• Ten Year Treasuries touched 5% on October 19th, up 1.43% since Jan 1. • Two-year rates exceed ten-year rates in July of 2022 (yield curve inversion). • In the past, yield curve inversion has always signaled recessions. • The recessions typically have occurred 18-24 months after inversion. Over the course of the past months, […] Read the full article…
Stock market uncertainty is as high as I can ever recall. The pandemic, economic shut-down and civil unrest have all hit at the same time. Still, the US stock market is within 5% of it’s all-time high from February. How can this be possible? Puzzling. Let’s break it down. Below I outline the top 3 […] Read the full article…
• The Fed cut rates for the third time since July on Wednesday • The target lending rate is now 1.5% – 1.75% • In the last four times the Fed cut rates, when they stopped at three cuts the economy avoided recession As expected by the market, the Fed cut rates again today. Jerome […] Read the full article…
• Manufacturing signals remain weak • Jobs and consumer confidence remain positive • Phase 1 China trade deal gave market a boost • Overall, GDP growth has slowed but remains persistently positive for now We started October with a flurry of economic reports. The reports have been mixed and the result has been a choppy […] Read the full article…
The financial press and markets don’t like the inverted yield curve By itself, the inverted yield curve is a weak predictor for near term recession Credit markets, employment, and production factors should be considered The yield curve model is predicting 20% chance of recession while the more complete model is projecting recession risk in the […] Read the full article…
• The Federal Reserve is expected to cut rates .25% on Wednesday • The US economy showed better than expected growth in Q2 at 2.1% • Still, the Federal Reserve is concerned about slow global growth and trade tensions and will likely make a preemptive cut to keep the economy on track. The Federal Reserve […] Read the full article…
• Initial jobless claims for the week ending April 6 fell to 196,000 • Unemployment claims are a leading indicator for the economy • March non-farm payroll was solid with 196,000 new jobs created Some economists had feared that weak jobs data in February may have been signaling a weaker economy. However, job creation in […] Read the full article…
• Gundlach thinks recession signals are close, but not signaling recession right now. • Interest rates are a wild card as the Fed switches from ‘pragmatic’ to ‘put’ mode. • Gundlach thinks European equities are a value trap. He likes emerging markets (still). • His strongest warning was to avoid junk bonds and beware of […] Read the full article…
One of the most common questions I get asked is along the lines of, ‘what do you look at to figure out if the market will go down?’. We can’t say with certainty any month will be up or down. The main problem is timing. Let’s take a simple example. Stock market PEs peaked above […] Read the full article…
Jeff Gundlach, CEO of DoubleLine Capital, covered his outlook for the markets in his annual webcast on Tuesday. The webcast covers a wide range of topics including the economy, inflation, interest rates and fixed income and equity market outlooks. He presents dozens of slides to illustrate and back his convictions. I’ll highlight his key forecasts […] Read the full article…
According data from the Conference Board released November 28, consumer confidence rose sharply in November and has reached its highest level since November 2000. The reading for November came in at 129.5 (1985 = 100). “Consumer confidence increased for a fifth consecutive month and remains at a 17-year high (Nov. 2000, 132.6),” said Lynn Franco, […] Read the full article…
The interest rate yield curve continues to flatten. US stock prices continue to melt up. PE ratios have stretched into mildly overvalued territory. We remain neutral weighted on the US stock market and may adjust tactical allocations down if the PE ratio stretches much further. Interest Rates The Federal Reserve, as expected, hiked the Fed […] Read the full article…
Larry Fink is Chairman and CEO of Blackrock, the world’s largest investment management company with over $5.4 trillion in assets including iShares ETF products. He spoke late last month at Morningstar’s Investment Conference and discussed a wide range of issues including the state of the US economy, the state of active and passive investing, and […] Read the full article…
Jeff Gundlach, CEO of DoubleLine Capital, spoke about his views on the US economy and global markets in his Tuesday webcast “Just Markets”. I’ll highlight some of his key points. Interestingly, Gundlach was one of a very few investment professionals who predicted a Trump win. He has a pretty strong track record on his market […] Read the full article…
According to the Morningstar Direct U.S. Asset Flow Update published June 15th, US taxable bond funds had a net inflow of $15.4 billion in May. The report indicates that flows for bond funds were mostly negative last year. Beginning in February this year, flows turned positive after the market volatility in January. The report also […] Read the full article…
Given recent market volatility, I had a number of questions come up in conversations with clients. For this Market Outlook, I decided that a Questions and Answers format might be useful. Why are the Equity Markets Volatile? The S&P500 stock index total return is down 2.9% year to date. I think for a lot of […] Read the full article…
I recently listened to an excellent podcast on Bloomberg’s ‘Masters in Business’ series with economist Ed Hyman (podcast). Ed Hyman is chairman of ISI Evercore and has been voted Wall Street’s top economist by Institutional Investor for 35 consecutive years. Ed was discussing the prospects for the economy. Historically, we have seen economic business cycles […] Read the full article…
Did the Fed Depress the US Economic Recovery? In a recent blog post Dr. Ed Yardeni, a noted economist, opined that the Federal Reserve contributed to depressed economic recovery in the US. He cited three very interesting arguments and I thought it may be of interest to summarize his thoughts here. (source: www.blog.yardeni.com May 26, […] Read the full article…
Today the Department of Labor released jobs data for March indicating that the US economy added just 126,000 jobs in March. For 2015, the US has averaged under 200,000 new jobs per month in contrast to the 289,000 monthly average in Q4. The ISM release earlier this week reported a PMI figure of 51.5% for […] Read the full article…