RZG News and Press, Invesco S&P Smallcap 600 Pure Growth From 09/16/22

Summary Since the start of the year my largest position has been cash. Cash rarely performs well but it has performed well in 2022 and now the yield on the 3-month Treasury is over 3%. Monetary policy continues to be restrictive which further supports cash over risk assets. ...

Summary The move lower in jobless claims pressed on this week as the seasonally adjusted reading dropped another 5K down to 213K in addition to last week’s reading being revised 4K lower to 218K. Although the continued decline in seasonally adjusted claims have not resulted...

Summary Starting today, the US Fed has pledged to run off its balance sheet by $95 billion a month. Fed fund futures predict that US policy rates will move to 3%-3.25% next week and 4.25%-4.5% by early 2023. Bond yields and interest rates should be topping out if a Fed pause c...

Summary With S&P 500’s worst day since June 2020 and a hotter-than-expected CPI print occurring late in the response collection period, the timing of responses is a potential cause for the increase in optimism that was contrary to equities’ price action. While bu...

Summary With the ten-year T-note yielding 3.41%, the S&P 500 at 3946 indicates likely nominal returns of 3.00%/year over the next ten years. The Fed will overshoot in tightening, leading the stock market to new lows in this bear market. When the yield curve inverts, those ...

Summary Initial claims for regular state unemployment insurance fell by 5,000 for the week ending September 10th, coming in at 213,000. Claims have fallen for five consecutive weeks and are at their lowest level since May 28th but remained slightly above the pre-pandemic average o...

Summary The September CPI, reflecting August 2022 inflation data, came in at 8.3%, which was higher than the consensus forecast but lower than the two previous readings. A 75-bp rate hike from the Fed is almost certain for September, and rates are likely to reach the 4% range by E...

Summary Over the last month, there has been a continuation of the significant market volatility that has dominated much of 2022. Inflation fears have driven markets and, as happened in the first half of the year, both equities and bonds have sold off. The fundamental issue of ...

Summary There is abundant evidence that inflation pressures are cooling. I can't emphasize enough that this inflation flare-up was not caused by a Fed policy error: it was caused by the federal government's attempt to soften the blow of Covid lockdowns. Inflation would remain ...

Summary Inflation in my experience comes from mistakes in government policy which expands currency without a subsequent expansion in economic growth as measured by Real Private GDP. With the fixed income and gold options not effective in today’s climate, one must focus on e...