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Chinas Retaliation
Our Daily Commentary from August 25 summarizes a SimpleVisor stock scan, highlighting companies with high sales exposure to China. The article states: “Once again, trade tensions are heating up with China as President Biden signed an executive order to limit U.S. investments in Chinese technology companies for national security concerns. China says a response is […]
Sep 8, 2023
The Stock Bond Relationship Is Shifting Again
The top graph below charts stock prices and bond yields. The smaller graph below shows the rolling ten-day correlation of stocks (SPY) and bond yields (10-yr UST). The higher the correlation, the stronger the relationship between stock prices and bond yields. Conversely, the weaker the correlation, the more stocks and bond yields move in opposite […]
Sep 7, 2023
Another Government Shutdown May Be Coming
Three months ago, Congress and the President avoided a shutdown and default on government debt when they agreed to increase the Treasury’s spending cap. Unbeknownst to many, another potential government shutdown may come in less than a month. Lawmakers need to agree on the fiscal budget for 2024, which starts on October 1, 2023. A […]
Sep 6, 2023
Student Loans Set For Repayment Will Dampen The Economy
Starting last Friday, interest began accruing on student loans, and on October 1, payments will be due. Over three years ago, the CARES Act allowed student loan forbearance until September 2020. It was ultimately extended multiple times. As payments begin, the weight of student loan payments will dampen consumption and economic activity. The question is- […]
Sep 5, 2023
GDI Or GDP – 2 Economic Measures, 2 Different Messages
Gross Domestic Product (GDP) and Gross Domestic Income (GDI) are two very similar measures of economic activity. The difference is that GDP measures output, while GDI assesses income. In both theory and history, these two measures should tell the same economic story. Historically, GDI has proven to be more reliable but is less followed as […]
Sep 1, 2023
JOLTS And ADP – A Jobs Preview
Tuesday’s JOLTS report and Wednesday’s ADP point to a sudden weakening of the labor markets. The JOLTS report (Job Openings and Labor Turnover Survey) produced by the BLS showed the number of job openings fell by 338k to 8.8 million. As shown below, job openings are falling almost as rapidly as they rose in 2020 […]
Aug 31, 2023
Retailers Are Struggling Hinting At Weakening Consumers
Retailers did well over the last few years as consumers were flush with savings. Reduced spending during the early parts of the pandemic, coupled with stimulus and other benefits from the government, led to abundant consumer savings and a spending surge. In Department Stores Are Maxed Out, the Wall Street Journal says the tide may […]
Aug 30, 2023
MACD Bounce To New Highs?
The MACD, or moving average convergence divergence, is a well-followed technical indicator that helps spot changes in the momentum and strength of a trend. The MACD is the difference between a longer and shorter-term moving average, while its signal is a shorter-term moving average. Like any technical indicator, it is not perfect, but the MACD […]
Aug 29, 2023
Chair Powell Says Nothing New
The much-anticipated speech by Chair Powell at the annual Fed Jackson Hole Symposium shed little new light on the course of monetary policy. Chair Powell opened the address by stressing their number one goal: “It is the Fed’s job to bring inflation down to our 2 percent goal, and we will do so.” His statement […]
Aug 28, 2023
The Neutral Rate Takes Center Stage
Jerome Powell presents the Fed’s keynote speech for its annual Jackson Hole symposium this morning. It is widely expected he will continue to discuss familiar themes such as sticky inflation and the need to keep rates higher for longer. He will likely favor another rate hike or two if needed to slow economic activity and […]
Aug 25, 2023
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