Since the end of the “Yen Carry Trade” correction in August, bullish positioning has returned with a vengeance, yet two key risks face investors as September begins. While bullish positioning and optimism are ingredients for a rising market, there is more to this story.
We are entering a time I think will include a deep crisis. We are going to need each other. We really do need to “find our tribe.”
The U.S. economy may be heading into choppy waters, and investors might be wise to buckle up.
The main focus for investors should is no longer if the Fed will cut rates in 2024, but how much and how quickly the Fed will lower interest rates.
The concept of portable alpha is over 40 years old. And while it has evolved through various forms over that time, it continues to be a valuable portfolio tool for institutional investors. Arguably, the most popular iteration right now is adding alpha expected from hedge funds on top of synthetic beta exposure.
The yield on the 10-year note ended September 6, 2024 at 3.72%, the 2-year note ended at 3.66%, and the 30-year at 4.03%.
Most people see “blockchain” and “funds” in the same sentence and immediately think of pools of money betting on cryptocurrencies like Bitcoin and Ether. That isn’t how Singapore sees the utility of distributed ledgers.
Recent changes to the FAFSA form and process include a simpler form, fewer questions and a revised eligibility formula. Our Bill Cass highlights what you need to know to apply for federal financial aid for college.
Presidential elections tend to have limited impact on market performance, regardless of party win (although markets prefer Democratic switches). Investors should capitalize on the uptick in market volatility, which investors can use for strategic investing.
Private assets are the fastest-growing market in the financial world, but could be the most challenging field for ETF providers to penetrate.
Investors should be careful what they wish for in hoping for an aggressive Fed rate cutting cycle, given stocks tend to do better when cuts are slow and steady.
After a decade of consistent outperformance, Japanese small caps began underperforming their large cap peers in 2018, a trend that has accelerated since 2023.
This week I had the chance to run a half-day workshop helping seasoned, successful advisors learn techniques for emerging as strong leaders, so I’ll share some of the information here in this column.
Equity bulls looking for signs of relief after Tuesday’s stock rout may get a hand from a familiar friend: corporate America.
The sharp selloff that wiped a record $279 billion off Nvidia Corp.’s market value on Tuesday has traders scouring charts for clues as to where the pain might end.
A soft landing for the U.S. economy still appears to be the most likely outcome.
Here is a look at real (inflation-adjusted) charts of the S&P 500, Dow 30, and Nasdaq composite since their 2000 highs. We've updated this through the August 2024 close.
You did everything by the book. Your prospect talked and you listened. But listening alone is not enough to build trust.
Half your coworkers might have just spent August in Europe, but there were no holiday doldrums in the booming world of ETFs.
It’s the story of so many stock market manias: A transformative technology juices a few companies, a bunch of more questionable outfits follow in their wake, and Wall Street buys it all. Then time sorts out what’s real from fake.
Apple Inc.’s upcoming iPhone release has sent its stock price soaring because of promised artificial-intelligence features. Those gains appear vulnerable, at least in the short term, if history is any guide.
After a bit of an early-August swoon, the stock market came roaring back in the last few weeks of the month. The S&P 500 finished up 2.4%, though certainly in the early days of August, that did not feel like a particularly likely outcome. In client conversations a few days into the selloff, our feeling was to stay put and not tinker with the portfolios we suggested in early August.
The Institute for Supply Management (ISM) manufacturing purchasing managers index (PMI) inched up to 47.2 in August but remains in contraction territory for a fifth straight month. The index has now contracted for 21 of the past 22 months. The latest reading was worse than the forecast of 47.5.
The August S&P Global US Manufacturing PMI™ fell to 47.9 in August from 49.6 in July, indicating a modest deterioration in business conditions for a second straight month. The latest reading was just below the forecasted reading of 48.0 and is the index's lowest level of the year.
As I write this, gold continues to trade above $2,500 an ounce after surging past the psychologically important level for the first time ever in mid-August. For seasoned gold mining investors, this should be a moment of validation. After all, the yellow metal has long been seen as the ultimate hedge against economic uncertainty.
As of August 31, 2024, the 10-year note was 339 basis points above its historic closing low of 0.52% reached on August 4, 2020.
Seven of our eight indexes on our world watch list have posted gains through August 30th, 2024. The U.S.'s S&P 500 finished in the top spot with a year-to-date gain of 19.09%. Tokyo's Nikkei 225 finished in second with a year-to-date gain of 15.49% while India's BSE SENSEX finished in third with a year-to-date gain of 14.57%.
The weekly leading economic index (WLEI) is a composite for the U.S economy that draws from over 20 time-series and groups them into the following six broad categories which are then used to construct an equally weighted average. As of August 23rd, the index was at 24.827, down 1.545 from the previous week, with 4 of the 6 components in expansion territory.
Establishing the optimal workplace retirement plan follows a pecking order, which starts by prioritizing plan design over investments. Our Mike Dullaghan discusses the process.
