Economy

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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There is Something Rotten in China May 22, 2023

Posted by Steven Vannelli, CFA in Economy, Markets

One metric I look at fairly often for various countries is the relationship between the performance of stocks vs. bonds. The idea is straightforward enough: when stocks are outperforming bonds, it tends to be associated with a growing economy. When bonds are outperforming stocks, it…

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Mid-Quarter Update: Tightening Credit May 17, 2023

Posted by Steven Vannelli, CFA in Economy, News

Credit conditions are tightening in both Europe and the United States. Our analysis follows in our mid-quarter update, Tightening Credit. ​​​​Prefer to download this presentation in PDF? Please click here.   1. Summary -Credit conditions in both Europe and the United States tightened significantly recently….

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China’s Soft Reopening May 11, 2023

Posted by Steven Vannelli, CFA in Economy, Markets

China reported year-over-year inflation last night at just 0.1%, 0.2% lower than expectations. Clearly China’s reopening is not creating price pressures, which brings the strength of the reopening into some question. Recently, we saw a fairly significant drop in China’s PMIs—all of them well below…

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Tomorrow, the University of Michigan’s Consumer Sentiment Survey will give us more information on US consumers’ inflation expectations. The survey respondents’ inflation expectations, as other analysts have pointed out, are highly correlated with gasoline prices, which rose in March by 3.7%. This survey, along with…

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Hawkish & Uncertain April 27, 2023

Posted by Steven Vannelli, CFA in Economy, News

Yesterday JP Morgan introduced a new model to quantify the last 20 years of Federal Reserve statements and speeches. While we aren’t privy to the details of the AI model, we will just assume that the model properly captures dovish and hawkish language. Based on…

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European-Related Earnings Revisions April 20, 2023

Posted by Austin Mann in Economy, Markets, News

With the European Market’s earning season fully upon us, let’s look at expectations for the month ahead. According to our proprietary analytics, the European energy and real estate sectors have experienced the highest level of downward revision to sales of all sectors on both a…

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Asian Regional Banks Sheltered from Global Maelstrom April 20, 2023

Posted by Tom Nemechek in Economy, Markets, News

While Asian financial companies have by no means been safe from the recent banking turmoil scything through other developed economies, regional banks have had a far less punishing month in terms of sales and earnings estimates than their peers in other markets. The financials sector…

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The Fed’s concern about U.S. banks dominated last month’s FOMC meeting. According to today’s release of the March 21-22 meeting minutes, the Fed was apparently so concerned over banking problems and the potential for an ensuing credit crunch that officials tempered calls for rate hikes,…

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Disturbing Commercial Bank Trends April 10, 2023

Posted by Steven Vannelli, CFA in Economy, News

Lost in the Good Friday holiday and the jobs report was the weekly report on bank lending, deposits and securities holdings. Keeping in mind this data is always a week old, it shows the retreat from banks continues. Small banks have now experienced about $250…

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Quarterly Strategy Report: Credit Crunch April 03, 2023

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

As banks back away from credit creation, we think certain assets could reassert their leadership. In our Quarterly Strategy Report, we analyze the Credit Crunch. Prefer to download this presentation in PDF? Please click here. 1. Summary -The recent banking crisis, with several banks being…

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