Weekly Economic Update

Economic Update 4-22-2019

  • Economic data for the week included stronger-than-expected retail sales, jobless claims and a tighter trade deficit, several regional manufacturing indexes showed mixed results, while housing starts again struggled.
  • In a shortened week, U.S. equity markets were mixed, while foreign stocks gained slightly. Bonds were generally flat with little change in underlying interest rates. Commodities fell slightly, with a minimal rise in crude oil offset by declines in other sectors.

Continue reading

Advertisements
Posted in Economic News | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Weekly Economic Update

Economic Update 4-15-2019

  • In a light week for economic data, producer and consumer prices rose a bit more than expected on the headline side, due to higher recent energy prices. Positive news included jobless claims again reaching multi-decade lows, while, on the negative side, the government JOLTS report indicated fewer job openings.
  • Global equity markets experienced gains for the week, with foreign stocks helped by a weaker dollar. However, bonds fell back as interest rates ticked higher and the treasury yield curve again turned positive for the most part. Commodity indexes gained due to higher prices for crude oil and agriculture.

Continue reading

Posted in Economic News | Leave a comment

LSA Stock Models

www.LSAstockIQ.com

In partnership with FusionIQ, a leading investment research and technology provider, LSA now offers access to proprietary investment research and Adaptive Dynamic Portfolios (ADPs) on a SUBSCRIPTION basis.

We invite you to learn more about our proprietary algorithm for scoring stocks.  Please join us for an informative webinar and make sure to take advantage of our complimentary two week trial at www.LSAstockIQ.com.

Please join us Tuesday, April 9th, to register:  CLICK HERE

 

Posted in Uncategorized | Leave a comment

Weekly Economic Update

Economic Update 4-08-2019

  • Economic data for the week featured a decline in ISM services, retail sales and durable goods orders, while the employment situation report showed decent recovery growth from poor winter results in prior months, ISM manufacturing measures rebounded and jobless claims again reached multi-decade lows.
  • U.S. equity markets gained on the week, with positive economic and labor data, as did foreign equities with the better sentiment. Bonds, however, suffered declines as long-term interest rates ticked higher. Commodities rose due to continued gains in the price of crude oil, as well as agriculture.

Continue reading

Posted in Economic News | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Weekly Economic Update

Economic Update 4-01-2019

  • Economic news for the week included a downward revision to last quarter’s economic growth in the U.S., mixed housing results, manufacturing sentiment and consumer sentiment, but a stronger trade balance.
  • U.S. equity markets gained ground last week, while foreign stocks declined a bit, after being negatively affected by a stronger dollar. U.S. bonds rose for another week, with slower global growth pulling down interest rates and future expectations for yields generally. Commodities were mixed, with oil prices creeping upward slightly.

Continue reading

Posted in Economic News | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Weekly Economic Update

Economic Update 3-25-2019

  • Economic news for the week centered on the U.S. Federal Reserve’s decision to leave rates unchanged, but, more importantly, revised expectations toward no further rate hikes in 2019. Manufacturing sentiment surpassed expectations, as did data for housing, jobless claims, and a composite of leading economic indicators. However, weaker data abroad appeared to outweigh these benign results.
  • Global equity markets bounced around in the positive during the week before ending in the red by Friday. Due to investor risk aversion away from stocks, bond markets rallied as yields fell to lows not seen in months. Commodities gained a bit, due to slightly higher oil prices, but other segments ended the week mixed.

Continue reading

Posted in Uncategorized | Leave a comment

Fed Update

Fed Note:

The March FOMC meeting ended as many predicted—with no change to the fed funds rate, which is currently set at 2.25-2.50%. Regardless, the meeting was closely watched in terms of how the Fed planned to communicate a stance on policy for the remainder of 2019.

The formal statement noted a slowing in economic growth from the last meeting in January, including slower growth in household and business spending, while employment remained strong and inflation remained lower recently. The summary of economic projections, released quarterly, showed a downgrade in the ‘dot plots’ (which are generally averaged visually) to essentially zero implied rate changes for 2019, and perhaps only a handful at best over the next few years.

Investors were also watching for signs of a change in current or future policy regarding the runoff of the large Fed balance sheet (which it announced will taper off and in September). While the runoff had been described as being on ‘autopilot,’ fears have increased over an unreviewed runoff amount becoming excessive, essentially resulting in a ‘tapping of the policy brakes’ at the long-end of the treasury yield curve and perpetuating higher rates than ideal. One tweak is that maturing agency MBS will eventually be invested in treasuries instead—in keeping with the Fed’s preference for using treasuries as a purer policy tool and exiting the mortgage market, the participation in which was less ideal long-term as it implies a nudge toward helping housing markets (not part of the Fed’s mandate).