The Federal Reserve’s preferred measure of underlying US inflation rose at a mild pace and household spending picked up in July, reinforcing policymakers’ plan to start cutting interest rates next month.
Copper has been trending lower since the middle of May, but supply disruptions in Latin America could help reverse that trend.
Valid until the market close on September 30, 2024
This article provides an update on the monthly moving averages we track for the S&P 500 and the Ivy Portfolio after the close of the last business day of the month.
The BEA's core Personal Consumption Expenditures (PCE) Price Index for July showed that core inflation continues to be above the Federal Reserve's 2% long-term target at 2.6%. The July core Consumer Price Index (CPI) release was higher, at 3.2%. The Fed is on record as using core PCE data as its primary inflation gauge.
Personal income (excluding transfer receipts) rose 0.32% in July and is up 4.1% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, real personal income (excluding transfer receipts) was up 0.16% month-over-month and up 1.6% year-over-year.
The latest Chicago Purchasing Manager's Index (Chicago Business Barometer) edged up to 46.1 in August from 45.3 in July. The latest reading is better than the 45.0 forecast but keeps the index in contraction territory for a ninth straight month.
With the release of July's report on personal incomes and outlays, we can now take a closer look at "real" disposable personal income per capita. At two decimal places, the nominal 0.21% month-over-month change in disposable income comes to 0.06% when we adjust for inflation. The year-over-year metrics are 3.09% nominal and 0.58% real.
The BEA's Personal Income and Outlays report revealed inflation remained at its lowest level since early 2021. The PCE price index, the Fed's favored measure of inflation, was up 2.5% year-over-year, just below the forecasted 2.6% growth. On a monthly basis, PCE inflation was up 0.2% from June, as expected.
When you see that behavior at extreme valuations, it tends to be a sign of underlying skittishness and risk aversion. When valuations are setting record extremes because the news can’t get any better, even a slightly less optimistic outlook becomes a risk.
The late Jack Bogle — father of the first index fund — famously loathed their exchange-traded offspring, warning that it only incentivize speculative trading among “fruitcakes, nut cases and lunatic fringe.” Fast forward to 2024, and critics warn a new generation of ETFs are designed to do exactly that.
Many recent studies have been done on the economics of different generations. Researchers want to know if Millennials and Gen Z are in fact worse off than their Boomer and Gen X parents. There are quite a few ways to look at this data.
While short-term fluctuations and sudden selloffs have tested the markets, key indicators such as corporate profits, employment data, and economic resilience have held firm.
The path for lower rates in the U.S. has finally arrived.
The second estimate for Q2 GDP came in at 2.95%, an acceleration from 1.41% for the Q1 final estimate. With a per-capita adjustment, the headline number is lower at 2.48%, a pickup from 0.95% for the Q1 headline number.
Rules are made to be broken, so I would call this a 50 percent starting place in your discussion with the client. I certainly wouldn’t recommend only a 50 percent equity portfolio to a young client with a high willingness and need to take risk or the same to any client who had a low willingness and need to take risk.
Real gross domestic product (GDP) is comprised of four major subcomponents. In the Q2 GDP second estimate, three of the four components made positive contributions.
If your home and/or its contents are destroyed or damaged by a disaster such as a fire or flood, the insurance company will need a complete list of what was lost. Do you have such a list?
The National Association of Realtors® (NAR)unexpectedly fell 5.5% in July to 70.2, its lowest level in history. Pending home sales were expected to inch up 0.2% from the previous month. The index is down 8.5% from one year ago.
Nvidia Corp.’s earnings report needed to be perfect for a stock that’s added nearly $2 trillion in market value in the past year. In the end, a broad beat still sparked a selloff.
Nvidia Corp.’s earnings report was impressive by virtually any metric — except its own recent history.
Nvidia Corp. failed to live up to investor hopes with its latest results on Wednesday, delivering an underwhelming forecast and news of production snags with its much-awaited Blackwell chips.
An extended period of elevated interest rates may have long-term implications for both consumers and businesses—affecting how investors value company shares.
Will 2030 DC plans perform better at preparing U.S. workers for retirement?
High-yield bonds have been one of the best-performing bond investments so far this year, but there may be better entry points down the road.
Watch the video above to get specific recommendations for how to think about a website revamp as a financial advisor, and when to redirect your attention to other initiatives.
Berkshire Hathaway Inc. became the first US company outside of the tech sector to surpass $1 trillion in market value.
At the recent central-bank symposium at Jackson Hole, Federal Reserve Chairman Jerome Powell delivered a widely expected message on interest rates: “The time has come for policy to adjust.” He all but confirmed that the Fed would cut rates by at least a quarter-point when its policymakers next meet in September.
The almost $3 trillion rally in Nvidia Corp. shares over the roughly two years since ChatGPT’s unveiling has virtually rewired the US stock market, giving the artificial intelligence chipmaking giant an outsized influence on a bevy of equity indexes.
