Government Shutdown, Followed By Default?
The federal government’s fiscal year officially ended at midnight on September 30. The House and Senate have not been able to reconcile their differences in time to pass a spending bill to fund the...
View ArticleTreasury Plays Politics: Says Default Would Be Bad
The U.S. Treasury released a six-page statement saying that the U.S. government defaulting on its debt would be bad.This is probably a good reminder to politicians that this game of brinkmanship can be...
View ArticleNew Fed Chair Means Same Fed Policy
President Obama will nominate Janet Yellen to become the first female head to chair the Federal Reserve (Fed). Currently, Dr. Yellen serves as the vice chair of the Fed. She has a distinguished career...
View ArticleFinding Growth Stocks In A Slow-Growth Environment
The U.S. economy is growing, but just barely. What does that mean for growth investing? I sat down with Senior Portfolio Manager Tom Ognar, CFA, with Wells Capital Management’s Heritage Growth team to...
View ArticleDebt Ceiling: Deadline To Default?
Summary On Thursday, the Treasury estimates that it will have approximately $30 billion in its account with the Federal Reserve (Fed), and it will need to pay bills from its cash on hand. I think the...
View ArticleWhat The Debt Ceiling Deal Means
Summary The agreement to suspend the debt ceiling and fund the federal government will create a bipartisan committee with a target of December 13 for preparing a deficit reduction plan. The deal sets...
View ArticleDebt Deal Done. So What?
I invite you to listen to me and my colleagues Jim Kochan, chief fixed-income strategist, and John Manley, CFA, chief equity strategist, with Wells Fargo Funds Management, LLC, in this edition of the...
View ArticleEmployment Situation: Wait And See?
A disappointing employment situation report for September was released today, delayed from its scheduled October 4 release due to the partial government shutdown. Given that the shutdown ended on...
View ArticleAn Energy Boost and Declining Health
My colleague, John Manley, and I just updated our sector recommendations for energy and health care. Perhaps the title overstates our views a bit. We are simply recommending to put health care stocks...
View ArticleIndustrial Production: Another Irrelevant Statistic?
The economic reports delayed by the government shutdown continue to be released at a steady pace, but investors would probably be better served by not putting too much emphasis on any given set of...
View ArticleFederal Reserve: No Changes Now But Bernanke Swan Song Could Be Surprising
The Federal Open Market Committee (FOMC) kept its policy rate target unchanged at 0% and its asset purchaseprogram unaltered. Considering the partial government shutdown and the debt ceiling fight, it...
View ArticleEmployment Situation: Uglier Than It Looks
Bureau of Labor Statistics (Wikipedia) On the surface, the U.S. economy made better-than-expected job gains in October, a month disrupted by the partial government shutdown. The Federal Open Market...
View ArticleBernanke To Go Out With A Bang?
Federal Reserve Chairman Ben Bernanke spoke at the National Economists Club Annual Dinner on November 19, 2013. He has only a few more public appearances before his term as chairman officially ends,...
View ArticleIran's Nuclear Deal and Oil: Look Out Below?
Negotiators from Iran and the P5+1 (the five permanent members of the U.N. Security Council, made up of the U.S., the U.K., France, Russia, and China, plus Germany) reached an agreement to limit...
View ArticleDon't Fear Aggressive Tapering By The Fed
The Federal Reserve’s Beige Book, a collection of qualitative information from the 12 Federal Reserve Districts, painted a continued boring color for the U.S. economy. Just like previous reports, it...
View ArticleGDP Revisions: What's Good for This Quarter is Bad for the Next
Third-quarter real gross domestic product (GDP) increased 3.6% at an annualized rate, according to the second estimate from the Bureau of Economic Analysis. This is much faster than the preliminary...
View ArticleEmployment Numbers Hit Fed's 7% Target To Begin Tapering: Will It?
The unemployment rate dropped to 7.0% in November from 7.3% in October as total nonfarm payrolls rose by 203,000. These were both much better than expected. Employment increased in transportation and...
View ArticleBudget Deal: A Gimmick That Just Might Work
I view a commitment to reduce spending in 10 years as a bit of gimmickry.
View ArticleRetail Sales And Unemployment Claims May Signal Bunny-Hill Taper
I would not be surprised if next week’s Federal Open Market Committee (FOMC) statement gives more emphasis on trying to juice up the inflation numbers.
View ArticleConsumer Price Index: Low Inflation Shows The Fed Should Try A Different Tool
The Consumer Price Index (CPI) was unchanged in November. Declines in energy prices have been dragging the headline number lower. The Core CPI, which excludes food and energy, was up 0.2% for the...
View ArticleISM Reports Point To A Slowdown, But Not Stopping, Of The Economy
The Institute for Supply Management’s Non-Manufacturing Index dropped from 53.9 to 53.0 in December. Although this is a decline, any reading above 50 indicates an expansion of activity in the service...
View ArticleFed Minutes: Shift From Employment To Inflation
The Federal Open Market Committee (FOMC) minutes were released today from the meeting that ended on December 18. While detailed, not a lot of it was exciting. The biggest point of contention seemed to...
View ArticleEmployment Situation: Still Improving, But Not That Fast
Nonfarm payrolls expanded by a meager 74,000 in December, but the unemployment rate dropped a significant 0.3 percentage points to 6.7%. There were no revisions to October (stayed at +200,000), but...
View ArticleIs This The Beginning Of The Correction Everyone Is Waiting For?
I don’t want to bury the lede, so I’ll start by saying, “I don’t know.” It could be, but I don’t think so. The bad Purchasing Managers’ Index reading out of China seemed to precede a market pullback...
View ArticleIs The Federal Reserve Wearing Blinders?
At Chairman Bernanke’s last Federal Open Market Committee (FOMC) meeting, the FOMC decided to do the entirely predictable—continue to reduce the pace of asset purchases by $10 billion. The FOMC ignored...
View ArticleYear Of The Horse: Why Is The Fed Hamstringing The Emerging Markets?
The Bureau of Economic Analysis released data showing that the U.S. recovery stumbled a bit in December. The data also show how the Federal Reserve may want to rethink its exit strategy from its...
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