One very interesting development has been the change in Fed Funds futures market probabilities. Late last year, it was largely assumed the Fed would hike perhaps 1-2 times in 2019, a downgrade from the 3-4 many first expected based on the pace of rate hikes last year. As global uncertainty has increased, including the mixed bag of economic data showing deceleration in a variety of areas, this has since morphed into a market expectation for ‘no change’ this year, which has been in conflict with the Fed’s own estimates. Now, the tide has completely turned, with market probabilities for December showing 70% no change and 30% for a 0.25% or more rate cut. This would have almost unthinkable not that long ago, but worries over a possible slowdown into recession have begun to dominate market psyche. A variety of market strategists continue to believe the underlying economy is stronger than it looks, and could easily still handle a hike or two. Within reason, a few hikes could help the Fed with more ammunition to fight the next recession through room to cut rates at that time as needed.

Also interestingly, the Fed is reviewing its approach toward inflation targeting this year, and it is quite possible they could move toward an ‘averaging’ method. This would treat the 2% policy target as a multi-year objective, as opposed to a full-time anchor. What this means is if inflation were to run below target, such as during a recessionary period, it may be later allowed to run ‘hot,’ for example perhaps a half-percent higher than target during a subsequent expansion—resulting in a net result near target for the cycle as a whole. Such a method would give the Fed greater flexibility for interest rate policy, but not having been used up until now, we don’t know what any potential side effects could be from such a change. No doubt there will be more to come on this discussion.

The dashboard of key Fed mandates shows a little-changed story, despite what one might assume from the whipsaw in market sentiment over the past few months:

Continue reading

Posted in Economic News | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Weekly Economic Update

Economic Update 3-20-2019

  • A busy week for economic data included stronger-than-expected results in retail sales, durable goods, construction spending, consumer sentiment and several jobs indicators, while industrial production fell short. Several inflation measures also came in a bit lower than anticipated.
  • U.S. and foreign markets both experienced solid gains for the week. Bonds also fared positively, led by riskier sectors, such as high yield and emerging markets. Commodities gained along with a weaker dollar and higher pricing for crude oil.
  • U.S. stocks fared well during the week, as economic data on the macro side was supportive of fundamentals, although offering few big surprises. Optimism persists over a potential U.S.-China trade deal in coming weeks, along with a Chinese pledge last week to not rely on currency devaluation as a trade leveraging tool.

Continue reading

Posted in Economic News | Tagged , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Weekly Economic Update

Economic Update 3-11-2019

  • Economic data for the week, with a delayed schedule still affected by the government shutdown, showed positive results for ISM non-manufacturing/services and housing, coupled with a lackluster February employment report, which looked to have strongly negative winter weather effects.
  • Equity markets declined by several percent globally, due to concerns over world growth, with a stronger U.S. dollar punishing local returns a bit more for foreign stock markets. In fixed income, safe haven U.S. government bonds gained ground, while high yield struggled. Commodities were little changed, in keeping with a rare calm week for crude oil prices.

Continue reading

Posted in Uncategorized | Leave a comment

Weekly Economic Update

Economic Update 3-04-2019

  • Economic data for the week consisted of prior quarter GDP growth coming in late but a bit better than expected, mixed results for housing and consumer sentiment, while ISM manufacturing and jobless claims were weaker.
  • U.S. equity markets gained slightly, as did those in foreign developed markets, while emerging markets declined. Bonds lost some ground as interest rates increased. Commodities fell, led by declines in multiple segments, including the price of crude oil by several percent.

Continue reading

Posted in Economic News | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Weekly Economic Update

Economic Update 2-25-2019

  • Economic data for the week consisted of weaker results from durable goods orders and a key regional manufacturing index, as well as a lower existing home sales. An index of leading economic indicators was flattish, with incomplete data. However, jobless claims and homebuilder sentiment improved.
  • Global equity markets earned positive returns again, as sentiment stayed buoyant, and emerging markets leading the way. Bonds were flat, in keeping with minimal changes in interest rates. Commodities rose as the result of gains in industrial metals, natural gas and crude oil.

Continue reading

Posted in Economic News | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Weekly Economic Update

Economic Update 2-19-2019

  • Economic data for the week included poor showings from retail sales and industrial production, in addition to higher jobless claims; inflation came in relatively muted on a producer and consumer basis; on the positive side, manufacturing and consumer sentiment survey data were better than expected.
  • U.S. equity and developed foreign markets experienced sharp gains on the week, outperforming weaker results in emerging markets. Bonds were little changed, other than riskier debt outperforming treasuries. Commodities pushed higher on the back of a strong week in crude oil.

Continue reading

Posted in Economic News | Leave a comment