The most glaring uncertainties today, which contributed to early August seeing some of the largest market moves in the last several years, are the risks associated with the Federal Reserve’s dual mandate.
Portfolio managers should always have good explanations for their underweight positions. These days, it matters more than ever.
Elevated budget deficits imply growing US Treasury issuance. Receding demand from central banks could leave more price-sensitive buyers to pick up the slack. Who are the buyers of US government debt, and how is the market responding? In part two of our series, let’s examine Treasury market supply and demand.
The Conference Board's Consumer Confidence Index® hit a six-month high in August. The index rose to 103.3 this month from July's upwardly revised 101.9. This month's reading was better than expected, exceeding the 100.9 forecast.
Home prices continued to trend upwards in June as the benchmark 20-city index rose for a sixteenth consecutive month to a new all-time high. The S&P Case-Shiller Home Price Index revealed seasonally adjusted home prices for the 20-city index saw a 0.4% increase month-over-month (MoM) and a 6.4% increase year-over-year (YoY). After adjusting for inflation, the MoM was reduced to 0.1% and the YoY was reduced to 0.9%.
Gas prices fell to their lowest level in 6 months this past week. As of August 26th, the price of regular and premium gas decreased 7 cents and 5 cents from the previous week, respectively. The WTIC end-of-day spot price for crude oil closed at $77.42, up 5.1% from last week.
Fifth district manufacturing activity slowed in August, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite manufacturing index fell to -19 this month from -17 in July. This month's reading was worse than the forecast of -14 and is the lowest reading since May 2020.
The Federal Housing Finance Agency (FHFA) house price index (HPI) unexpectedly declined to 424.5 in June, just below the all-time high of 424.8 from the previous month. U.S. house prices were down 0.1% from the previous month and are up 5.1% from one year ago. After adjusting for inflation, the real index was up 0.1% month-over-month and up 3.3% year-over-year.
Mining stocks can certainly benefit from gold’s run as the precious metal looks to break past the $2,600 per ounce mark. Gold prices are already up about 23% for the year and could keep on rallying with a number of tailwinds behind it.
It’s been the ultimate no-brainer for more than a year: Park your money in super-safe Treasury bills, earn yields of more than 5%, rinse and repeat. Or as billionaire bond investor Jeffrey Gundlach put it last October, “T-bill and chill.”
Whether someone’s problematic relationship is with food or money, recovery involves addressing the trauma and issues that underlie the behavior.
To understand the importance of involving both spouses in the discussion, we asked our very own Vicky Frye, Director of FinTech Innovation and Cybersecurity Strategies at WMGNA, for her comments on this topic.
The potential of AI in wealth management is undeniable, but realizing that potential requires more than just adopting the latest technology. By engaging advisors in the process, providing thorough training, and setting realistic expectations, firms can bridge the gap between C-suite optimism and frontline reality.
The Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for August. The latest general business activity index came in at -9.7, up from -17.5 last month. This marks the highest level for the index since January 2023 but is the 28th consecutive month the index has been in contraction territory.
That anthem was characteristic of the era. After two decades of economic frustration, free market policies had prompted a surge of growth and a bull market for stocks. The captains of industry were corporate raiders, who purchased companies, slashed expenses, pushed up prices and reaped outsized rewards.
As a businessman and ex-business owner, the idea of firms ‘hoarding’ workers never made sense. As an economist, the idea of firms hoarding workers never made sense either.
This week we take a not-so-random walk through the data, trying to simplify what is actually a fairly complex subject. I think it is quite fun, but also important. Let's dive in.
This week, before she accepted the Democratic Party’s nomination for president, Vice President Kamala Harris threw her support behind President Joe Biden’s tax proposals for 2025, which include a steep 44.6% capital gains rate and an unprecedented 25% tax on unrealized gains.
Federal Reserve Chair Jerome Powell on Friday removed all doubt that interest rate cuts are just around the corner. “The time has come for policy to adjust,” he said at his much-hyped annual speech in Jackson Hole, Wyoming, setting off a knee-jerk rally in stocks and bonds.
New orders for manufactured durable goods rose to $289.65B in July, the highest level since November. This represents a 9.9% increase from the previous month and better than the expected 4.0% growth. The series is up 1.3% year-over-year (YoY). If we exclude transportation, "core" durable goods were down 0.2% from the previous month and up 0.6% from one year ago.
The dollar plunged after Federal Reserve Chair Jerome Powell affirmed expectations that the central bank will cut interest rates next month, sparking a rally in the currencies of major global peers.
Since early last year, the cars rolling off Tesla Inc.’s California assembly lines have been selling for steadily lower prices. This has had a happy knock-on effect on a car lot just across the freeway from the company’s San Francisco Bay area factory.
An Oaktree Capital Management LP venture plans to seek an equity partner to help develop a Dublin project that’s expected to be valued at billions of euro when it’s completed, according to people with knowledge of the matter.
