Benjamas Deekam/iStock via Getty Images By Jeffrey Schulze, CFA, Head of Economic and Market Strategy, ClearBridge Investments Jeff Schulze, Head of Economic and Market Strategy at ClearBridge Investments, discusses the updated ClearBridge Recession Risk Dashboard, which has seen some progress underneath the surface despite not having any indicator changes. And, he shares his views on…
NanoStockk/iStock via Getty Images We are going to cover, in detail, what the differences are between monetary policy and fiscal policy – in practical terms – and what this means for investors in 2024 and beyond. Then to pay back that investment of mental time and energy, we will discuss the Net Liquidity model and…
Peter Zelei Images/Moment via Getty Images By Jeffrey Schulze, CFA, Head of Economic and Market Strategy, ClearBridge Investments The latest January release of the ClearBridge Recession Risk Dashboard shows another indicator move from red to yellow. Jeff Schulze of ClearBridge Investments shares his insights on what this could mean for the recession outlook in the…
spooh Co-authored with “Hidden Opportunities.” Legendary bond investor Bill Gross created the first investable market for fixed income accessible to all investors. In 1971, he co-founded and led one of the largest and most successful investment firms – PIMCO – in a vibrant career spanning 40 years. His strategy and techniques over time made fortunes…
DNY59 IAF Overview The abrdn Australia Equity Fund Inc (NYSE:IAF) is a closed end fund that invests in Australian companies listed on the Australian Stock Exchange. Its primary aim is to achieve long-term capital appreciation. Secondary to that is the objective to deliver regular income. This is expected to be derived primarily from the underlying…
DNY59 Co-produced by Austin Rogers Dividend investors have been dealt a pretty bad hand in recent years. Numerous factors are weighing on various dividend stocks’ performance. Steadily falling oil and gas prices have pushed down energy stocks (XLE), including midstream pipeline companies (MLPX). Slowing consumer spending on most categories is making growth harder to achieve…
MCCAIG The only thing that was genuinely surprising in yesterday’s fourth-quarter report on US economic activity was the strength of the increase. The positive directional bias, by contrast, has been relatively clear for weeks, if not longer. Assuming, of course, that you were analyzing a broad array of indicators and avoiding the rookie mistakes of…
Dilok Klaisataporn Both the Fed and most Fed watchers (especially those in the financial press) chronically misunderstand the relationship between economic growth and inflation. Strong growth doesn’t cause inflation, and reducing inflation doesn’t require a recession. Inflation is the result of an imbalance in the supply and the demand for money. Bringing down inflation requires…
Andrzej Rostek/iStock via Getty Images The race against recession Until the December FOMC meeting, the Fed was signaling that it needed to induce a recession to bring down inflation – that was the “higher for longer” policy. The Fed was willing to hold interest rates at a restrictive level until the labor market weakened, and…
AndreyPopov/iStock via Getty Images In the most recent BLS employment report, the percentage of full-time jobs relative to the population dropped sharply. The robust headline number of 216,000 led most media commentators to suggest a “soft landing” is at hand. However, the decline in full-time employment suggests recession risks are higher than thought. To understand…
shih-wei By Jeffrey Schulze, CFA, Head of Economic and Market Strategy, ClearBridge Investments As 2024 kicks off, we sit down with ClearBridge Investment’s Jeff Schulze for an update on the Recession Risk Dashboard that has recently seen some indicator moves from red to yellow and learn whether recent US economic and labor data have impacted…
bluebay2014 The ProShares UltraShort QQQ ETF (NYSEARCA:QID) has been a horrible investment over the last five years, the antithesis of owning Big Tech names through the Invesco QQQ ETF (QQQ). This product is the inverse design of holding the NASDAQ 100 stocks, basically shorting them with 2x leverage. How bad a ride for buy-and-hold investors…
marekuliasz Based on the behavior of various proven leading economic indicators, we have been warning about a major US recession coming, as we did here. Three of the best leading economic indicators — all of which are being ignored by the Fed and most investors — are the money supply, the yield curve and The…
mokee81 KKR & Co. (NYSE:KKR) has just experienced an amazing stock price move to the upside in late 2023. However, the big picture backdrop of a slowing economy is a warning to take profits, sell shares short, or just plain avoid this name during 2024. Why? The KKR quote has been roughly cut in half…
