Slower Growth, Inflation, the Fed, and End of Cycle Indicators
The U.S. economy itself appears to be doing well, but we see many end of cycle signs, including less than 4% unemployment, rising interest rates, emerging consumer inflation, a strained housing market, slowing growth worldwide, and huge instability now developing in the emerging market space. Economy Still Healthy The 0.8% rise in retail spending in […]
Don’t be Fooled: Complacency is a Danger to Investors
The U.S. economy itself appears to be doing well, but we see many end of cycle signs, including less than 4% unemployment, rising interest rates, emerging consumer inflation, a strained housing market, slowing growth worldwide, and huge instability now developing in the emerging market space including Argentina, Turkey, Brazil, Indonesia, and Thailand. However, what scares […]
2018 Preview and Assessment
Market valuations are high. Current consumption is being financed by debt. The housing data is mildly positive, but has been impacted by “rebuild” issues in the wake of natural disasters. Corporate balance sheets are strong and laden with cash. The world’s major economies are doing well and central banks are beginning to tighten policy led […]
Q4: A Look at the Post-Hurricane Economy
As Q3 ended, the economy continued on its tepid growth path. Unknown is the value of the economic carnage of two hurricanes that hit the mainland and a third that completely devastated Puerto Rico. The bond and foreign exchange (FX) markets have a sense that all is not well, but, the equity indexes haven’t yet […]
Will the Fed Cause Another Recession?
The Fed raised the Federal Funds Rate by 25 basis points (a quarter of a percentage point) to 1.0%. This is the anchor rate on the yield curve, and, most other rates respond to it, with shorter rates today responding more than longer rates. It appears from their communications that they intend to hike rates […]
Market Melt-Up: Caution – Sentiment in Nosebleed Territory
Since my last column, the Dow Jones Industrial Average (DJIA) did indeed hit 20,000 and has since gone well beyond. Most of the post-election run-up initially appeared to have occurred in the November 8th to December 20th period when the index went from 18,333 to 19,975, a rise of 1,642 points (7.9%). Over the next […]