Although we think it's too early to declare the economy is in a recession, risk is elevated. For investors who are concerned about a recession, municipal bonds may help buffer a portfolio.
It’s the hottest trade on Wall Street. Everywhere you turn, money managers have upped their investments in private credit, helping the asset class balloon into a $1.7 trillion industry. But there’s one group where interest appears to already be waning — the family office.
The July release for new home sales from the Census Bureau came in at a seasonally adjusted annual rate of 739,000 units, the highest level in fourteen months. The latest reading came in higher than the 624,000 forecast. New home sales are down 10.6% month-over-month from a revised rate of 668,000 in June and are up 5.6% from one year ago.
Recent economic data points have been mixed. On the more positive side of the ledger, there’s evidence that inflation is cooling and consumer spending remains sturdy. Conversely, the jobs market is cooling.
After market expectations spiked to nearly five interest rate cuts in 2024 based on disappointing labor market report early in the month, reassuring data in the form of Retail Sales and Unemployment Claims have quelled market Markets have eased expectations for interest rate cuts, pricing closer to four cuts as of the end of last week.
The latest Kansas City Fed Manufacturing Survey composite index did not decline as much in August following a sharper decline last month. The composite index came in at -3, up from -13 in July. Meanwhile, the future outlook increased to 8.
Existing home sales rose for the first time since February, ending a four-month skid. According to the data from the National Association of Realtors (NAR), existing home sales were up 1.3% from June, reaching a seasonally adjusted annual rate of 3.95 million units in July. This figure came in just above the expected 3.94 million. Existing home sales are down 2.5% compared to one year ago.
Amid expectations of rate cuts from major central banks, managers are increasing their exposure to more cyclical and value-oriented names, including autos, transportation, and short-cycle industrials.
Active management can lead to high portfolio turnover and a higher tax bill. Wealth managers might feel that an active strategy could be too inefficient for clients who are sensitive to taxes. Find out how implementing a core-satellite portfolio with a direct indexing core may improve tax efficiency.
As the AI halo begins to fade, equity investors are seeking companies that can profit from—and not just pontificate about—artificial intelligence.
Small Cap
Risks Facing Bullish Investors As September Begins
Since the end of the “Yen Carry Trade” correction in August, bullish positioning has returned with a vengeance, yet two key risks face investors as September begins. While bullish positioning and optimism are ingredients for a rising market, there is more to this story.
The Time Has Come
We are entering a time I think will include a deep crisis. We are going to need each other. We really do need to “find our tribe.”
The Yield Curve Inversion Just Ended, but Economic Risks Remain
The U.S. economy may be heading into choppy waters, and investors might be wise to buckle up.
Fed Rate Cuts Coming in September: What’s Next?
The main focus for investors should is no longer if the Fed will cut rates in 2024, but how much and how quickly the Fed will lower interest rates.
Portable Alpha: Divorcing and Remarrying Alpha and Beta
The concept of portable alpha is over 40 years old. And while it has evolved through various forms over that time, it continues to be a valuable portfolio tool for institutional investors. Arguably, the most popular iteration right now is adding alpha expected from hedge funds on top of synthetic beta exposure.
Treasury Yields Snapshot: September 6, 2024
The yield on the 10-year note ended September 6, 2024 at 3.72%, the 2-year note ended at 3.66%, and the 30-year at 4.03%.
Why Singapore Is Bringing Blockchain Into Mutual Funds
Most people see “blockchain” and “funds” in the same sentence and immediately think of pools of money betting on cryptocurrencies like Bitcoin and Ether. That isn’t how Singapore sees the utility of distributed ledgers.
Navigating Financial Aid: New FAFSA Rules and Tips for Families
Recent changes to the FAFSA form and process include a simpler form, fewer questions and a revised eligibility formula. Our Bill Cass highlights what you need to know to apply for federal financial aid for college.
Maintain Your Investment Strategy During Election Years
Presidential elections tend to have limited impact on market performance, regardless of party win (although markets prefer Democratic switches). Investors should capitalize on the uptick in market volatility, which investors can use for strategic investing.
Can ETFs Capture Private Equity Markets?
Private assets are the fastest-growing market in the financial world, but could be the most challenging field for ETF providers to penetrate.
It's Time … For a Fed Pivot
Investors should be careful what they wish for in hoping for an aggressive Fed rate cutting cycle, given stocks tend to do better when cuts are slow and steady.
Small Wonders: Overlooked Japan Small Caps Poised for Resurgence
After a decade of consistent outperformance, Japanese small caps began underperforming their large cap peers in 2018, a trend that has accelerated since 2023.
What Every Leader Should Understand
This week I had the chance to run a half-day workshop helping seasoned, successful advisors learn techniques for emerging as strong leaders, so I’ll share some of the information here in this column.
Would-Be Corporate Dip Buyers Armed With Fresh $107 Billion
Equity bulls looking for signs of relief after Tuesday’s stock rout may get a hand from a familiar friend: corporate America.
