Article Category: Inflation

Drilling Down on Inflation

If you could predict where inflation would be during 2018, you'd have a good idea of where long-term interest rates will head, how monetary policy is likely to develop, and therefore how the equity and bond markets are likely to perform. With that information, you could make an informed decision about asset allocation within your portfolio.

In a recently released article by the Federal Reserve Bank of San Francisco, economists Tim Mahedy and Adam Shapiro took a stab at analyzing the underlying cause of the persistently low inflation we've seen since the end of the financial crisis.

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Posted in: Bonds Economy Federal Reserve Inflation Interest Rates

The Uptrend Continues

It's been a very bullish year, and yet major averages continue to attack their high-water marks time and time again. For many, this instills a sense of unease ... a feeling that things are too good right now, and won't last.

If you find yourself in this camp, take solace in the fact that ultimately you will be correct, it just might take longer than you expect. After all, people have been making this case for a number of years, and anyone who acted on that advice has missed out on a tremendous surge in asset prices.

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Posted in: Corrections Dow Theory Inflation Market Breadth Primary Trend

Three Concerns Plaguing Investors

Right now there appear to be three main sources of concern for bulls: high-yield bonds, the Transports, and the slope of the yield curve. Let's examine each of these individually to see if they warrant a change in our longer term outlook.

First up is junk bonds. Last week was the first time in eight weeks that major indexes posted losses, and that weakness may have been presaged by declines in junk bonds, as seen below.

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Posted in: Bonds Dow Theory Federal Reserve Inflation Interest Rates

Global Growth Cues Abound

Sometimes stock market rallies can be so powerful that you just have to grab ahold of something sturdy and hang on. Every once in a while, the upward surge can be so strong that it feels as though it's fake - too much wealth being created in too short a time, inevitably destined to evaporate.

The last 12 months have felt that way. With the major averages up anywhere from 19-26%, many investors are logging in to see account balances that have never been this high.

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Posted in: Debt Economy Inflation

Navigating Aberrant Data

We've seen some really great economic data lately, and we've seen some lousy data as well. Some of it suggests that we're in the middle of an incredibly strong expansion, while other data shows a sharp decline in key areas such as employment and corporate profits.

As you can probably guess, much of this aberrant data comes as a result of hurricanes Irma and Harvey, which wreaked havoc across the Southeast. Today we're going to examine some of this data in an attempt to gauge whether the U.S. economy remains on stable footing.

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Posted in: Dollar Earnings Economy Inflation Volatility

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