TIMELY MARKET UPDATES
Financial Conditions, Retail Sales, Government Debt
The financial markets are working in the Federal Reserve’s favor, as interest rates across the yield curve hit 5% this week. The tighter financial conditions are weighing on asset prices but, so far…
3Q23 Review and Outlook: Narrow Market Leadership, “Higher for Longer” Interest Rates, and a Potential New Wave of Inflation
The majority of the returns of the S&P year-to-date can be attributed to just 7 companies. The tailwind that government stimulus provided to the economy is likely over given current deficits and the high…
Peak Oil, Construction Spending, Equity Sentiment
The International Energy Agency (IEA) revised their oil demand forecast to a new all-time high, surpassing the prior peak in 2019. The price of oil has displayed its signature volatility of late…
Real Rates, Crack Spreads, Unemployment
Interest rates hit new highs mid-week, bringing the 10-Year U.S. Treasury Yield back to its long-term average for the first time since 2007. Interest rates are now well in excess of trailing inflation…
Fed Forward Guidance, Earnings Estimates, Government Shutdowns
The Federal Open Market Committee (FOMC) left short-term interest rates unchanged, but their forward guidance spooked the markets. The committee also updated their economic projections to reflect the…
Consumer Prices, Oil, the Magnificent Seven
Rising energy prices pushed the Consumer Price Index (CPI) to its largest monthly change in over a year but, below the surface, the increase in core CPI remained subdued. The price of oil is now at…
The Labor Market, Operating Margins, Excess Savings
Job growth continued in August, but the unemployment rate unexpectedly ticked up as the labor force increased. Employment remains strong, but the gains are slowing and new entrants to the labor force…
The “Long and Lagged” effects of Interest Rates: Corporate Interest Rate “Lock-in”
For the past few quarters, our positive firm view on the homebuilding sector has been in large part due to the idea of “interest rate lock-in” for existing homebuyers. Put simply, homeowner’s existing mortgages…
The Economy, Business Investment, Consumer Spending
Inflation continues its downward trajectory, and economic growth may be accelerating. Accelerating growth may keep interest rates higher despite lower inflation. While this may create a confusing…
Consumer Headwinds, China, Artificial Intelligence
Sentiment on the strength of the U.S. economy has improved dramatically over the past couple of months, but there may be headwinds on the horizon for U.S. consumers. Lenders are tightening credit…