Nvidia Rout Has Traders Watching $100-Share Level Amid ‘Vacuum’
The sharp selloff that wiped a record $279 billion off Nvidia Corp.’s market value on Tuesday has traders scouring charts for clues as to where the pain might end.
August Sees Markets Close Strong After Tough Start
A soft landing for the U.S. economy still appears to be the most likely outcome.
The S&P 500, Dow and Nasdaq Since Their 2000 Highs
Here is a look at real (inflation-adjusted) charts of the S&P 500, Dow 30, and Nasdaq composite since their 2000 highs. We've updated this through the August 2024 close.
Listening Is Not Enough to Make the Sale
You did everything by the book. Your prospect talked and you listened. But listening alone is not enough to build trust.
Sizzling ETF Flows in Manic Markets Fuel a $609 Billion Haul
Half your coworkers might have just spent August in Europe, but there were no holiday doldrums in the booming world of ETFs.
Shorts Are Circling Some of the AI Boom’s Biggest Question Marks
It’s the story of so many stock market manias: A transformative technology juices a few companies, a bunch of more questionable outfits follow in their wake, and Wall Street buys it all. Then time sorts out what’s real from fake.
Apple Rally Fueled by AI Promises Approaches a Crucial Test
Apple Inc.’s upcoming iPhone release has sent its stock price soaring because of promised artificial-intelligence features. Those gains appear vulnerable, at least in the short term, if history is any guide.
Quant Street September 2024 Investor Letter: All Eyes on the Fed
After a bit of an early-August swoon, the stock market came roaring back in the last few weeks of the month. The S&P 500 finished up 2.4%, though certainly in the early days of August, that did not feel like a particularly likely outcome. In client conversations a few days into the selloff, our feeling was to stay put and not tinker with the portfolios we suggested in early August.
ISM Manufacturing Index Contracts for 5th Straight Month
The Institute for Supply Management (ISM) manufacturing purchasing managers index (PMI) inched up to 47.2 in August but remains in contraction territory for a fifth straight month. The index has now contracted for 21 of the past 22 months. The latest reading was worse than the forecast of 47.5.
S&P Global US Manufacturing PMI™: Lowest Level of 2024
The August S&P Global US Manufacturing PMI™ fell to 47.9 in August from 49.6 in July, indicating a modest deterioration in business conditions for a second straight month. The latest reading was just below the forecasted reading of 48.0 and is the index's lowest level of the year.
Why Gold Stocks Could Be a Contrarian Investor’s Dream Right Now
As I write this, gold continues to trade above $2,500 an ounce after surging past the psychologically important level for the first time ever in mid-August. For seasoned gold mining investors, this should be a moment of validation. After all, the yellow metal has long been seen as the ultimate hedge against economic uncertainty.
Treasury Yields: A Long-Term Perspective
As of August 31, 2024, the 10-year note was 339 basis points above its historic closing low of 0.52% reached on August 4, 2020.
World Markets Watchlist: August 30, 2024
Seven of our eight indexes on our world watch list have posted gains through August 30th, 2024. The U.S.'s S&P 500 finished in the top spot with a year-to-date gain of 19.09%. Tokyo's Nikkei 225 finished in second with a year-to-date gain of 15.49% while India's BSE SENSEX finished in third with a year-to-date gain of 14.57%.
RecessionAlert Weekly Leading Economic Index
The weekly leading economic index (WLEI) is a composite for the U.S economy that draws from over 20 time-series and groups them into the following six broad categories which are then used to construct an equally weighted average. As of August 23rd, the index was at 24.827, down 1.545 from the previous week, with 4 of the 6 components in expansion territory.
The Pecking Order of 401(K) Plan Design: A Bird’s Eye View
Establishing the optimal workplace retirement plan follows a pecking order, which starts by prioritizing plan design over investments. Our Mike Dullaghan discusses the process.
Fed Favored Inflation Gauge’s Mild Gain Sets Stage for Rate Cut
The Federal Reserve’s preferred measure of underlying US inflation rose at a mild pace and household spending picked up in July, reinforcing policymakers’ plan to start cutting interest rates next month.
Supply Disruptions Could Push Copper Prices Higher
Copper has been trending lower since the middle of May, but supply disruptions in Latin America could help reverse that trend.
Moving Averages: S&P Finishes August 2024 Up 2.3%
Valid until the market close on September 30, 2024
This article provides an update on the monthly moving averages we track for the S&P 500 and the Ivy Portfolio after the close of the last business day of the month.
Two Measures of Inflation: July 2024
The BEA's core Personal Consumption Expenditures (PCE) Price Index for July showed that core inflation continues to be above the Federal Reserve's 2% long-term target at 2.6%. The July core Consumer Price Index (CPI) release was higher, at 3.2%. The Fed is on record as using core PCE data as its primary inflation gauge.
