sovereign Analyst Jon Levy shares his analysis of the European Central Bank’s plans to unwind its largest quantitative policy measure, how it could affect markets and how it compares to previous policy changes.
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?
Here is some research on why our clients built a sizable portfolio while others had high income but little savings. I’ll address specifics on how to get savers to enjoy their money.
US authorities took extraordinary measures to shore up confidence in the financial system after the collapse of Silicon Valley Bank, introducing a new backstop for banks that Federal Reserve officials said was big enough to protect the entire nation’s deposits.
U.S. stocks are extending last week's sharp declines that have come amid worries regarding the ultimate impact on the banking sector of the recent collapses of SVB Financial and Silvergate Capital.
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.
Here’s an update on the latest news involving Silicon Valley Bank and the implications for the Fed and markets, from Stephen Dover, Head of Franklin Templeton Institute.
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.
Inflation
Growth in Real Money Supply is What is Important for Taming Inflation, and for the Fed
Chief Economist Eugenio J. Alemán discusses current economic conditions.
Echoes Of '08? Don't Bank On It
The GMO Focused Equity team has evaluated banks in the context of our Quality Strategy for 20 years, using both quantitative and fundamental analysis to invest in high-quality banks with healthy financials and in our opinion responsible management practices.
With Banks in Focus, the Fed Signals (Cautious) Optimism
Yesterday, the Fed raised its benchmark interest rate 25 basis points to a 4.75%–5.0% range and signaled that one more hike is likely this cycle.
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.
Market Focus Moves from the Fed to Financial Crisis
Yesterday, the Fed completed its regular meeting and announced that it would increase interest rates by 25 bps, or a quarter percentage point.
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.
Don’t Bank On It
Financial markets seem to have returned to trying to time a dovish Federal Reserve turn, but Franklin Templeton Fixed Income CIO Sonal Desai says with a tight labor market and inflation running at 5%-6%—don’t bank on it.
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.
March Fed Rate Hike: Sometimes the Moments That Challenge Us the Most Define Us
In a closely watched decision, the Fed lifted its benchmark lending rate by 25 basis points to a range of 4.75% to 5% at the conclusion of its March policy meeting.
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.
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.
The Growth Slowdown Is Not Over Yet
Both the leading indicators of growth and liquidity continue to suggest growth will slow as 2023 progresses.
Stocks Climb Ahead of Fed Meeting
U.S. stocks climbed for a second straight day Tuesday, with the tech-focused Nasdaq Composite ending near a five-week high, as jitters over bank instability eased.
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.
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.
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.
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.
US Economy Has Investor Backing as Bank Risks Grow
Markets have been trading as if the end of the world is at hand – but what most participants see, behind the recent financial turmoil and contagion fears, is a still-strong US economy, the MLIV Pulse survey shows.
Heading Toward a National Bank?
The late great Supreme Court Justice Antonin Scalia was often in dissent in key legal cases during his long career.
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.
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.
Bank Runs. The First Sign The Fed “Broke Something.”
With the collapse of Silicon Valley Bank, questions of potential “bank runs” spread among regional banks.
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.
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.
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.
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%.
GMO 7-year Asset Class Forecast: February 2023
GMO 7-year Asset Class Forecast: February 2023
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.
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.
No 2008 Redux, But Recession Coming
The market gyrations are not rooted in a banking crisis, but in financial cracks from rapid rate hikes.
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.
Crisis Narrative Forcing Out All Others in Bank-Obsessed Markets
Is upheaval in the banking sector the prelude to a financial crisis, or just the biggest bump yet on the road to restoring order to the economy? Stock investors clinging to hopes this too shall pass are having their tolerance for pain severely tested.
SVB Failure: The Impact on Private Credit
Although the dust has not yet settled, we think it’s a good time to pause and consider the implications of the recent Silicon Valley Bank (SVB) collapse.
Banks and the Butterfly Effect—the Global Ramifications
Financial market volatility has followed the collapse of Silicon Valley Bank. Stephen Dover, Head of Franklin Templeton Institute, shares his thoughts on possible implications outside the United States.
Bank Worries Strike Again
What our experts think about today's market action.
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.
