Episode 64 of the Trading Perspectives Podcast

November 12, 2019, by Sara McPherson

Longer-Term Interest Rates Longer-term interest rates have been going up, and that is a good thing? John and Sam discuss how lower rates were supposedly the cure for what ails us earlier in the year, and how that has changed in November. Perhaps there is some truth to the argument: “higher long-term interest rates are bad for asset prices except for when they aren’t.” They aren’t, or haven’t been, recently.  But why?      ...

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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!

November 1, 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

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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Episode 62 of Trading Perspectives Podcast

October 28, 2019, by Sara McPherson

High Income and Corporate Taxes This week, John and Sam focus on the importance of taxation in order to boost economic growth and alleviate poverty.  Dr. Abhijit Banerjee, a professor at MIT, was recently featured in a Bloomberg article in which he states that taxing the rich and large corporations is the only way to alleviate poverty.    Although taxation is important to economic growth, high tax rates don’t ensure a strong economy.  So, what is...

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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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Dear John

October 23, 2019, by Sara McPherson

Chief Economist, John Norris, answers the most commonly asked questions. Dear John, What is the biggest threat to your economic forecast and investment strategy moving forward into 2020? First things first, the Federal Reserve is almost always the low-hanging fruit to be the biggest threat to anyone’s economic forecast. However, that is an unsatisfying answer, largely due to there being so much tension in our society and the markets. The Federal Reserve? That old saw?...

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