Economy and financial markets point in different directions ahead of Wednesday’s Fed meeting
Pity the poor Federal Reserve. In making decisions about interest rates–in this case about whether or not to raise interest rates at its June, July or September meetings–it has to consider the condition of both the real economy and the financial markets. And right now...
Voting heavy in Brexit referendum despite heavy rains in London and southeast
Despite torrential rains in London and the southeast of England, polling places are reporting long lines for today’s Brexit referendum vote. Before the actual vote, a BMG Research poll for the Electoral Reform Society found that 67% of people said they would...
UK voters decide to leave European Union–What’s next (Part 1 short term effects)?
By a surprisingly large margin of 52% to 48% the United Kingdom voted to leave the European Union in Thursday’s Brexit referendum. Global financial markets plunged in a decline all the more dramatic because traders and investors had decided on Wednesday that the...Core U.S. inflation rate accelerates to normal
Two ways to look at this morning’s U.S. inflation data. First, the Consumer Price Index (CPI) came in above expectations with a 0.4% increase in January. Economists had expected a 0.3% increase, according to Briefing.com. That puts the headline inflation rate at an...Crucial news is on the calendar this week for those who believe in a stronger than expected U.S. economy in 2011
Major events this week for those investors—and I put myself in the number—who believe that the U.S. economy will beat expectations this year—and take U.S. stocks upward with it. The Federal Reserve meets for the first time in 2011 on Tuesday and Wednesday of this week...GDP growth of 2.6% is a slight disappointment but better than a poke in the eye from a sharp slump
Not as good as wished, perhaps, but I’ll take it. Yesterday’s (December 22) third revision to the third quarter U.S. GDP numbers pushed growth for the quarter up to 2.6%. The first estimate had put growth at 2% and the second had bumped growth up to 2.5%. Economists...Fourth quarter GDP growth looking better than expected
Another number that points to stronger than expected U.S. economic growth. U.S. exports rose 3.2% in October to $159 billion, according to data released on Friday, December 10. That’s the highest level since the middle of 2008. With a dip in imports, down 0.5% in...Will higher stock prices lead the economy upward? Latest Fed numbers on family net wealth say it could be happening
The Federal Reserve may not be having much luck using its $600 billion quantitative easing program to reduce interest rates in order to stimulate the economy—the yields on 10-year Treasuries are climbing–but it looks like the wealth effect might be ready to ride...Trying to figure out how long the U.S. has to get its financial house in order? History says longer than you think but not forever
The world has a fair deal of experience in dealing with small countries that can’t pay their bills. And the world is gaining more experience by the minute. Greece can’t pay its bills? Put together a funding package that comes at the price of domestic austerity and...Wall Street economists score the tax deal: $1 trillion in cost to get 0.5% increase in GDP growth in 2011
Yesterday the stock and bond markets weighed in on the proposed deal between the Obama administration and Congressional Republicans to extend the Bush administration tax cuts. Nothing unexpected there: bonds went down on the certainty that the proposal would add to...Bad news on jobs and from the Fed is not so much worse than the stock market was expecting
The government employment numbers were a slap in the face on Friday. But the market seemed unrattled. After way better than expected retail sales and pending home sales numbers, and an optimistic employment survey from ADP, the Bureau of Labor Statistics announced on...The U.S. is the champion stock market in the world–at the moment–although its reign is likely to be rather short
When you’re being chased by a bear, you don’t have to run faster than the bear; you just have to run faster than the other guy. Good advice when you’re camping in bear country. Good advice, too, when you’re thinking about how to allocate your money in the current very...Volatility ahead in 2011–and how to live with it (and maybe even profit)
Last Friday, November 19, I sketched out a picture of a very volatile 2011 (https://jubakpicks.com/2010/11/19/5882/ ) and said that today I’d take my best shot at a strategy for how to invest through that turbulence. I probably shouldn’t be telling you this, but most...Third quarter GDP comes in on projection; unlikely to change Fed's decision next week
he first estimate for third quarter U.S. GDP growth came in right on projections at 2.0%. That was up from the 1.7% growth rate in the second quarter but below the 3% or so growth rate needed to cut significantly into unemployment. Housing was the big drag on the...Durables disappoint but order backlogs rise so no big worry–yet
Last month I argued that the headline number for durable orders—a 1% drop for August—wasn’t significant since it was driven by typical month-to-month volatility in airplane orders. The timing of twenty or so airplane orders as they fall in one month or the other can...Update Cummins (CMI)
I’m starting to see a new pattern in third quarter earnings reports. Now to see if it continues through the end of earnings season. What’s the potential pattern? Companies that announce great earnings but that still don’t measure up to Wall Street expectations. The...Look for this week to end with a bang: We get first-look third quarter GDP numbers on Friday.
