LSA Connect

Chart of the Week: Putting the 2007 Recovery in Perspective

Posted on August 13, 2015 by LSAConnect

Click image to enlarge

Entering into the 3^rd quarter of 2015, the US is now 6 years removed from the trough of the 2007-09 recession. The chart above shows the progress of the subsequent recovery over those 6 years, and compares it relative to past recoveries dating back until 1980. The most recent GDP report showed the current economic recovery continues to move in the right direction. The 2^nd quarter annual rate of growth came in at 2.3%, and a previous 1^st quarter contraction of 0.2% was revised to a 0.6% expansion. However, this puts the first half of 2015 at a pace slower than the already meager 2% average annual rate of growth we have been experiencing since 2012. This sluggish growth has led to the weakest economic recovery in postwar history.

SOURCE

Posted in Research | 1 Comment

Weekly Economic Update

Posted on August 10, 2015 by LSAConnect

Economic Update 8-10-2015

Economic data for the week was generally decent, with the ISM manufacturing and non-manufacturing reports showing expansion, an improved willingness of bankers to lend, and a jobs report generally on par with expectations—showing continued growth in a variety of areas.

Equity markets in the U.S. fell with a few mediocre earnings reports and fears of a Fed rate hike sooner than expected. Bonds were oddly mixed, with results dependent on yield curve status. Crude oil continued to struggle, with lower pricing on the week, which brought down commodity markets overall.

Continue reading →

Posted in Economic News | Tagged 1st Quarter GDP, bps, China, Commodities, CPI, Crude oil, crude oil prices, DJIA, ECB, Economic, economic data, economic growth, Economic Update, Emerging Markets, Employment, Energy, Europe, Eurozone, Fed, Federal Reserve, fixed income, FOMC, GDP, Government, Home Sales, Inflation, interest rate, interest rates, Janet Yellen, Japan, Jobless Claims, Jobs Report, LSA, MSCI Europe, oil prices, Portfolio, Q/E, Real Estate, Retail Sales, Russia, S&P 500, S&P500, unemployment rate, utilities | Leave a comment

Chart of the Week: Predicting Rate Changes

Posted on August 5, 2015 by LSAConnect

Chart of the Week: Predicting Rate Changes

Click picture to enlarge

This week’s chart shows just how difficult it is to predict rate changes. The black lines represent five quarters of median forecasts of the yield on the 10-year U.S. Treasury. The orange line represents the actual realized yield during that particular point in time. These forecasted predictions come from the Survey of Professional Forecasters (SPF), as measured by the Federal Reserve Bank of Philadelphia. It is easy to see that forecasters have been too bearish on bonds for the past 10+ years, consistently overestimating future increases in rates.

SOURCE

Posted in Research | Tagged 10-year Treasury, federal funds rate, forecast, interest rates, rate increases | Leave a comment

Weekly Economic Update

Posted on August 3, 2015 by LSAConnect

Economic Update 8-03-2015

Economic data last week was highlighted by a lukewarm GDP report, mixed housing and consumer confidence surveys, but more positive near-term industrial reports. The FOMC meeting statement didn’t offer any radically new insights, as expectations for an initial rate hike continue to be focused on later this year.

U.S. equities performed positively on the week with decent earnings reports, and foreign stocks were largely in line. Bonds also gained as investors apparently felt comfortable with the Fed’s current hints on interest rate policy. Commodities suffered additional losses this week, as crude oil fell below $50/barrel, ending a painful July for the energy patch.

Continue reading →

Posted in Economic News | Tagged 1st Quarter GDP, bonds, bps, China, Commodities, consumer confidence, consumer sentiment, CPI, Crude oil, crude oil prices, DJIA, ECB, Economic, economic data, economic growth, Economic Update, Emerging Markets, Employment, Europe, Eurozone, Fed, Federal Reserve, fixed income, FOMC, GDP, GDP 2nd quarter GDP, Government, Home Sales, Inflation, interest rate, interest rates, Janet Yellen, Japan, Jobless Claims, LSA, MSCI Europe, oil prices, Portfolio, Q/E, Real Estate, Retail Sales, Russia, S&P 500, S&P500, Taper, Ukraine, unemployment rate, Update, Yahoo! | Leave a comment

Fed Note

Posted on July 29, 2015 by LSAConnect

Fed Note:

The FOMC meeting ended today and resulted in no policy changes, as expected.

