4 Apr 2016

The Real Unemployment Rate

The Bureau of Labor Statistics (BLS) reported that total non-farm payrolls rose by 215,000 in March, lower than February’s upwardly revised 245,000 figure, but ahead of the consensus estimate of 205,000.  January was also revised downward to 168,000 from 172,000. The unemployment rate ticked up from 4.9 percent to 5.0 percent reflecting a large increase in the labor participation rate which increased six-tenths of a percent in the last six… Read More

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7 Mar 2016

Employment Data Supports Stocks

Payrolls rose 242,000 last month versus consensus estimates of 195,000 and an upwardly revised 172,000 reading from January. The unemployment rate held steady at 4.9 percent while the U6 unemployment measure that includes workers who are part time purely for economic reasons, dropped to 9.7 percent – the low for this cycle. Average hourly earnings declined -0.1 percent versus expectations for a positive print of 0.2 percent.  On a year-over-year… Read More

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9 Feb 2016

Why This Isn’t Another 2008

In December of 2008, I went to a new client meeting and made a call: ‘I don’t think we are in a second Great Depression.’ With the benefit of hindsight, that doesn’t seem like much of a prediction, because we know after the fact that gross domestic product (GDP) only fell -4.3 percent during the 2008 global financial crisis, which is small compared to the estimated -15.0 percent decline in… Read More

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18 Dec 2015

Fed Euphoria Fades

There was fairly downbeat sentiment surrounding commodities and commodity-linked stocks yesterday.  The Bloomberg Commodity index hit its lowest level in 16 years, and is close to setting an all-time low since its launch in 1991. Not surprisingly, the dollar’s strength (up 1.93 percent yesterday and 9.66 percent year-to-date) in the wake of the Fed liftoff yesterday has been getting a lot of attention. Some investors thought that the increase in rates… Read More

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7 Dec 2015

Stocks Pop on Unemployment Data

Confirm payrolls for November rose 211,000, above the consensus estimate of 200,000, which follows the strong and upwardly revised October reading of 298,000 new jobs.  The unemployment rate held at five percent and the labor force participation rate rose slightly to 62.5 percent from 62.4 percent. After the terrible showing on Thursday, ‘Super Mario’ Draghi flew to New York and spoke at an Economic Club event.  Knowing that his communications the day before had… Read More

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4 Dec 2015

Mario Draghi Taketh Away

Back in 2012, Draghi famously said that the ECB was ready to do ‘whatever it takes’ to preserve the euro. Although he was talking about keeping peripheral countries within the euro during their sovereign debt crisis, the ECB has developed a reputation over the past few years for exceeding investor expectations with their economic stimulus programs. That ended yesterday when the ECB failed to deliver the stimulus that markets were… Read More

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28 Sep 2015

The Possible Impact of a Housing Slowdown in China

Vanguard put out an interesting research piece on Friday, which you can read in full here, arguing that the bursting stock market bubble in China isn’t as big of a risk as a potential fall in their housing market. According to their research, housing is a much larger portion of total household wealth than stock ownership, which is the opposite of the US.  In China, housing makes up 43 percent… Read More

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23 Sep 2015

What Investors are Anxious About

Although there was no specific catalyst for yesterday’s trading action, investors are clearly worried about global growth.  The chart below shows the most recent Forecasts from the International Monetary Fund (IMF) that were produced in July. While the global growth picture is flat and advanced economies are growing, according to their projections, emerging markets and China are slowing down.  This isn’t news: the market volatility that we’ve been dealing with… Read More

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11 Sep 2015

Debt Ceiling, Here We Come (Again)

Earlier this week, Ryan Craft and I went to Washington DC for a full day of presentations put on by Macroeconomic Advisors. We heard from some of the country’s top economists, including the Director of the Congressional Budget Office (CBO) and the Chairman of the White House’s Council of Economic Advisors (who also happened to be Hollywood superstar Matt Damon’s freshman roommate at Harvard). While I plan to share some… Read More

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31 Aug 2015

Stocks and the Real Economy

One of the interesting comments that I read in the early part of last week when markets were falling was that financial markets were doing poorly while the real economy was doing reasonably well. Over the last five years, I’ve heard people say countless times that we’ve had a nice recovery in financial assets while the real economy has sputtered along at growth rates well below our historical long-term trend… Read More

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