Sep
16
The economic data released over the last couple of months has painted a picture of an economy that is holding up fairly well, all things considered. Surveys of manufacturing and service activity halted their declines that started last year, and remain at levels consistent with economic expansion. Hundreds of thousands...
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Sep
15
Tuesday’s market meltdown of -4% off a bad CPI print warrants both comment and context. Here goes. Since 1950, the market has gone down -4% in a single day 53 times. That’s 53 times out of a total of approximately 17,400 trading days. The market’s reaction Wednesday to a bad CPI print was...
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Sep
08
Economic demand destruction well underway The excessive monetary and fiscal stimulus of 2021 led to a demand spike that resulted in an inflation spike. Financial conditions have been getting tighter over the past 8 months in response to such. Higher interest rates, wider credit spreads, and a strong USD are all symptomatic...
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Sep
02
A few quick takeaways from this morning’s payroll report: Non-farm payroll for August 2022 grew by +315,000, right in line with the +318,000 estimate. It’s actually an aberration that it came in so close to the estimate. These are complex statistical models prone to be off in any one month...
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Aug
30
It’s a fabulous Tuesday morning. Schools in Maryland have opened, and the weather is starting to moderate. Now, we need inflation to follow! On that front, good news continues to come and we still believe peak inflation to be behind us. For essentially this entire year we have described an...
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Aug
25
Over the past 8 months, financial conditions have tightened a lot. Interest rates higher, mortgage rates higher, and a stronger USD are all symptomatic of tighter financial conditions. The Fed sees this and wants this to happen. In their minds, the central banker playbook calls for tighter financial conditions in order...
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Aug
23
The Fed convenes later this week at Jackson Hole for their annual meeting/retreat/gathering/etc. Agenda looks like Wednesday night dinner, Thursday all day academic session on economic white papers, and Fed chair Powell speaks Friday morning. If you’ve got a PhD in monetary theory or just love a good 300-page summary...
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Aug
19
Higher interest rates and tighter financial conditions are clearly now impacting demand. It took 3-4 months to take effect, but the combination of those two things is doing what the Fed wants to do to fight inflationary pressures: purposefully destroy economic demand. Housing slowing, lumber prices down, gasoline at the...
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Aug
18
While the excessive money printing and fiscal stimulus of 2021 is the primary cause of above trend/pronounced inflation, it’s the Fed’s lack of action in early 2022 with regards to monetary policy and fed funds rate hikes that is the primary source of the current market volatility. The dark blue...
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Aug
16
Succession planning is an important piece of practice management for independent advisors, and it is an issue many advisors are facing – or will be in the near future. Simple demographics of the United States and the American advisor community add credence to this statement. According to data from Cerulli...
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