The Big Four Recession Indicators: Real Personal Income Up 0.2% in July
Personal income (excluding transfer receipts) rose 0.32% in July and is up 4.1% year-over-year. However, when adjusted for inflation using the BEA's PCE Price Index, real personal income (excluding transfer receipts) was up 0.16% month-over-month and up 1.6% year-over-year.
Chicago PMI Edged Higher in August
The latest Chicago Purchasing Manager's Index (Chicago Business Barometer) edged up to 46.1 in August from 45.3 in July. The latest reading is better than the 45.0 forecast but keeps the index in contraction territory for a ninth straight month.
Real Disposable Income Per Capita Up 0.1% in July
With the release of July's report on personal incomes and outlays, we can now take a closer look at "real" disposable personal income per capita. At two decimal places, the nominal 0.21% month-over-month change in disposable income comes to 0.06% when we adjust for inflation. The year-over-year metrics are 3.09% nominal and 0.58% real.
PCE Inflation Rises 2.5% in July, Less Than Expected
The BEA's Personal Income and Outlays report revealed inflation remained at its lowest level since early 2021. The PCE price index, the Fed's favored measure of inflation, was up 2.5% year-over-year, just below the forecasted 2.6% growth. On a monthly basis, PCE inflation was up 0.2% from June, as expected.
Fed Pivots and Baby Aspirin
When you see that behavior at extreme valuations, it tends to be a sign of underlying skittishness and risk aversion. When valuations are setting record extremes because the news can’t get any better, even a slightly less optimistic outlook becomes a risk.
One-Day-Only Funds Are Jack Bogle’s Nightmare Brought to Life
The late Jack Bogle — father of the first index fund — famously loathed their exchange-traded offspring, warning that it only incentivize speculative trading among “fruitcakes, nut cases and lunatic fringe.” Fast forward to 2024, and critics warn a new generation of ETFs are designed to do exactly that.
Break the Cycle and Create Generational Wealth
Many recent studies have been done on the economics of different generations. Researchers want to know if Millennials and Gen Z are in fact worse off than their Boomer and Gen X parents. There are quite a few ways to look at this data.
Fundamentals Matter
While short-term fluctuations and sudden selloffs have tested the markets, key indicators such as corporate profits, employment data, and economic resilience have held firm.
The Shot Heard Round The World
The path for lower rates in the U.S. has finally arrived.
Q2 Second Estimate: GDP Per Capita versus GDP
The second estimate for Q2 GDP came in at 2.95%, an acceleration from 1.41% for the Q1 final estimate. With a per-capita adjustment, the headline number is lower at 2.48%, a pickup from 0.95% for the Q1 headline number.
The 50 Percent Rule
Rules are made to be broken, so I would call this a 50 percent starting place in your discussion with the client. I certainly wouldn’t recommend only a 50 percent equity portfolio to a young client with a high willingness and need to take risk or the same to any client who had a low willingness and need to take risk.
An Inside Look at the Q2 2024 GDP Second Estimate
Real gross domestic product (GDP) is comprised of four major subcomponents. In the Q2 GDP second estimate, three of the four components made positive contributions.
How to Get Full Protection From Your Homeowners Insurance
If your home and/or its contents are destroyed or damaged by a disaster such as a fire or flood, the insurance company will need a complete list of what was lost. Do you have such a list?
Pending Home Sales Unexpectedly Fall 5.5% in July to All-Time Low
The National Association of Realtors® (NAR)unexpectedly fell 5.5% in July to 70.2, its lowest level in history. Pending home sales were expected to inch up 0.2% from the previous month. The index is down 8.5% from one year ago.
Nvidia Pays Price of Lofty Expectations, Stoking Fear for Rivals
Nvidia Corp.’s earnings report needed to be perfect for a stock that’s added nearly $2 trillion in market value in the past year. In the end, a broad beat still sparked a selloff.
With AI Story Intact and Rate Cuts Imminent, Markets Turn Higher
Nvidia Corp.’s earnings report was impressive by virtually any metric — except its own recent history.
Nvidia Tumbles After Disappointing Forecast, Blackwell Chip Snags
Nvidia Corp. failed to live up to investor hopes with its latest results on Wednesday, delivering an underwhelming forecast and news of production snags with its much-awaited Blackwell chips.
Debt Burdens, Elevated Rates to Test Equity Investors
An extended period of elevated interest rates may have long-term implications for both consumers and businesses—affecting how investors value company shares.
8 Ways DC Plans Are Likely to Change by 2030
Will 2030 DC plans perform better at preparing U.S. workers for retirement?
High-Yield Bonds: Are They Attractive Now?
High-yield bonds have been one of the best-performing bond investments so far this year, but there may be better entry points down the road.
Growth Advice: When to Revamp Your Website (and When to Wait)
Watch the video above to get specific recommendations for how to think about a website revamp as a financial advisor, and when to redirect your attention to other initiatives.
