Mon - Fri 8:00am-4:45pm (216) 771-3450
Mon - Fri 8:00am-4:45pm (216) 771-3450

Tag

Article

More market-based signals are pointing towards a slowdown in growth and inflation.

The probability of an economic slowdown is rising, which leads to lower interest rates and a deceleration in inflation. Interest rates and inflation breakevens have been declining since the recent rate hikes. The inversion in the Eurodollar futures curve has deepened over the last few weeks. Commodities have started to decelerate from their prior peaks...
Read More

Discretionary spending is slowing while inventories are building and costs are increasing, causing margins to decline, which could lead to increased layoffs

Throughout the year, we have been noting that consumer incomes were likely going to slow as a result of the fiscal support from 2021 not being repeated in 2022, and more recently, price increases in areas like gasoline and food reducing purchasing power for discretionary items.  Last week, the retail team at research firm Hedgeye...
Read More

Global Business and Consumer Sentiment Data Update

Business sentiment weakened across the board in the most recent round of releases. The S&P Global Flash Purchasing Managers’ Index (PMI) was flat to down in the United States, Eurozone, France, Germany, United Kingdom, and Australia. The June survey data reflects worsening conditions versus the prior month. Source: Macrobond. In the U.S., the composite index...
Read More

More Income in Fixed Income

The bond market in 2022 has been turbulent and the negative total returns have been some of the worst experienced by fixed income investors.  As a result, a substantial amount of pessimism has been created for the asset class so far this year.  However, a reason for optimism has also been created for fixed income...
Read More

The shelter component of the Consumer Price Index tends to track home prices, and housing related data suggest home prices are facing several headwinds.

The Consumer Price Index (CPI) made a new cycle high in May, increasing at 8.6%.  Shelter is the largest overall category in the CPI (32%) and Owners’ Equivalent Rent (OER) is the largest component of the shelter category (24%).  OER is an attempt to capture homeowners’ housing consumption by calculating what they think they could...
Read More

Consumer spending plays a large role in the U.S. economy and current data suggests the health of the consumer is deteriorating, which is a negative headwind for the overall economy.

Consumer spending has been equal to 65-70% of U.S. GDP since the mid-1990s. Source: Macrobond. This means that the health of the consumer, and their ability to continue spending, has a large impact on the growth of the overall economy.  Many consumer related indicators are heading in a negative direction. Consumer incomes on a real...
Read More

Labor market data is starting to show signs of weakening which often occurs towards the end of an economic cycle when the corporate sector has to readjust their cost structure to reflect the new economic environment.

Labor market data is often one of the last economic indicators to decline as companies often wait to determine if the environment requires that they reduce their costs.  This often involves reducing the number of people they employ.  There are early indicators of this forming, as well as a few other indicators, that we can...
Read More

Over the past two decades, as companies continue to seek talent and cities look to grow, they have partnered with universities in their local area to form innovation hubs creating unique opportunities for R&D, specialized talent, and economic growth.

Given the growth of Silicon Valley since the turn of the 21st century, other cities have sought to replicate their model to produce lasting research, create local jobs, and grow their economic base.  Some of the early adopters have been the Cortex district in St. Louis, MO with Washington University, St. Louis University, and University...
Read More

The comparison data and the market-based indicators suggest that the rate of change for inflation in the U.S. should stop accelerating in the coming months and start to decelerate into the end of the year.

Inflation has become a major focus, impacting economic activity, consumer data, and market prices.  While it is not possible to predict the exact level of future price growth, we can examine prior and current inflation data to determine the likelihood that the current growth rate is sustainable.  We can also look at market-based indicators to...
Read More

Consumer spending has moved from a driver of economic growth in 2021 to a negative contributor in 2022, which has negative implications for consumer companies and overall economic growth.

Consumer spending accelerated at a record pace in 2021, aided by a sizeable increase in fiscal support (direct payments, enhanced and expanded unemployment, and deferred consumer debt payments).  That support has gone away in 2022, the acceleration in 2021 activity is now a headwind to 2022 growth comparisons, and the acceleration in prices is having...
Read More
1 2 3 13