Deeper Analysis

Manufacturing Recession on Both Sides of the Atlantic

October 1, 2019

The manufacturing sector is very sensitive to the strength of export demand. Consequently, the trends of the U.S. and euro area manufacturing purchasing manager indices provides good empirical evidence to test President Trump’s oft-repeated assertion that the United States will win a trade war and incur minimal collateral damage along the way. Euroland’s IHS-compiled PMI […] More

September and the Third Quarter in Figures

September 30, 2019

A well-bid dollar in the third quarter correlated with lesser gains in U.S. equity prices than in the stock markets of Germany and Japan. Despite intensifying White House complaints that the Fed isn’t cutting U.S. interest rates enough, two reductions of the federal funds target were engineered in the quarter totaling 50 basis points. In […] More

Impeachment and the U.S. Stock Market: Historical Precedents

September 24, 2019

A decline today in U.S. share prices has been attributed in part to a rising perceived risk that impeachment proceedings will be brought against President Trump. In the flexible dollar rate era, only two presidential impeachment events have occurred, and the performance of the U.S. stock market in those two examples could hardly be more […] More

Takeaways from Jerome Powell’s Press Conference

September 18, 2019

Fed Chairman Powell didn’t say anything particularly surprising at today’s press conference. His answers to a wide rage of questions, some on awkward topics like the one-directional abusive criticism of the Fed coming from the White House, were predictable on several levels. His comments adhered to long-established Fed stances such as the data dependency of […] More

Comment about the ISM’s U.S. PMI for Non-Manufacturing

September 5, 2019

U.S. share prices were thrust sharply higher today, initially by news that Chinese officials are coming to Washington to resume trade talks, but again later as investors reacted to released U.S. data. U.S. labor productivity and unit labor costs increased robustly last quarter by 2.3% and 2.6% at annualized quarter-on-quarter comparisons. Factory orders advanced 1.4% […] More

August PMI Data Seemingly Discredits the View that the U.S. Will Win a Trade War and Incur Minimal Collateral Damage

September 3, 2019

The Institute of Supply Management’s monthly reading of the U.S. manufacturing purchasing managers index slipped below the 50 level for the first time in 43 months, signifying that the sector is no longer merely expanding more slowly but in fact has begun to outright deteriorate. The survey’s diffusion index for orders, which are sensitive to […] More

August in Figures

August 31, 2019

The most discussed financial market development of August is actually not depicted in the standard month in figures table below, and that was the inversion of the U.S. yield curve, which has been a pretty reliable leading indicator of a recession beginning 18-24 months later. Between the end of July and August 30th, the U.S. […] More

Diminishing Dollar Swings Since Trump Became a Market Factor

August 21, 2019

Since emerging on the geopolitical stage as a candidate for U.S. president around mid-2015, Donald Trump has personified uncertainty in style and substance. He is a leader without equal in generating event risk for market players. There’s a lot of money to be made from making money in the market only if one had advance […] More

U.S. Manufacturing Advantage Grew Versus Euro Area During July

August 1, 2019

The ISM-compiled U.S. manufacturing PMI in July slipped another half point of 51.2, which is a month short of a 3-year low. New business improved slightly, but the sub-indices fell for production, employment and prices. The slower improvement in U.S. manufacturing was outmatched by a faster deterioration in Euroland manufacturing. The IHS-compiled PMI for the […] More

July 2019 in Figures

July 31, 2019

Even though only the Fed among major central banks cut interest rates in July, long-term interest rates declined in Europe but changed hardly at all over the course of the month in the United States, Canada, or Japan. The Fed’s 25-basis point interest rate cut announced on the final day of the month was its […] More