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Summary Data this week confirmed both that disinflation is not running wild and that the US economy is not falling off a cliff. At 0.5%, January's CPI increase was the strongest in three months (in line with expectations). But with revisions, YoY consumer inflation of 6.4% was higher th...
Summary The latest round of economic data (retail sales, CPI, PPI, jobless claims) are all signaling more Fed rate hikes are coming. A quiet week for the UK with the early part bringing PMIs from the services and manufacturing sectors and the latter BoE appearances. This week’...
Summary We examine the 2022 and 2023 year-to-date performance of the major asset classes. Many of the successful "smart-money" trades of 2022 are underperforming in 2023. The underweights from 2022 are having a good year. The 2022 smart-money trades still feel like the right one...
Summary The M2 measure of money supply is declining, and higher interest rates are increasing the demand for money; this is a one-two punch which is rapidly snuffing out inflation. There is still no sign of the kind of economic or financial market stress that would trigger a recession. ...
Summary The S&P 500 hasn’t moved decisively in any direction over the past week. The pickup in bearish sentiment was not enough to make bears outnumber bulls. Our sentiment composite remains positive but is off from its short-term peak last week. The S&P 500...
Summary For the fifth week in a row, seasonally adjusted initial claims have come in with a sub-200K reading. While not to say the reading is at unhealthy levels, continuing claims have not been as strong as initial claims. Overall, both initial and continuing claims continue to sho...
Summary The near-instantaneous analysis of January’s highly anticipated Consumer Price Index (CPI) report was impressive. It is questionable whether the uncertainties in the inflation outlook can be meaningfully reduced by looking at the individual trees in the inflation forest. ...
Summary Stocks have posted solid gains since they started to recover from last year’s painful crash. Policy trends that drive currency moves and macroeconomic growth differ around the world. Disciplined stock selection can help investors achieve effective global diversificati...
Summary In this post, I will focus on trend lines in profitability at companies in 2022, with the intent of addressing multiple questions. While absolute profits are a useful measure of profitability, you have to scale profits to a common scaling variable, to compare companies of differ...
Summary With the CPI losing the relief from cooling energy prices, this month showed a solid uptick in prices, coming in at 0.54% (~6.6% annualized). One concerning thing about the most recent print is that many categories sit above the current 12-month trend. The Fed has been reloa...