The meeting was a ‘lighter’ version than normal, meaning there wasn’t a Q&A at the end and the other bells and whistles that accompany major meetings (not all Fed meetings have the same formality). Now, the conversation is focused on what type of rate hike will happen between now and end of 2015. We know it will probably be a 0.25% increment; we just don’t know if we’ll get one (Sept. or Dec.) or two (Sept . and Dec.). Odds seem to be tipped in favor of just one at this time. There’s a Fed meeting in Oct., but, like today, it’s a ‘minor’ meeting with no press conference afterward and no release of new economic/rate projections, so a regime change then is considered unlikely.

In reviewing the dashboard: Continue reading →

Posted in Research | Tagged Fed, unemployment rate | Leave a comment

What’s Happening in China?

Posted on July 29, 2015 by LSAConnect

If you or your clients are unsure what to think of China’s recent 30% stock market plunge, Economist Brian Wesbury does a good job of explaining what is happening in his new video Wesbury 101: China Crisis: Whaddaboutit!

You can find a more detailed explanation in Lord Abbett Economic Insights’s new article China’s Stock Market: Can Beijing Keep It Steady? that should address all your concerns. Let us know what you think!

Posted in Research | Tagged Brian Wesbury, China, China Crisis, detailed explanation, economist, economy, GDP, lord abbett, Lord Abbett Economic Insights, Market, Markets, people's, Shanghai composite, stock market plunge | Leave a comment

Weekly Economic Update

Posted on July 27, 2015 by LSAConnect

Economic Update 7-27-2015

It was a very slow week for economic news, but included a strong showing from housing and jobless claims—two series which have shown improved strength as the recovery moves along.

Equity markets lost ground on the week around the globe, while bonds benefitted from the risk-off environment and lower interest rates. Commodities continued to struggle along with lower oil pricing and concerns over fundamental demand from China.

Continue reading →

Posted in Economic News | Tagged 1st Quarter GDP, China, CPI, Crude oil, crude oil prices, DJIA, ECB, Economic, economic data, economic growth, Economic Update, Emerging Markets, Employment, Federal Reserve, fixed income, FOMC, GDP, Government, Home Sales, Inflation, interest rate, interest rates, Janet Yellen, Japan, Jobless Claims, LSA, MSCI Europe, oil prices, Portfolio, Q/E, Real Estate, Retail Sales, S&P 500, S&P500, Taper, Ukraine, unemployment rate, Update, Yahoo! | Leave a comment

Weekly Economic Update

Posted on July 20, 2015 by LSAConnect

Economic Update 7-20-2015

In a busy week for economic reports, most came in a bit weaker than expected, including retail sales, manufacturing activity and business/consumer sentiment. However, housing continued to experience an uptick.

Stocks gained on the week globally with positive sentiment from improved situations in China, Greece and Iran. Fixed income also performed well, with the mixed economic data and dollar strength which contributed to higher demand for bonds, creating lower rates

Continue reading →

Posted in Economic News | Tagged 1st Quarter GDP, bps, China, Commodities, consumer sentiment, CPI, Crude oil, crude oil prices, DJIA, earnings, ECB, Economic, economic data, economic growth, Economic Update, Emerging Markets, Employment, EPS, Europe, Eurozone, Fed, Federal Reserve, fixed income, FOMC, GDP, Government, Greece, Grexit, Home Sales, Inflation, interest rate, interest rates, Iran, Janet Yellen, Japan, LSA, MSCI Europe, oil prices, Portfolio, Q/E, Real Estate, Retail Sales, S&P 500, S&P500, Update, Yahoo! | Leave a comment

Chart of the Week: Investing in Fixed Income During Periods of a Rising Federal Funds Rate

Posted on July 14, 2015 by LSAConnect

In fear of the inevitable raises of the federal funds rate, many investors are beginning to speculate whether or not fixed income still has a place in their portfolio. With us being about a decade removed since the last time we saw a rate hike, it may be hard to remember that we have been through such periods of rising rates before.

