Economy

The Market Thinks the BoJ is In Play September 22, 2023

Posted by Steven Vannelli, CFA in Economy, Markets, News

The Bank of Japan met last night to cap off a week of central bank activity. From their policy statement: “The Bank decided, by a unanimous vote, to set the following guideline for market operations for the intermeeting period. The short-term policy interest rate: The…

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A Consumer Credit Cycle Has Begun September 05, 2023

Posted by Steven Vannelli, CFA in Economy, Markets

With government stimulus over, accumulated savings starting to become depleted, rents soaring, and student loans about to switch back on, it appears a credit cycle has begun where borrowers struggle to fulfill their financial commitments. In the charts below, we identify the overall delinquency rate…

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JOLTED: Job Openings Suggest Labor Pressures Abating August 29, 2023

Posted by Steven Vannelli, CFA in Economy

Today the monthly Job Openings and Labor Turnover survey came out for the month of July. Expectations were for 9.5 million job openings, but the actual figure came in at 8.87 million, representing the biggest miss in recent history. This miss is further evidence that…

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Dysfunction in China August 15, 2023

Posted by Steven Vannelli, CFA in Economy, Markets, News

Today was a disaster for Chinese economic data. In the table below, we can see that every single data point missed consensus expectations in the wrong direction. Activity undershot expectations across the board. Data for China has been trending down for most of the year,…

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BOE Doves Take Hawkish Stance June 23, 2023

Posted by Austin Mann in Economy, Markets

The Bank of England surprised market participants yesterday morning when they raised the Official Bank Rate by a full half point to 5.00%. The move caught traders off guard as the BOE had chosen to raise rates by only a quarter percentage point at each…

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Hanging Tough? AI Sentiment Shows Hawkish Fed June 22, 2023

Posted by Brian Clark in Economy, Markets, News

After yesterday’s testimony by Fed Chair Jerome Powell to the US House of Representatives I analyzed its sentiment on key issues compared to his previous four FOMC policy statements, using ChatGPT. The table below shows the results. Unsurprisingly, ChatGPT left the sentiment for both inflation…

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BoJ Taking it Easy June 21, 2023

Posted by Steven Vannelli, CFA in Economy, Markets, News

Today the minutes of the April 27-28, 2023, Bank of Japan meeting were released. Below in italics are the top ten highlights generated by our AI engine. The Bank of Japan (BoJ) has been conducting purchases of various financial instruments and providing funds without setting…

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More Misconceptions about Japanese Equities June 20, 2023

Posted by Tom Nemechek in Economy, Markets

Continuing last week’s discussion on the role of minority interest in Japanese equity returns, below we perform the same correlation test on universes of DM Americas and EMEA companies. To recap, we tested the following metrics, drawn from each company’s fiscal year-end reports and stated…

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Atlanta and Cleveland Have it Right on Inflation June 13, 2023

Posted by Steven Vannelli, CFA in Economy, News

Using our AI engine, we prompted a description of the Atlanta Fed’s Flexible CPI. What we got was a pretty decent explanation: “The Atlanta Fed Flexible Price Consumer Price Index (CPI) is a measure that is calculated from a subset of goods and services included…

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Two weeks ago, we noted that Congress would soon raise the debt ceiling, but that this could set up unexpected consequences for investors. Now that that the debt ceiling is raised until 2025, the US Treasury is free to fund the government’s liabilities since January….

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Best Part of Jobs Report June 05, 2023

Posted by Steven Vannelli, CFA in Economy, News

Of course, over 300,000 people getting new jobs is good unto itself, particularly for those with newfound opportunity. But, for the last several years, as the “great resignation” took hold, there were not many new workers coming into the workforce, leading to falling unemployment. This…

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U.S. Core PCE Inflation is Still Not Coming Down June 02, 2023

Posted by Brian Clark in Economy, News

In the United States, Core PCE Inflation is still 5.0% after a recent reversal in disinflation. This measure is followed by the Fed and excludes volatile food and energy inflation. It has remained elevated on an annualized quarterly basis, with a 1-year percent change of…

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