Eric Thayer Costco (NASDAQ:COST) experienced an exceptionally strong q1’24 in revenue across all segments and membership growth. With margins widening towards FY21 levels, the big question is whether Costco will be able to maintain this level of growth and profitability. With an anticipated 33 new warehouses opening in 2024, strong 90.50% global renewal rates, and…
2024 could be a slower year for the business landscape in the US economy, however, many economists are positive that the US recession could be thwarted with a soft landing. Bulls made a strong comeback this year in 2023, and as the year ends, the Fed has given major signals of interest rate cuts in…
Bet_Noire I have wavered between a negative to neutral view of the U.S. stock market’s immediate direction during 2023, happy to hold a hedged portfolio and lots of cash earning 5%. Mind you I have refrained from being net short the market. I do own large gold/silver bullion holdings, a few bonds, and some exposure…
NicoElNino Fed Policy: Long and Variable Lags In early June, we examined the performance of stocks relative to bonds to see what we could learn about the soft versus hard landing question. At that time, the stock/bond ratio was siding with the soft-landing scenario, which thus far has been the case. Since we know Fed…
ImagePixel Introduction I’ve been writing about earnings “bust” bear market and recession risk for about two years now on Seeking Alpha. Over that time, the earnings bust occurred for most businesses that had experienced a “boom” from the pandemic, stimulus money, and supply chain issues that followed, but the economy hasn’t gone into recession, yet….
Tippapatt By Sergiy Lesyk & Robin Marshall The inflation shock of 2022-23 highlights the issue of performance of different asset classes, including equity factors, in different inflation regimes. Since the first Tips issuance in January 1997, there is a rich time series for short and longer run inflation expectations, using the breakevens between nominal and…
LilliDay The probability the U.S. economy will experience an official period of recession sometime in the next twelve months continued to recede during the past six weeks. That probability now stands at 67%, which applies to the period from 11 December 2023 through 11 December 2024, which is to say there’s about a two out…
Feverpitched Co-authored by Treading Softly, I can clearly remember the day or the time in my life when I transitioned from someone who was involved in the latest fad to someone who thought something was cool long before everybody else discovered it. Often, as we grow older, we start crossing over from being the one…
asbe/iStock via Getty Images A review of recent US inflation data, the Recession Risk Dashboard, and thoughts on if we’ve reached the peak in the fed funds rate. Join us for this conversation with Jeff Schulze of ClearBridge Investments. Transcript Jeff Schulze: Thank you for having me. Host: So, Jeff, let’s start our conversation with…
DNY59 Thesis Summary In 2022, everyone was expecting a recession in 2023. Now, we are one month away from ending the year, and there is no recession in sight. In fact, we have seen plenty of evidence to suggest quite the opposite. The US economy is doing very well for now. With that said, things…
cemagraphics The “no landing” and/or “soft landing” camp are not going to like this article. With that said, I’m just trying to call it like I see it regardless of who that may offend. Francois Trahan recently posted an interesting chart comparing the NAHB Index to the Unemployment Rate. The thesis was/is that if you…
primeimages/iStock via Getty Images In just three weeks, the consensus has gone from questioning the validity of the bull market to putting its first correction behind us to seeing the S&P 500 climb within 6% of reaching a new all-time high. As the major market averages pushed higher last week, the most encouraging development was…
Dilok Klaisataporn Aside from covering individual companies that qualify as long-term investments, I also look at the U.S. stock market (and economy) from time to time. And although the article was titled U.S. Stock Market: Staring Into The Abyss? I wrote: In my opinion it is possible to see an increase to 4,300 in the…
CribbVisuals/iStock Unreleased via Getty Images On our last work on Bank of America (NYSE:BAC) we focused on the fact that margins were past their peak. These margins were of course the net interest margins and while we did like the value, we felt a buy rating would just not make sense. Whether or BAC’s margins…
DNY59 Ares Capital (NASDAQ:ARCC) is a leading business development company or BDC. Its market cap of $10.5B gives it a significant scale and firepower advantage against its smaller peers. The company focuses on “high-quality borrowers” in the middle-market space. Its strategies encompass a myriad of debt and equity structures, providing investors with a blend of…
The below is an excerpt from a recent edition of Bitcoin Magazine Pro, Bitcoin Magazine’s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now. Topics this week: Paul Tudor Jones 3 Trades Bitcoin, Ethereum and BNB Last week, I wrote…
