What Is The U.S. National Debt's Risk To Investments?

Higher-For-Longer Risk For Rates Drives Up Treasury Yields

Federal Reserve Chairman Jerome Powell on Tuesday conceded that inflation progress has stalled and the case for rate cuts has weakened. The 10-year Treasury yield is paying attention and rose to 4.67%, the highest since Nov. 6. The Treasury market has convinced the crowd to demand a higher yield.

Teen Employment Numbers Improve In March 2024

According to the U.S. Bureau of Labor Statistics, teen employment surged in March 2024. The number of teens Age 16 to 19 counted as employed jumped by 224,000 to reach 5,832,000. Number of Americans Age 18 and 19 with jobs rose 161,000 from the previous month to 3,756,000, the highest since April 2008.

The Stock Market Sell-Off May Have Only Just Begun

The S&P 500 has pulled back 4% from recent highs, but it's not due to geopolitical tension. Rates, the dollar, yen, and oil are not reflecting typical flight to safety characteristics. Markets are correcting for their massive blunder. Financial conditions are tightening, and the market is correcting its errors.

A (Un)Certain Framework

The FOMC has shifted away from specific metrics and adopted a more ambiguous strategy. The Fed has been using a varied set of targets for monetary policy, but the relevance of these data points is questioned. The FomC's outlook for inflation has become increasingly tilted to the upside.

The World Is Overweight U.S. Assets

The world is now overweighting U.S. Assets by 40% of gross domestic product. By 2012, the private sector held a sizeable short position in the U.s. Dollar. As a share of GDP, the world has shifted from overweighting foreign assets to underweighting them. The world has experienced superior growth and asset market performance in the last decade.

U.K. Wage Growth Proves Sticky Despite Rising Unemployment

Private-sector pay up 12% annualised on a month-on-month basis. The unemployment rate notched up to 4.2% from 3.9%. Wage growth is temporarily stuck in the 6% area. The Bank of England will wait until August to cut rates for the first time.

Why Are U.S. Yields Rising? It's The Economy

Despite likely Fed rate cuts this year, U.S. Government bond yields have risen on the back of stronger-than-anticipated economic performance. Rising yields reflect the outperforming economy and the market's expectations for fewer interest rate cuts. The economy isn't showing any signs of slowing and the broader disinflation trend is intact.

Consumers Binge Despite Higher Interest Rates, And The Fed Watches Them Nervously

Retail sales in March increased by 0.7% seasonally adjusted, with a year-over-year jump of 4.0%. Total retail sales jumped 10.1% in March from February to $712 billion. Ecommerce, food services, and general merchandise retailers were the biggest drivers of growth.

The Tides Of Time: The Impact Of Aging Demographics

Should Vanguard S&P Small-Cap 600 Value ETF (VIOV) Be on Your Investing Radar?

Should WisdomTree U.S. SmallCap Dividend ETF (DES) Be on Your Investing Radar?

Rate Cuts Off The Table For Near-Term Outlook: Futures Market

Fed funds futures indicate that interest rate cuts are unlikely in the months ahead. The policy-sensitive US 2-year Treasury yield has downgraded prospects for a near-term rate cut. The implied probability is heavily skewed toward no rate cuts for the next two FOMC meetings in May and June.

Moderately Bullish On 2024: Markets To Overcome Pessimism And Challenges

Earnings Growth Not Just About Tech

AVUV: The One Actively Managed Fund That I Like

Avantis US Small Cap Value ETF has significantly outperformed the Russell 2000 and its associated sub-indices. It has also marginally outperform the S&P 500. The majority of AVUV's outperformance occurs in the months of May to August. It offers diversification benefits to investors with a bullish view on small caps. The Russell 2000 has a negative return of 5% this year.

Weekly Report: what happened at IWN last week (0408-0412)?

Iran Attacks Israel: What Middle East Turmoil Means For Markets

Iran launched missile and drone attacks against Israel over the weekend. Conflict in the Middle East has little effect on overall stock market performance but can impact the price of commodities, particularly oil. Continued tensions may benefit oil stocks, while gold is seen as a hedge against geopolitical chaos. The Middle East isn't likely to affect the overall markets.

A Black Swan In Plain Sight: The 10-Year Treasury Yield To 6%

Treasury yields are near 20-year highs, with implications for housing, autos, banks, tech, and the stock market. We could easily reach 6% for 10-year Treasury yields, 9% for mortgages, and 8% for car loans in 2024. This is a potential black swan for markets expecting a return to ultra-easy monetary policy.

A Stronger Dollar May Drive The S&P 500 Much Lower

Stronger dollar will affect financial conditions, earnings estimates for multinational companies, and lead to a contraction in the S&P 500's PE ratio. US CPI report and ECB policy meeting highlight divergent paths for the Fed and ECB, driving further dollar strength. Widening spreads between central banks and interest rates could send the euro lower and impact other currency pairs.