Common Cents Archive

Common Cents & Higher Interest Rates on November 8, 2019

November 8, 2019, by John Norris

In school, you learn there is an inverse relationship between interest rates and bond prices. When rates go higher, bonds go lower and vice versa. It is a pretty easy concept to understand: assuming all other things being equal, would you pay the same amount for a security paying 3% as you would one paying 5%? Unless you are unique, probably not. Interest rates are nothing more than the cost of money in a financial...

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Episode 63 of Trading Perspectives Podcast

November 4, 2019, by Sara McPherson

The US Labor Market Last week, the Bureau of Labor Statistics announced that the US economy created 128,000 new payroll jobs.  So far, the participation rate is the highest it’s been since 2013. However, people are still talking about a recession.  Should we be worried about a recession in 2020?  If so, what can we expect compared to 2008? What are the differences in the economy in 2008 and now?       Listen here:  http://tradingperspectives.libsyn.com/...

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Common Cents & The End of the Week (Finally) – November 1, 2019

November 1, 2019, by John Norris

This past Monday, I told some co-workers this was going to be one of the biggest weeks of the year, if not the biggest. There was an FOMC (Federal Open Market Committee) meeting on Wednesday to determine the future of monetary policy in the United States. Also, on that day, the Bureau of Economic Analysis (BEA) announced its first stab at the 3Q GDP (Gross Domestic Product) calculation. Today, Friday, the Bureau of Labor Statistics...

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The Economy Created Jobs in October 2019!

, by John Norris

This morning, the Bureau of Labor Statistics (BLS) released The Employment Situation – October 2019. It showed the US economy created 128K net new ‘payroll’ jobs and the Unemployment Rate increased slightly to 3.6% from 3.5%. This was due to an increase in the ‘civilian labor force’ of 325K relatively to the creation of only 241K jobs reported at the household level. The difference between the two numbers is the former comes from a survey...

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Fed Rate Cut on October 30, 2019

October 30, 2019, by John Norris

This afternoon, the FOMC (Federal Open Market Committee) announced today it intended to cut the overnight lending target bank between member banks by 25 basis points to a range of 1.50-1.75%, and instructed the Open Market Desk at the Federal Reserve Bank of New York to “undertake open market operations as necessary” to this end effective October 31, 2019. In layman’s terms, the Fed cut rates as everyone, and their brother, knew it was going...

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Quick Note on US GDP on October 30, 2019

, by John Norris

The Bureau of Economic Analysis released its ‘first stab’ at calculating 3Q 2019 GDP (Gross Domestic Product) this morning (10/30/2019). It estimates/estimated the US economy grew at a 1.9% annualized rate last quarter. This was slightly higher than “Wall Street’s” 1.6% estimate. Key takeaways are: Personal Consumption Expenditures remained healthy at a 2.9% annualized clip. Expenditures on finished products grew at a 5.5% rate Expenditures on services grew at a 1.7% rate. Private Domestic Investment...

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Common Cents & The NBA on October 25, 2019

October 25, 2019, by John Norris

In case you might have missed it, there is currently a brouhaha in the NBA (National Basketball Association) over a tweet Houston Rockets’ GM Daryl Morey posted on October 4, 2019. In it was an image with a caption which read: “Fight for Freedom. Stand with Hong Kong.” Let me repeat: there is currently a brouhaha in the NBA (National Basketball Association) over a tweet Houston Rockets GM Daryl Morey posted on October 4, 2019....

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Common Cents & Ennui on October 18, 2019

October 18, 2019, by John Norris

This past Tuesday, we met with clients in Northwest Alabama who asked me a very pointed and topical question: “how will this impeachment mess impact the markets and the economy?” As we were meeting in a church, and had just discussed some issues within our common denomination, I laughed and said: “so, we are going to hit all of it here today, huh? Religion and politics?” As Spinal Tap’s David St. Hubbins might say, it...

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Common Cents & Inflation on October 4, 2019

October 4, 2019, by John Norris

Last week, I discussed how the Federal Reserve is at risk of losing control of its monetary policy due to forces beyond its direct control, arguably. There is just too much debt and too few players with the wherewithal to finance it at the level(s) central bankers desire or mandate. In previous newsletters, I have written how negative interest rates are ironic, as they discourage risk taking rather than encourage it. This morning, in response,...

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Common Cents & Disruption on September 27, 2019

September 27, 2019, by John Norris

This week, I have had a number of people ask whether ‘we’ are concerned about the recent push to impeach the President, this time over a conversation he had with the Ukrainian President. In all honesty, our Investment Committee hasn’t convened over the matter, and I am not personally losing sleep. As Yogi Berra might have said: “It’s like déjà vu all over again.” To be sure, impeaching the President of the United States of...

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