CCRV News and Press, ISHARES US ETF TR From 10/10/22

Summary Over the last two weeks Federal Reserve officials delivered 37 speeches, all of the speakers competing to see who could be the most hawkish. The big problem with the Fed’s plan to kill inflation by reducing economic growth and raising the unemployment rate is that t...

Summary The Fed’s goal is to inflict quick, near-term pain on the economy in exchange for long-term price stability and future economic gains. When it comes to inflation, the good news is that it appears to be peaking, and many economists see the declining inflation trend c...

Summary Elevated inflation, currencies, slowing global economic growth expectations, and reduced central bank liquidity remain key economic considerations. Volatility measured by the VIX spiked in September after declining in August. This wall of worry is real, but it is impor...

Summary YTD, the S&P 500 is now down 24% while bonds have their own double-digit losses. Like stock valuations, currency valuations aren’t great timing tools but over a 3-year period after becoming undervalued, the outperformance is strong. Consumer defensive stocks...

Summary One of the key points I’ve been discussing for the past two years is that the commodity markets are facing a unique set of policy-driven imbalances. When it comes to shortages across the fossil fuel space, the multi-year low in oil inventories has been only temporar...

Summary Inflation-adjusted interest rates are rising, rapidly. The lightning surge in real yields has a wide range of implications for macro and markets - a change that is now front and center for monitoring risk factors. As real yields rise further, the allure of locking in h...

Summary Stocks are now back down to the lows set in June and sentiment is as negative now as it was then. There is a long list of technical items that have hit levels or rates of change we associate with bottoms, short- or long-term. The economic data last week was mostly abou...

Summary A global recession is likely, with at least slower economic growth virtually certain. The tightening is not a mistake, but in most cases it’s coming too late, which means more economic damage than it had begun earlier. Businesses selling to China can expect lowe...

Summary The Fed’s GDP growth forecast was lowered to just .2% in 2022 and 1.2% in 2023 and well below the 2.5% US GDP growth capacity estimate. The US 2 and 30-year Treasury yield curve inverted 58 bps, the most since 2000. If December 2022 ends this hiking cycle, follo...

Summary Although consumers are benefiting from robust labor markets and strong balance sheets, they appear reluctant to buy high-cost durable goods. A key to navigating inflation risk is understanding its relationship with asset class returns. Historically, high-inflation episodes...