LSA Connect

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.

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

Weekly Economic Update

Posted on June 23, 2015 by LSAConnect

Economic Update 6-22-2015

Economic data for the week was somewhat mixed in both the industrial and housing areas; this fell along the same theme leading to inaction by the Fed following the week’s FOMC meeting.

Equity markets rose in the U.S., while foreign equities fell back. Fixed income generally benefitted across the board from lower interest rates and, abroad, from a weaker dollar. Commodities were mixed to negative as crude oil prices remained contained with a recent tighter range.

Continue reading →

Posted in Economic News | Tagged 10-year Treasury, bps, China, Commodities, CPI, Crude oil, crude oil prices, DJIA, ECB, Economic, economic data, economic growth, Economic Update, Emerging Markets, Employment, equities, ETF, Europe, Eurozone, Fed, Federal Reserve, fixed income, FOMC, GDP, Government, Home Sales, Hong Kong, Inflation, interest rate, interest rates, Janet Yellen, Japan, Jobless Claims, LSA, market cap, Morgan Stanley, msci, MSCI Europe, MSCI index, oil prices, Portfolio, Real Estate, reits, Retail Sales, S&P 500, S&P500, unemployment rate, Update, Yahoo! | Leave a comment

Fed Note

Posted on June 17, 2015 by LSAConnect

Since the start of the year, investors and economists have been focused on this month’s FOMC meeting; specifically, whether or not this would be ‘the one’—the meeting that announced a change in regime, from extreme emergency accommodative low rates to the start of tightening. Due to sporadic data since that time, it became more obvious over time that it was not to be.

The statement language reflected a moderate expansion of economic growth and job gains in recent months, while acknowledging the mixed nature of consumer spending, housing and business capex.

Many look at the ‘dot plot,’ which is a graph attached to the official statement showing the path of rates expected by FOMC members over the next several years—changes in these dots from last meeting are interpreted as a sentiment shift. As it stands, it appears the general expectation is a raising of rates twice by the end of 2015 (probably in the fall, as the July meeting doesn’t feature a press conference). It’s almost hard to believe, but two years hence—by end of 2017—members expect fed funds rates to be at 3% or so (given a range of +/- 0.5% in either direction).

A look at the dashboard: Continue reading →

Posted in Economic News | Tagged economic growth, FOMC meeting, headline inflation, unemployment rate | Leave a comment

Weekly Economic Update

Posted on June 15, 2015 by LSAConnect

Economic Update 6-15-2015

Economic data from last week looked a bit stronger, with some positive surprises from retail sales and a few sentiment surveys; the JOLTs and jobless claims reports, however, disappointed.

Despite some day-to-day volatility in equity markets and recent trends higher for interest rates, on net, U.S. stock and bond markets ended very little changed. However, a falling dollar helped foreign indexes inch higher. Commodities also gained, led by stronger pricing in energy.

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, Fed, Federal Reserve, fixed income, FOMC, GDP, Government, Home Sales, Inflation, interest rate, interest rates, Janet Yellen, Japan, LSA, MSCI Europe, oil prices, Portfolio, Q/E, Real Estate, Retail Sales, Russia, S&P 500, S&P500, Update, Yahoo! | Leave a comment

LSA Connect

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

Weekly Economic Update

Fed Note

Weekly Economic Update

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