Buffett’s Berkshire Hathaway Tops $1 Trillion in Market Value
Berkshire Hathaway Inc. became the first US company outside of the tech sector to surpass $1 trillion in market value.
Why the Fed Shouldn’t Stop Worrying About Inflation
At the recent central-bank symposium at Jackson Hole, Federal Reserve Chairman Jerome Powell delivered a widely expected message on interest rates: “The time has come for policy to adjust.” He all but confirmed that the Fed would cut rates by at least a quarter-point when its policymakers next meet in September.
Nvidia’s Earnings Will Test the S&P 500’s $4 Trillion Recovery
The almost $3 trillion rally in Nvidia Corp. shares over the roughly two years since ChatGPT’s unveiling has virtually rewired the US stock market, giving the artificial intelligence chipmaking giant an outsized influence on a bevy of equity indexes.
Let’s Get Real (Rates)!
The most glaring uncertainties today, which contributed to early August seeing some of the largest market moves in the last several years, are the risks associated with the Federal Reserve’s dual mandate.
So Why Don’t You Own It?
Portfolio managers should always have good explanations for their underweight positions. These days, it matters more than ever.
Gradually, then Suddenly: Financing the Nation’s Growing Debt
Elevated budget deficits imply growing US Treasury issuance. Receding demand from central banks could leave more price-sensitive buyers to pick up the slack. Who are the buyers of US government debt, and how is the market responding? In part two of our series, let’s examine Treasury market supply and demand.
Consumer Confidence Hits 6-Month High in August
The Conference Board's Consumer Confidence Index® hit a six-month high in August. The index rose to 103.3 this month from July's upwardly revised 101.9. This month's reading was better than expected, exceeding the 100.9 forecast.
S&P Case-Shiller Home Price Index: Hits New Record High in June
Home prices continued to trend upwards in June as the benchmark 20-city index rose for a sixteenth consecutive month to a new all-time high. The S&P Case-Shiller Home Price Index revealed seasonally adjusted home prices for the 20-city index saw a 0.4% increase month-over-month (MoM) and a 6.4% increase year-over-year (YoY). After adjusting for inflation, the MoM was reduced to 0.1% and the YoY was reduced to 0.9%.
Gasoline Prices Fall to 6-Month Low
Gas prices fell to their lowest level in 6 months this past week. As of August 26th, the price of regular and premium gas decreased 7 cents and 5 cents from the previous week, respectively. The WTIC end-of-day spot price for crude oil closed at $77.42, up 5.1% from last week.
Richmond Fed Manufacturing Activity Slowed in August
Fifth district manufacturing activity slowed in August, according to the most recent survey from the Federal Reserve Bank of Richmond. The composite manufacturing index fell to -19 this month from -17 in July. This month's reading was worse than the forecast of -14 and is the lowest reading since May 2020.
FHFA House Price Index Unexpectedly Declined in June
The Federal Housing Finance Agency (FHFA) house price index (HPI) unexpectedly declined to 424.5 in June, just below the all-time high of 424.8 from the previous month. U.S. house prices were down 0.1% from the previous month and are up 5.1% from one year ago. After adjusting for inflation, the real index was up 0.1% month-over-month and up 3.3% year-over-year.
Gold Mining Stocks Offer Investors Plenty of Value
Mining stocks can certainly benefit from gold’s run as the precious metal looks to break past the $2,600 per ounce mark. Gold prices are already up about 23% for the year and could keep on rallying with a number of tailwinds behind it.
‘T-Bill and Chill’ Is a Hard Habit for Investors to Break
It’s been the ultimate no-brainer for more than a year: Park your money in super-safe Treasury bills, earn yields of more than 5%, rinse and repeat. Or as billionaire bond investor Jeffrey Gundlach put it last October, “T-bill and chill.”
What Money Issues and Food Have in Common
Whether someone’s problematic relationship is with food or money, recovery involves addressing the trauma and issues that underlie the behavior.
Bringing Wives into the Discussion
To understand the importance of involving both spouses in the discussion, we asked our very own Vicky Frye, Director of FinTech Innovation and Cybersecurity Strategies at WMGNA, for her comments on this topic.
Bridging the AI Confidence Gap Between the C-Suite and Advisors
The potential of AI in wealth management is undeniable, but realizing that potential requires more than just adopting the latest technology. By engaging advisors in the process, providing thorough training, and setting realistic expectations, firms can bridge the gap between C-suite optimism and frontline reality.
Dallas Fed Manufacturing: Business Activity Reaches 19-Month High in August
The Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for August. The latest general business activity index came in at -9.7, up from -17.5 last month. This marks the highest level for the index since January 2023 but is the 28th consecutive month the index has been in contraction territory.
Getting to the Bottom of “Greedflation”
That anthem was characteristic of the era. After two decades of economic frustration, free market policies had prompted a surge of growth and a bull market for stocks. The captains of industry were corporate raiders, who purchased companies, slashed expenses, pushed up prices and reaped outsized rewards.
