Tag "gdp growth"

Citi Surprise Index Negative For 16 Months And Counting

An update on Eliminating Surprises with the Citi Surprise Index In his 2016 State of the Union Address, President Barack Obama accused those claiming the American economy is in decline of “peddling fiction”. Few economic prognosticators have actually stated that the U.S. economy is in decline. However, many including ourselves…

GDP Trends And Omens: A Warning In Today’s Data

While there is no doubt that patience is a virtue for investors, exercising prudence is equally important. In our prior article “Limiting Losses”, we examined how taking prudent measures, at certain times, can enhance your ability to create wealth over the long-term for your clients. Despite basic math and historical…

Weak Q1 GDP Growth May Obscure Underlying Economic Strength

Key Takeaway: First quarter GDP growth could fail to meet forecasts, but Q1 weakness in GDP is becoming a recurring theme. Other measures of the economy point to improving conditions or persistent strength. While our recent experience has been over-optimistic forecasts, such has not always been the case. The initial…

U.S. Economic Update: Are We Due For A Recession?

Key Takeaway: Federal Reserve studies suggest expansions are lasting longer and do not die just from old age. No one knows what the future will hold, but current evidence suggests recession risk remains minimal and even some of the weaker areas of the United States economy are seeing signs of…

Equity Valuations Stretched: Do Not Say You Were Not Warned

“What The Fed did, and I was part of it, was front-loaded an enormous market rally in order to create a wealth effect… and an uncomfortable digestive period is likely now.” – Former Dallas Federal Reserve Governor Richard Fisher – January 5, 2016.   Do Not Say You Were Not…

Is Slowing Economic Growth Catching Up With Stocks?

Looking Back Most investors will be happy to have 2015 in the rear-view mirror. The S&P 500 Index eked out a 1.4% return including dividends. Excluding dividends it was down -0.73%. A total return of 1.40% for the S&P 500 is the worst annual return since 2008. Overall, that sounds…

The Fed And Its Self Defeating Monetary Policy

“It’s self-defeating to use the wrong monetary policy.” -Ben Bernanke What is productivity? The Federal Reserve’s flawed growth benchmark Excessive monetary policy is crushing productivity The prescription for sustainable, durable growth – productivity “Because it is unclear exactly why productivity growth has slowed recently, it is difficult to be confident…

Strong Dollar Keeps Pressure On U.S. Exports

U.S. multinationals can breathe a little easier. Maybe. U.S. exports are under pressure… and it has been that way for a while now. Look no further than a strong Dollar, but more on that later. Nominally, U.S. exports of goods and services peaked at a seasonally adjusted annual rate of…

Federal Debt Likely To Keep Fed Tightening Cycle Shallow

Last week when the Federal Open Market Committee (FOMC) met, market participants were divided as to whether or not the Federal Reserve would raise interest rates. Most economists expected a hike, as did the short end of the yield curve; two-year Treasury yields had shot up to 0.82 percent into…

Why The Fed Won’t (Shouldn’t) Raise Rates In 2015

If the Federal Reserve raises rates this year, it will be one of the worst policy mistakes made be any Central Banker (in my opinion). The Fed hasn’t raised rates in the face of a slowing economy despite their rhetoric to the contrary. Remember, the Fed MUST talk up the…