Two economic announcements this week have the power to move stocks. And right now the consensus among economists is moving toward a belief in better than projected numbers. The big number comes on Friday, October 29, with the first estimate of third quarter GDP....Watch out for 2011–that's when the global economy is projected to be weakest
Not exactly unexpected but still surprising. On October 6 the IMF (International Monetary Fund) released its forecast for global economic growth 2010 and 2011. Once again developing economies will lead global growth. Nothing unexpected there. But what is surprising is...Getcha predictions here: My scorecard for the fourth quarter
It’s a new quarter. Do we know any more about the trend in the stock market and the economy than we did at the start of last quarter Well, actually a little bit. I don’t think we’re at “Bet the farm” certainty, but figuring out the trend isn’t quite as confounding as...How to fix the U.S. economy? First, no more baby steps
I haven’t been able to sleep ever since I read that Larry Summers is leaving his post as President Barack Obama’s top economic advisor. Why doesn’t the phone ring? I’m eating with it at my elbow. I’ve changed the way I walk to work to avoid cell phone dead zones. I’m...Update Cummins (CMI)
Right now, for this point in the economic recovery, I’d much, much rather own capital equipment stocks than consumer stocks. As I noted in my post on September 24, report on orders for durable goods, corporate customer are buying capital goods to expand and upgrade...While consumers sit on their wallets, businesses spend
The bifurcated U.S. economic recovery keeps on bifurcatin’. While the U.S. consumer still can’t seem to open his or her wallet (and with official unemployment stuck near 10%, who can blame consumers for being hesitant about spending), businesses keep on ordering...Buy Gerdau (GGB)
Brazilian steel maker Gerdau (ADR: GGB) is on the march in the U.S. steel market and back home in Brazil. In the United States: in August, the company acquired the remainder of the shares of its 66% owned U.S. subsidiary Gerdau Ameristeel. That gives Gerdau a wholly...Is the economy stronger than the numbers say?
There’s good reason to suspect that the early September rally that began on September 1 is going to peter out. From 1049 at the close on August 31, the Standard & Poor’s 500 stock index had climbed 7% by September 13. That’s 7% in just seven trading sessions. It’s...The Fed reads the papers too–and this week's plunge in home sales scares Bernanke and Co.
The numbers released on August 24 on sales of existing homes may even scarier than they look. Scarier than a 27% drop in July to an annual sales rate of just 3.83 million? Scarier than the lowest annual sales rate in the 15 years this number has been recorded? Well,...Here's how the tide is running in earnings season–and some ways to profit from the flow
We’re just a little bit more than a week into earnings season and already some themes have started to emerge from the numbers. Nothing definite. Call them “tendencies.” But I’m finding connections among the results—and the investor reaction to the results that will be...What one indicator is saying about the global economy
A bottom with no near-term upside catalyst. I’m afraid that fits the global economy, the U.S. stock market, and the Baltic Dry Index. The Baltic Dry Index, a widely followed, but very volatile, indicator of global economic activity, is showing signs that it...The big news from Alcoa isn't earnings but a forecast of faster global growth
The big news—the news that’s fueling today’s across the board rally in stocks—isn’t the extra two cents that Alcoa (AA) reported in second quarter earnings last night. The company reported earnings of 13 cents a share, two cents a share above Wall Street forecasts....Economic growth will be higher than projected, the IMF says, unless, of course, it's not
Janus, the Roman god of beginnings, transitions, and doorways whose two-faced imaged looked both forward and back, would be proud of the IMF (International Monetary Fund) today. The IMF raised its forecast for global growth this year to 4.6% from the previous 4.2%...Jim’s Daily Email Alerts:
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