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Weekly Update


 

Inflation Remains Tame

Jerome spoke and the markets certainly listened. At least three of his talks last week were followed closely by the markets and after he all but guaranteed a cut in the Fed’s baseline interest rate (possibly as soon as this month), stocks rallied. Domestic equities increased by 73 bps, led by large cap issues. Commodities also received a boost as the price of oil, which aside from OPEC often tracks the global economic outlook, rose over 4.5% for the week. Adding further fuel to the rally were the latest inflation figures that, once again, showed this data point to continue its benign ways. Both the PPI and CPI rose by a mere 0.1% last month.  Continue Reading…

When Jerome Powell speaks…

Well, I guess Jerome Powell is speaking this week. As can be seen below in the Upcoming Events section of this Weekly Update, the head of the FOMC is speaking Tuesday, Wednesday and Thursday. Nothing new here, but the fact it’s on most everyone’s radar screen tells us all eyes are on the Fed for any hint on the future direction of interest rates. With a solid job creation report coming in last month (224,000 new jobs), worries of an imminent economic downturn were neutralized for the moment and that created concern that the Fed would not lower rates soon.  Continue Reading…

Halfway Through 2019

Hard to fathom, but we are now half‐way through 2019. And on that note, domestic equities have turned in their best first six
months in 22 years. Though they were slightly off last week, their YTD total stands at 18.7% ‐ the best performing asset class of those tracked on this update. Foreign shares have increased 14.5% so far while developed markets are doing much better than emerging. And while fixed‐income investing has significantly trailed equities, domestic fare has increased by 6.1% with foreign issues at 6.3%. Not a bad first half at all.  Continue Reading…

Fed Goes Dovish

Global equities rallied, gaining over 2% in the domestic market and emerging market equities up 3.84%. Gains were fueled by a dovish Fed, encouraging news in ongoing U.S./China trade negotiations, and the President’s last‐minute decision to call off a retaliatory attack against Iran. The Fed reinforced investor expectations for a rate cut later this year, signaling a willingness “as appropriate to sustain the expansion.”  Continue Reading…

Focus is Back on the Fed

To begin, the Bureau of Labor Statistics provided further evidence that inflation is nowhere in sight as both the PPI and CPI
increased by a scant 0.1% last month. Over the trailing year, they are at 1.8% ‐ below the Fed’s long‐term goal of 2.0%. And
overseas, the main story is the continued weak economic performance of China.  Continue Reading…

Geopolitical Cloudiness

The second reading of first quarter GDP was released last week, and this official estimate was revised slightly downward to 3.1% from the initial estimate of 3.2%. No big deal as no one seemed to care. Why? Well, it was all about geopolitical tweets and counter‐tweets as various trade threats came through social media and threw the markets into a tailspin.  Continue Reading…

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