Inflation is often feared to be a self-fulfilling prophecy, as consumers and businesses that expect higher prices mayinadvertently fuel inflationary pressures themselves. For example, consumers may ask for a raise or accelerate purchases to front-run rising prices, while businesses may hike prices in anticipation of higher input costs.… Read More
Last week, the Middle East conflict escalated with the tragic attacks on U.S. troops and more threats on ships in the RedSea. Along with causing more volatility in oil prices, the conflict is negatively impacting global maritime trade. Just inthe past two months, traffic through the Suez Canal, which handled 12-15% of global maritime trade in 2023, has beenreduced by 42% according to the UN.… Read More
After a two-year stretch marked with significant uncertainty, the S&P 500 overcame the “wall of worry” about a potentialhard landing for the U.S. economy, achieving a new all-time high on Jan. 19 and notching successive highs for fivestraight days last week.… Read More
The week in review– Retail sales: +0.60% m/m– Retail sales ex-auto: +0.40% m/m
The week ahead– 4Q23 real GDP (first estimate)– Markit PMIs (prelim.)
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weekly_market_recap_01-22-2024
Over the past two years, the Federal Reserve’s aggressive monetary tightening lifted short-term interest rates to theirhighest levels since the early 2000s. As a result, investors pounced on cash-like products for both safety and incomein 2023, pushing money market fund assets to a record high $5.98 trillion, and this number is still climbing.… Read More
After moving sideways during the first half of 2023, the dollar continued its decline to end 2% down in 2023 (now-11% from its October 2022 peak). In fact, it depreciated against almost every major DM currency except theJapanese yen. After over 10 years of dollar strength, could this be the start of a new cycle?… Read More
2023 market returns presented a mirror image to the declines of 2022. Despite recession fears stoked by tightmonetary policy, banking sector hiccups and elevated geopolitical tensions, all asset classes, save one, experiencedpositive returns.
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weekly_market_recap-1-1-2024
Christmas appears to have come early this year, as investors were given much to celebrate this holiday season.Most notably, at the most recent FOMC meeting, Fed Chairman Jerome Powell and his fellow Federal Reservecolleagues “gifted” investors with a “turtle” dovish pivot, sparking a rally in both stocks and bonds.… Read More
Last week’s retail sales report surprised to the upside, with total retail sales increasing 0.3% m/m on a seasonallyadjusted basis in November. Excluding auto and gas, retail sales increased 0.6% m/m, up from 0.1% growth in October.
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weekly_market_recap-12-18-2023
This year, markets and the Federal Reserve have repeatedly danced the tango, with markets moving forward in anticipation of early interest rate cuts and then stepping back to realign with “Fedspeak” on inflation and the labor market. As the year draws to a close, the dance has resumed.… Read More