The most anticipated release of the week came in ... "Unchanged" or sticky stuck from August at 3.7% yoy. But it's worth mentioning as we will discuss below that this is up from June CPI which was 3.09% yoy. Core CPI which excludes food and energy because of their volatility sits at 4.13% yoy down from 4.39% last month. Let's [...]
The employment report on Friday seemed like a good one. The unemployment rate was unchanged as the economy added 336,000 jobs in September. The gains were widespread with additions in manufacturing, construction, wholesale trade, retail trade, transportation, warehousing, leisure and hospitality, healthcare and education, and government. Average hourly earnings were up 0.2% for the month and 4.2% year-over-year. It was [...]
Joe explains why he thinks rates are about to peak. He also does some teaching about the correlation between interest rates, GDP, Nominal GDP, and more.
Most strategic asset allocation strategies have produced negative returns over the last two years. A 60/40 allocation of Vanguard Total Stock and Vanguard Total Bond is down over 6%. John Bogle's 3-fund portfolio, a global approach that includes an allocation to Vanguard Total International is down nearly 9%. Morningstar has a diversified portfolio that includes 11 different ETFs and it's [...]
"Higher for longer." That's what the Fed says they intend to do with interest rates and investors finally decided to believe them last week. Bond yields, which have been stagnant since peaking last October, finally broke above the trading range they've been in for all that time. Short-term rates also moved higher but not as dramatically and the result was [...]
Everybody loves dividend stocks. Some prefer stocks with high dividend yields and some prefer stocks of companies that have grown their dividends consistently, but dividends are an essential component of many (we think it should be all) investors' portfolios. The two methodologies produce quite different portfolios but over the long run, they both perform very well on a total return [...]
Every weekend I sit down at my desk and write the title of this post at the top of a legal pad. I make a list of everything I can identify as trading at an extreme in markets. If an investor is to make tactical changes to their portfolio, it is in the extremes where they will find their greatest [...]
Durable order soften after early summer strength. Total manufacturing remains slightly negative YOY% change. This is a July report. On Friday we received the survey data for August. The 2 indices continue to give a bit of a mixed message. The ISM number, while still contractionary looks like it may have bottomed in July. The S&P PMI continues to predict [...]
There were some very smart people a year ago saying that you couldn't kill inflation without a big rise in unemployment. Last October, Larry Summers - former Treasury Secretary and President of Harvard - said we'd need a recession and an unemployment rate of 6% to kill inflation. In the summer of last year, he said we'd need 5 years [...]
The age old argument of the importance of labor versus capital in society. Heather Cox Richardson, professor of history at Boston College, presents the viewpoints of South Carolina Senator James Henry Hammond and "rising politician Abraham Lincoln." Plot spoiler, it seems not much has changed since the late 1850's. It's a nice concise summary of the argument. https://open.substack.com/pub/heathercoxrichardson/p/september-2-2023?r=5wnnr&utm_campaign=post&utm_medium=web
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