da-kuk The case for China entering a ‘balance sheet recession’ (a la Japan) is stronger than ever, following a slew of poor economic data in recent months and a faltering property market. Perhaps the best rebuttal against a prolonged downturn is China’s money supply growth, which continues to run in the double digits (+10.3% YoY…
izusek/E+ via Getty Images Co-authored by Treading Softly A common mistake that people make is assuming that this is the first time something has ever occurred. We often hear people say that “this has never happened before” or that there are no historical analogs for what is occurring. Unfortunately, a massive part of the human…
KanawatTH Co-produced by Austin Rogers. There is always a lot of noise in the financial media about the state of the economy, but most of it is, to quote Shakespeare, “sound and fury signifying nothing.” So, let’s look at some data points to try to gain clarity on the state of the economy and specifically…
Andrii Yalanskyi While long-term interest rates stabilized, the major market averages all edged lower, as investors brace for this morning’s jobs report, which pundits say will help determine whether the Fed holds steady or raises rates again at its November meeting. Weekly unemployment claims remain stubbornly low with just 207,000 filing in the latest week,…
The below is an excerpt from a recent edition of Bitcoin Magazine Pro, Bitcoin Magazine’s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now. If Recession, Then Not Inflation Last week, I wrote about the Fed Funds Futures curve, concluding…
Feverpitched A recession is when your neighbor loses his job. A depression is when you lose yours.” – Ronald Reagan The problem with recessions is they are difficult to forecast, except after the fact. This is why the National Bureau of Economic Research or NBER usually doesn’t officially tag when a recession started until 6-12…
courtneyk Co-authored by Treading Softly Have you ever “hedged your bets?” It’s a common turn of phrase that means to take actions that account for multiple possible outcomes. Often “hedging” involves betting the opposite of what you think will happen. For example, you might pay for extra insurance or for an extra warranty for an…
Désirée Russeau/iStock via Getty Images Last week the Federal Reserve came out with its new forecast for the U.S. economy. The results turned out to be very close to what the Fed’s statistical goals are: 2.0 percent inflation and 4.0 percent unemployment. The picture for economic growth was not so strong, with real GDP growing…
ljubaphoto The next recession will not be a disaster. I expect a recession to begin early in 2024, or possibly late this year, and that frightens many people. But recessions do not hurt most people, though they certainly can be very harmful to some. Employment in Recessions Unemployment rises during recessions, but not as much…
DjordjeDjurdjevic Last October, I argued that shares of OneMain Financial (NYSE:OMF) could reach $42-45 if recession fears moderated, though investors needed to be aware of its significant exposure to an economic downturn. Recession fears have gone down, with the Federal Reserve’s staff no longer predicting one this year. Accordingly, OMF shares are in fact trading…
niphon/iStock via Getty Images The Conference Board just released the latest data on the leading economic indicators for the US economy and they still point to a recession. This aligns with our view that the stock market is in the midst of forming a large, four year trading range that will oscillate between 3,500 and…
sefa ozel It’s been clear for some time that US recession risk has been sliding in recent months, but this week’s updates of a widely followed GDP nowcast published by the Atlanta Fed has been revised up – a lot – for the third quarter. According to this model, the US economy isn’t just rolling…
The Dutch economy, once a beacon of robust growth and stability, has hit a rough patch as it enters a recession following two consecutive quarters of contraction. The preliminary estimate published by Statistics Netherlands revealed a 0.3% decline in the second quarter of the year, following a 0.4% contraction in the first quarter. The Dutch economy’s…
Analysts and stakeholders expect gold prices to rise as the year runs out because of macroeconomic factors and recession risks. There is a general bullishness around gold prices as the yellow metal is on course to an all-time high in 2024. Analysts believe that the new record is likely because of economic uncertainty which indicates…
While inflation in Eurozone shows signs of slowing down, it still remains much higher than the targeted 2%. Economists also pointed out other cracks in the Eurozone economy. For the month of July 2023, the Eurozone has delivered a robust set of GDP numbers beyond market expectations. The new growth numbers show economic activity picking…