Posted on August 25, 2014 by Sam Wardwell
As the economy and labor market improve, quantitative easing (QE) is wound down and the first rate hike draws nearer, the language of the Fed evolves accordingly. Both the minutes of the June FOMC meeting and the remarks of Fed Chair Janet Yellen at Jackson Hole were incrementally less dovish than earlier language. The pace of these changes suggests that the Fed is comfortable “the ball is in the fairway”…the likelihood of a surprise policy shift is low. Continue reading
Filed under: Equity Market Insights, Fixed Income Market Insights, Inflation, Macroeconomics, Sam Wardwell, U.S. Dollar, United States | Tagged: Bonds, Capital Markets, Fed policy, Fed tapering, inflation, Interest rates, QE Tapering, the Fed, Unemployment | Leave a comment »
Posted on August 14, 2014 by Giordano Lombardo
Pioneer’s Head of Global Asset Allocation Research, Monica Defend, along with Europe and EMEA Global Asset Allocation Research Senior Economist, Andrea Brasili, recently released an update on the UK economy. The update was based on the 2Q14 preliminary results for gross domestic product (GDP), which came in higher than expected. They expect growth above 3%, higher inflation in 2015, and a gradual shift in monetary policy towards higher rates. Highlights from their report are below. To read the full report, click here. Continue reading
Filed under: Europe, GDP, Giordano Lombardo, Inflation, Macroeconomics | Tagged: Europe, GDP, inflation, monetary policy, Unemployment | Leave a comment »
Posted on July 14, 2014 by Sam Wardwell
Observations on the Capital Markets – Week Ended July 11, 2014
It was a tough week for Europe over all last week – industrial production declined in Germany, Italy, France, and the UK, with the details broadly downbeat. Trade (import and export) data, especially from Germany, was disappointing as well. But the big story in Europe last week came from Portugal, where Banco Espírito Santo (BES), a leading Portuguese bank, suffered a share price crash and trading was suspended after reports of financial irregularities.
Filed under: Equity Market Insights, Europe, Fixed Income Market Insights, Inflation, Macroeconomics, Sam Wardwell | Tagged: Banco Espirito, Capital Markets, consumer spending, labor market, Sam Wardwell, the Fed, Unemployment | Leave a comment »
Posted on February 10, 2014 by Sam Wardwell
Observations on the Capital Markets – Week Ended February 7, 2014
The jobs reports were better underneath than on the surface
The data: Initial unemployment claims for the month were 331K. The “establishment survey” showed headline employment growth of 113k, below consensus expectations of 189k. The details were less disappointing, however.Prior months were revised up by 34k. Wages continued to rise slowly. The household survey — the basis for calculating the unemployment rate — showed employment rising by 616k. But because the labor participation rate rose 0.2 to 63.0%, the estimated workforce rose by 499k and the unemployment rate fell only to 6.6%.
The upshot: The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) fell by 514k (so, by implication, the number of full-time workers rose by 1.1 million!). Finally, we got the periodic revisions to the past year’s data, the net effect of which was to revise 2013 job growth up from 2.19mm to 2.32mm.
Comment: There’s often a pretty big divergence between the “household” and “establishment” surveys. It’s not unusual to have discrepancies . . . they tend to vary month-to-month but converge over time. Continue reading
Filed under: Contributors, Equity Market Insights, Europe, Fixed Income Market Insights, GDP, Macroeconomics, Mutual Fund Industry, Political, Sam Wardwell, U.S. Dollar, United States | Tagged: CBO, employment, Obamacare, Unemployment | Leave a comment »
Posted on January 6, 2014 by Sam Wardwell
Observations on the Capital Markets – Week Ended January 3, 2014
Extended unemployment benefits stopped for 1.3 million people at year-end. This doesn’t change their employment status . . . they just stop getting unemployment compensation. Extended benefits (of up to 99 weeks) was part of the recession-fighting fiscal stimulus package. A question was: did this create a dis-incentive to find a job (aka “funemployment”). Continue reading
Filed under: Equity Market Insights, Europe, Fixed Income Market Insights, GDP, Macroeconomics, Political, Sam Wardwell, United States | Tagged: benefits extension, funemployment, Unemployment | Leave a comment »
Posted on December 10, 2013 by Sam Wardwell
To taper or not to taper—that is the question the Fed is asking itself. What’s moving the market is (it appears) the odds of Fed action. For the first half of last week, “good news was bad news” as stock and bond markets apparently interpreted better economic data as suggesting an earlier QE (Quantitative Easing) Taper. On Friday, the market apparently decided the jobs report was good enough to further reduce downside risks to the economy but not strong enough to spur the Fed to action. Continue reading
Filed under: Equity Market Insights, GDP, Macroeconomics, Political, Sam Wardwell | Tagged: employment, housing, taper, Unemployment | Leave a comment »