Remember When (Almost) Everyone Was Saying That U.S. Businesses Were Hoarding Workers?
As a businessman and ex-business owner, the idea of firms ‘hoarding’ workers never made sense. As an economist, the idea of firms hoarding workers never made sense either.
Unemployment, Inflation and The Fed’s Choice
This week we take a not-so-random walk through the data, trying to simplify what is actually a fairly complex subject. I think it is quite fun, but also important. Let's dive in.
How Price Controls Could Harm the U.S. Economy Under a President Harris
This week, before she accepted the Democratic Party’s nomination for president, Vice President Kamala Harris threw her support behind President Joe Biden’s tax proposals for 2025, which include a steep 44.6% capital gains rate and an unprecedented 25% tax on unrealized gains.
Powell Ignored the Elephant in the Fed’s Jackson Hole Lodge Jonathan Levin
Federal Reserve Chair Jerome Powell on Friday removed all doubt that interest rate cuts are just around the corner. “The time has come for policy to adjust,” he said at his much-hyped annual speech in Jackson Hole, Wyoming, setting off a knee-jerk rally in stocks and bonds.
Durable Goods Orders: July 2024
New orders for manufactured durable goods rose to $289.65B in July, the highest level since November. This represents a 9.9% increase from the previous month and better than the expected 4.0% growth. The series is up 1.3% year-over-year (YoY). If we exclude transportation, "core" durable goods were down 0.2% from the previous month and up 0.6% from one year ago.
Dollar Slumps After Powell Touts Case for Interest-Rate Cuts
The dollar plunged after Federal Reserve Chair Jerome Powell affirmed expectations that the central bank will cut interest rates next month, sparking a rally in the currencies of major global peers.
Tesla’s Steep Price Cuts Help Get the Used EV Market Humming
Since early last year, the cars rolling off Tesla Inc.’s California assembly lines have been selling for steadily lower prices. This has had a happy knock-on effect on a car lot just across the freeway from the company’s San Francisco Bay area factory.
Oaktree Plans to Seek Partner for 3,800 Home Project in Dublin
An Oaktree Capital Management LP venture plans to seek an equity partner to help develop a Dublin project that’s expected to be valued at billions of euro when it’s completed, according to people with knowledge of the matter.
Five Reasons Munis May Offer Shelter in Recession
Although we think it's too early to declare the economy is in a recession, risk is elevated. For investors who are concerned about a recession, municipal bonds may help buffer a portfolio.
Private Credit Loses Ground in Fight for Family Office Money
It’s the hottest trade on Wall Street. Everywhere you turn, money managers have upped their investments in private credit, helping the asset class balloon into a $1.7 trillion industry. But there’s one group where interest appears to already be waning — the family office.
New Home Sales Surge to 14-Month High
The July release for new home sales from the Census Bureau came in at a seasonally adjusted annual rate of 739,000 units, the highest level in fourteen months. The latest reading came in higher than the 624,000 forecast. New home sales are down 10.6% month-over-month from a revised rate of 668,000 in June and are up 5.6% from one year ago.
Corporate Bond Outlook Is Solid
Recent economic data points have been mixed. On the more positive side of the ledger, there’s evidence that inflation is cooling and consumer spending remains sturdy. Conversely, the jobs market is cooling.
Macro Thoughts – Recalibration or Accommodation
After market expectations spiked to nearly five interest rate cuts in 2024 based on disappointing labor market report early in the month, reassuring data in the form of Retail Sales and Unemployment Claims have quelled market Markets have eased expectations for interest rate cuts, pricing closer to four cuts as of the end of last week.
Kansas City Fed Manufacturing: Activity Declined Less in August
The latest Kansas City Fed Manufacturing Survey composite index did not decline as much in August following a sharper decline last month. The composite index came in at -3, up from -13 in July. Meanwhile, the future outlook increased to 8.
Existing Home Sales Increase in July, Ending 4-Month Skid
Existing home sales rose for the first time since February, ending a four-month skid. According to the data from the National Association of Realtors (NAR), existing home sales were up 1.3% from June, reaching a seasonally adjusted annual rate of 3.95 million units in July. This figure came in just above the expected 3.94 million. Existing home sales are down 2.5% compared to one year ago.
August 2024 Active Management Insights: Positive Outlook for Cyclical and Value-Oriented Stocks
Amid expectations of rate cuts from major central banks, managers are increasing their exposure to more cyclical and value-oriented names, including autos, transportation, and short-cycle industrials.
Strengthen Your Client’s Core with Direct Indexing
Active management can lead to high portfolio turnover and a higher tax bill. Wealth managers might feel that an active strategy could be too inefficient for clients who are sensitive to taxes. Find out how implementing a core-satellite portfolio with a direct indexing core may improve tax efficiency.
In an AI Arms Race, Investors Should Focus on Profit Potential
As the AI halo begins to fade, equity investors are seeking companies that can profit from—and not just pontificate about—artificial intelligence.