Morning Briefing
March 4, 2024 | Daily JAM, Long Term, Morning Briefing |
Way back in 2005, shortly before he became chair of the Federal Reserve, economist Ben Bernanke proposed that the world was seeing a long-term glut of savings. With the world awash in cash as a result of massive numbers of people in the developing world entering the job market, and as the Baby Boom generation (and others) hit its peak earning years, and as relatively low inflation and rising real wages freed up more cash for many consumers, long-term interest rates would stay low and remain low for longer. The thesis looks, in retrospect, to have been massively correct. The global economy did experience a long period of extraordinarily low interest rates, with interest rates turning negative for important chunks of the the world. Now, it looks like the long-term trend has gone into reverse. We’re headed into a period of cash scarcity.
March 1, 2024 | Daily JAM, Mid Term, Morning Briefing |
Access to auto credit declined in January as credit tightened across all channels and across most lender types compared to December, according to the Dealertrack Credit Availability Index. Investors who pay so much attention to interest rates to predict the trend in consumer spending need to spend more time on the other parts of the current credit crunch, the ability of loans. Consumers who can’t borrow can’t spend no matter how many times the Federal Reserve cuts interest rates.
February 29, 2024 | Daily JAM, Mid Term, Morning Briefing |
The headline, all-items Personal Consumption Expenditures price index, the Federal Reserve’s preferred inflation measure, climbed at a 2.4% year over year rate in January. That was in line with what economists had forecast and down from the 2.6% annual rate in December. The core PCE, that is after stripping out more volatile food and fuel prices, climbed at a 2.8% year over year rate. In December the annual rate of core inflation had been 2.9%. But that was the end of the good news in today’s PCE inflation report.
February 26, 2024 | Daily JAM, Morning Briefing, Short Term |
On Thursday the financial markets get a new monthly PCE inflation report. The PCE, Personal Consumption Expenditures index, is the Federal Reserve’s favorite inflation measure. And Thursday’s report on January inflation could be bad news for the financial markets,
February 23, 2024 | Daily JAM, Morning Briefing |
Economics is supposed to be the gloomy science. So where’s the gloom? Stock markets are supposed to climb a Wall of Worry. So where’s the worry? In its latest survey (February 16-21) of economists (72 of them), Bloomberg found them positively giddy–for economists.
February 20, 2024 | Daily JAM, Jubak Picks, Long Term, Morning Briefing |
t should be a familiar story in this priced-to-perfection market: Company beats big in current quarter but lowers guidance and stock takes a dive. Latest victim? Palo Alto Networks (PANW). The stock is down 14.09% at 4:30 New York time today. And with Nvidia scheduled to report tomorrow after the close, you can bet the market will be on edge tomorrow.
February 17, 2024 | Daily JAM, Morning Briefing, OGXI, Top 50 Stocks |
I expect the market reaction to Nvidia’s (NVDA) earnings report, to be released after the close on Wednesday, February 21, to tell investors a lot about the short-term direction of this stock market. We’re likely to learn more, however, from the reaction to an Nvidia beat rather than from an earnings miss.
February 16, 2024 | Daily JAM, Morning Briefing, Short Term |
The Labor Department reported Friday that its producer price index—which tracks inflation before it reaches consumers—rose 0.3% from December to January. The index had dropped -0.1% in December. Measured year over year, producer prices rose by 0.9% in January. But the month to month increase in producer prices and at a higher month to month rate is the latest sign that getting inflation the “last mile” down to the Federal Reserve’s 2% target rate is going to be harder and take longer than expected.
February 15, 2024 | Daily JAM, Morning Briefing, Short Term |
Remember all that fear talk after CPI headline inflation came in at a 3.1% annual rate in January versus the projected 2.9%? Well, that lasted all of a day.
February 13, 2024 | Daily JAM, Morning Briefing, Short Term |
Headline, all-items Consumer Price Index (CPI) inflation fell again in January, but not by as much as economists had projected before this morning’s report from the Bureau of Labor Statistics. In January prices rose at 3.1% year-over-year. That’s a slower increase than the 3.4% annual rate notched in December. But economist had projected that inflation would dip to a 2.9% annual rate. And stocks dropped on the disappointment.
February 12, 2024 | Daily JAM, KRE, Morning Briefing |
Nearly 20% of outstanding debt on US commercial and multifamily real estate-— $929 billion–will mature this year, requiring refinancing or property sales, Bloomberg reported today. The volume of loans coming due has swelled 40% from an earlier estimate by the Mortgage Bankers Association of $659 billion, a surge attributed to loan extensions and other delays rather than new transactions. About $4.7 trillion of debt from all sources is backed by U.S. commercial real estate. An estimated $85.8 billion of debt on commercial property was considered distressed at the end of 2023, MSCI Real Assets reported, citing an additional $234.6 billion of potential distress.
February 11, 2024 | Daily JAM, Morning Briefing |
I expect another downward move for inflation when the January Consumer Price Index (CPI) is reported on Tuesday. Economists surveyed by Bloomberg expect that the core consumer price index, which excludes move volatile food and fuel prices, will show a year over year rate of increase of 3.7% in January. That would be the slowest year-over-year increase since April 2021.
