December 11, 2024 | Daily JAM, Morning Briefing |
Inflation remains stubborn. The Consumer Price Index (CPI) rose at a 2.7% annual rate in November, according to Labor Department data released Wednesday. That was hotter than a 2.6% rise in October. But that matched economists forecasts. It was also above September’s 2.4% annual rate. On a monthly basis, inflation increased 0.3% from October to November, the biggest gain since April. Prices for housing, energy, and particularly food all rose.
CPI core inflation, prices excluding volatile food and energy categories, rose another 0.3% for the fourth straight month. The are rate was up 3.3% for the year. For the past six months, core inflation has been stuck at an elevated level above the Fed’s target of 2%.
December 8, 2024 | Daily JAM, Morning Briefing |
All eyes will be on the Consumer Price Index inflation report for November due out on the morning of Wednesday, December 11. It’s the last big inflation data dump before the Federal Reserve meets on December 18.
December 6, 2024 | Daily JAM, Morning Briefing |
The U.S. economy added 227,000 jobs last month, the Labor Department reported Friday morning, December 6. In addition, revisions added 56,000 jobs to the totals for October and September. Which adds up to a strong recovery from the shocking low 12,000 new jobs initially reported for October. Initial analysis that the almost non-existant growth for October was due to hurricanes and strikes now looks correct. At the same time, the unemployment rate, which is calculated in a survey separate from that which produces the jobs total, ticked up to 4.2% from 4.1%. The jobs total and the unemployment rate were broadly expected by economists. The complete picture is of an economy showing a continued modest expansion. In my opinion, that’s enough to lead to a 25 basis point cut at its December 18 meeting in the Federal Reserve’s benchmark short-term interest rate from the current range of 4.50% to 4.75%. The CME FedWatch took today put the odds od a 25 basis point cut at the December meeting at 85.1%. That’s up from 66% odds a week ago
December 1, 2024 | Daily JAM |
I the Big Event to be Friday morning’s report of the November jobs numbers. The Dow Jones Industrial Average rose more than 2% last week. The Nasdaq Composite and the Standard & Poor’s 500 rose more than 1%. Both the S&P 500 and Dow Jones ended November at all-time highs. A ”good” jobs report, which is likely, will keep the records coming for at least another week–until the usual Fed meeting jitters set in on the run up to the central bank’s meeting on December 18.
November 29, 2024 | Daily JAM, Morning Briefing |
At 8:30 a.m. on Friday, December 6, investors will see the U.S. jobs report for November. Economists expect that the economy added 200,000 jobs in the month and that for the unemployment rate will hold steady at 4.2%.
November 28, 2024 | Daily JAM, Morning Briefing |
Yesterday, Wednesday, November 27, the report from the Bureau of Economic Analysis showed that the Personal Consumption Expenditures index, the Federal Reserve’s preferred inflation measure, had continued the stall that began in May.
November 21, 2024 | Daily JAM, Morning Briefing |
Three days after the U.S. election, Redfin, the technology-driven real estate brokerage that does business in 100 markets, raised its projection for the average mortgage rate in 2025 to 6.8%. That’s roughly where the current average 30-year fixed mortgage rate stands now. Other real estate analysts, including Moody Analytics and Capital Economics, expect rates near 7% next year. This is bad news for two reasons.
November 19, 2024 | Daily JAM, Dividend Income, GLD, GOLD, Mid Term, NEM, Special Reports, VZ |
If you’re an investor looking for income, you’re facing what I’d call a Yield Drought. And this is no temporary dry spell. Things on the income investing front look they’ll get worse before they get better. Unless a financial crisis intervenes in 2025 to make everything else much worse and the yield story much better. Because, you see, there are two parts to the current Yield Drought.
November 15, 2024 | Daily JAM, Videos |
Today’s video is Fed One and Done in December? On November 13, the CPI inflation numbers showed inflation ticking up slightly, but the market still believes the Fed will cut rates again in December. On November 13, the CME Fedwatch tool had it at 83% odds we’ll get a cut and I think it’s almost certain. However, when the Dot Plot forecast of GDP, inflation, and interest rates is released in December, I think we’ll see much more uncertainty for the future and likely a planned pause. The three major factors poised to affect the economy are a substantial tax cut, high tariffs and the possibility of mass deportations promised by the president-elect. While two of those items may cancel each other out–with tax cuts being massively stimulative and tariffs cutting into growth by 1.5-2 percentage points while raising costs for consumers, the question of deportations remains. Mass deportations could result in a huge labor shortage and disruptions to supply chains, leading to higher prices. The economy will be under a lot of inflationary pressure from these potential policies and it’s likely the Fed will announce a pause until they see how this all shakes out.
November 14, 2024 | Daily JAM, Morning Briefing |
I think we can expect another huge tax cut package to extend the tax cuts from 2017, and a set of tariffs on China, the European Union, and other trading partners with duties of somewhere between 20% and 200%, and an effort to deport 11 million illegal immigrants (and maybe a few legal immigrants too) And in the face of that policy mix I don’t think there’s any way for the Federal Reserve to reach its goals of getting inflation down to 2%, of lowering interest rates from levels left from the pandemic emergency, and of keeping the economy strong enough to prevent unemployment from climbing. Can’t be done. The Fed doesn’t even begin to have the tools to tackle all those challenges at once. And there’s a non-zero and statistically significant chance of a really serious mistake that would take a big bite out of the economy and the prices of financial assets. Can I tell you why I believe this?
November 13, 2024 | Daily JAM, Morning Briefing |
Inflation ticked up slightly on an annual basis in October, the latest evidence that further reductions in inflation are getting hard to achieve. The Consumer Price Index climbed 2.6% from a year earlier, up from September’s 2.4% annual rate, the Bureau of Labor Statistics reported today. Core inflation, which strips out more volatile food and energy prices, held steady at 3.3% annual rate.
November 11, 2024 | Daily JAM, Short Term |
Look out for more volatility in the bond market. BlackRock, JPMorgan Chase. and TCW Group have all warned that the bumpy ride is likely far from over. But also expect that the big overall trend for 2024 of rising bond prices and falling yields on hopes for aggressive interest rate cuts from the Federal Reserve is done.