How to Frame Client Discussions About Lifetime-Income Solutions
Advisors are increasingly using annuities when they determine that it is in their clients’ best interests. They recognize that it is a client’s income – not their wealth – that matters in retirement, and annuities are the only way to provide a longevity-protected income solution. Rising inflation and uncertainty over high market valuations have made the need to secure lifetime income more acute, and rising interest rates have made annuities more affordable.
Here to discuss how to help clients and prospects determine if an annuity is a good fit for their financial needs are three members of the Protective Life team: Lori Marino, Tom Sullivan and Mark Berwanger.
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%.
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.
Bank Failures and the Fed
The failure of Silicon Valley Bank raises questions for Fed policy and economic growth.
Fed Traders Price In 100 Basis Points of Rate Cuts From May Peak
Government debt yields plunged globally as mounting financial-stability concerns prompted bond traders to abandon bets on additional central-bank rate hikes and begin pricing in cuts by the Federal Reserve.
Chinese Internet – the Boom and Bust Story
101 Lesson of Structural growth versus recovery growth investing.
Ray Dalio Warns SVB’s Collapse Shows Cracks Widening in Global Finance
Bridgewater Associates founder Ray Dalio warned Silicon Valley Bank’s failure shows cracks widening in global finance, joining other US billionaires raising the alarm on fallout from the lender’s collapse.
CPI Confirms Fed is Close to Stopping
Headline CPI came in today as expected at 0.4%, however core inflation (ex food and energy) came in slightly higher at 0.5% versus the estimated 0.4% increase.
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%.
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.
SECURE 2.0: Top 5 Items to Discuss with Your Clients
The new SECURE Act 2.0 (Setting Every Community Up for Retirement Enhancement Act) seeks to make it easier for U.S. taxpayers to save for retirement and expands access to retirement plans.
What to Watch in Money Markets for Signs of Systemic Bank Stress
Investors are zeroing in on key parts of the market for short-term dollar borrowing to determine if and how signs of systemic stress might be emerging after the biggest US bank collapse in over a decade.
Fidelity, Schroders Win Big on Treasuries Bets as Markets Swoon
Some of the world’s top money managers are sitting on a windfall after the collapse of Silicon Valley Bank spurred the biggest rally in US Treasuries since the early 1980s.
Fed Rate Pause Is a Tough Call After Inflation Reaccelerates
An acceleration in monthly core consumer prices seems likely to reinforce the Federal Reserve’s determination to raise interest rates to fight inflation, though the decision on next week’s move will be a tough call amid ongoing concern about financial turmoil.
Recent Bank Failures a Potential Game-Changer for The Fed
Regulators' prompt response and the creation of a new lending facility should limit broader market fallout from recent bank failures, notes Chief Investment Officer Larry Adam.
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).
Treasuries: "Risk Free" or "Risk Unlimited"?
The high-profile collapse of Silicon Valley Bank last week is a story about bad debt, just not in the way most people think.
Fed’s Battle Plan for Inflation Shredded by Financial Turmoil
Federal Reserve Chair Jerome Powell’s strategy to speed up the central bank’s inflation-fighting efforts is unraveling in the wake of Silicon Valley Bank’s collapse.
Be the Superhero Your Clients Deserve
Your clients need a hero – one who can help them navigate the uncertain world and keep them on track to living their best lives no matter what circumstances they face. That hero should be their financial advisor.
Can the ECB Teach an Old Dog New Tricks?
Senior Sovereign Analyst Jon Levy shares his analysis of the European Central Bank’s plans to unwind its largest quantitative policy measure, how it could affect markets and how it compares to previous policy changes.
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?
How to Get Clients to Spend More Money
Here is some research on why our clients built a sizable portfolio while others had high income but little savings. I’ll address specifics on how to get savers to enjoy their money.
Fed’s New Backstop Shields Banks From $300 Billion of Losses
US authorities took extraordinary measures to shore up confidence in the financial system after the collapse of Silicon Valley Bank, introducing a new backstop for banks that Federal Reserve officials said was big enough to protect the entire nation’s deposits.
Stocks Remain Under Pressure as Banking Worries Remain
U.S. stocks are extending last week's sharp declines that have come amid worries regarding the ultimate impact on the banking sector of the recent collapses of SVB Financial and Silvergate Capital.
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.
Silicon Valley Bank Failure Ripples Through the Market
Here’s an update on the latest news involving Silicon Valley Bank and the implications for the Fed and markets, from Stephen Dover, Head of Franklin Templeton Institute.
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.