During these periods, the performance of fixed income may surprise you. In the past 20 years, there have been essentially three periods of a rising federal funds rate. Below are three graphs comparing the performance of fixed income (as represented by the Barclay’s US Aggregate) and equities (as represented by the S&P 500) throughout these three periods. The bottoms of these graphs show the excess return of fixed income over equities. Green indicates positive excess return, while red indicates negative excess return. Continue reading →

Posted in Research | Tagged Barclays, Barclays US Agg, Fed, federal funds rate, Federal Reserve, fixed income, rising rates, risk tolerance, S&P 500 | Leave a comment

Weekly Economic Update

Posted on July 13, 2015 by LSAConnect

Economic Update 7-13-2015

In a fairly light week for the economic calendar, data was highlighted by a decent ISM services survey, good JOLTs employment data, but higher claims. The Greece situation remained as the primary global headline, while Chinese stock meltdown and pourover concerns took second place.

Despite higher interday volatility, U.S. equity and fixed income markets ended the week generally flat after all was said and done, as were foreign developed market equities. Emerging markets and commodities generally sold off with carryover concerns surrounding China.

Continue reading →

Posted in Economic News | Tagged 1st Quarter GDP, bps, China, Commodities, CPI, Crude oil, crude oil prices, DJIA, ECB, Economic, economic data, economic growth, Economic Update, Emerging Markets, Employment, Europe, Eurozone, Federal Reserve, fixed income, FOMC, GDP, Government, Home Sales, Inflation, interest rate, interest rates, ISM services survey, Janet Yellen, Japan, Jobless Claims, JOLTS, LSA, MSCI Europe, oil prices, Portfolio, Real Estate, Retail Sales, Russia, S&P 500, Ukraine, unemployment rate, Update, Yahoo! | Leave a comment

Weekly Economic Update

Posted on July 6, 2015 by LSAConnect

Economic Update 7-06-2015

Economic results for the week were again mixed, with some manufacturing data showing up better than expected, housing results decent, confidence higher and a mediocre employment situation report at the end of the week. Most attention was outside of the U.S., on the Greek situation.

Equities fell on the week in line with disappointment about the lack of agreement between Greece and the rest of Europe on a bailout plan, while domestic bonds ended slightly above zero as rates fell slightly. Commodities were also mixed, as agricultural contracts rose dramatically but oil prices declined.

Continue reading →

Posted in Economic News | Tagged Brazil, China, Commodities, CPI, Crude oil, crude oil prices, DJIA, ECB, Economic, economic data, economic growth, Economic Update, Emerging Markets, Employment, Europe, Eurozone, Fed, Federal Reserve, fixed income, FOMC, GDP, Government, Greece, Home Sales, India, Indonesia, Inflation, interest rate, interest rates, Janet Yellen, Japan, Jobless Claims, LSA, MSCI Europe, oil prices, Portfolio, Q/E, Real Estate, Russia, S&P 500, S&P500 | Leave a comment

Weekly Economic Update

Posted on June 29, 2015 by LSAConnect

Economic Update 6-29-2015

Economic data for the week was dominated by slightly worse-than-expected durable goods orders, while several pieces of housing data surprised on the upside and the first quarter GDP figure was revised higher to just under zero.

Both domestic equity and fixed income markets fell on the week, highlighted by concerns in Greece and higher interest rates; however, foreign markets (including Europe) gained. Commodities managed an increase despite a stronger dollar, led by the agricultural group.

Continue reading →

Posted in Economic News | Tagged 1st Quarter GDP, bps, China, Commodities, CPI, Crude oil, crude oil prices, DJIA, dollar, ECB, Economic, economic data, economic growth, Economic Update, Emerging Markets, Employment, euro, Europe, Eurozone, Fed, Federal Reserve, fixed income, FOMC, GDP, global markets, Government, Greece, Grexit, Home Sales, IMF, Inflation, interest rate, interest rates, Janet Yellen, Japan, Jobless Claims, LSA, MSCI Europe, oil prices, Portfolio, Q/E, Real Estate, Retail Sales, Russia, S&P 500, S&P500, unemployment rate, Update, usd, Yahoo! | Leave a comment

LSA Connect

Chart of the Week: Putting the 2007 Recovery in Perspective

SOURCE

Weekly Economic Update

Chart of the Week: Predicting Rate Changes

Click picture to enlarge

SOURCE

Weekly Economic Update

Fed Note

What’s Happening in China?

Weekly Economic Update

Weekly Economic Update

Chart of the Week: Investing in Fixed Income During Periods of a Rising Federal Funds Rate

Weekly Economic Update

Weekly Economic Update

Weekly Economic Update

Subscribe Today!

LSA Facebook Page

LSA Movie

Recent Posts

Categories

Archives

Top Posts & Pages

Blog Stats