Deeper Analysis

March and First Quarter 2020 in Figures

March 31, 2020

Similar to February, the dollar’s net movements against the euro, yen, and  Swiss franc were an oasis of stability amid the continuing financial market drama elsewhere. For the whole first quarter, the dollar was particularly well-bid against sterling and commodity-sensitive currencies like the Australian, New Zealand, and Canadian dollars. For central bank watchers, March was […] More

Might U.S. GDP Contract as Sharply as It Did in 2008-09?

March 17, 2020

At least two consecutive quarters of falling gross domestic product in the United States now look unavoidable. Even President Trump has acknowledged the probability of a recession and postulated that the coronavirus outbreak may not recede until well into the third quarter. Late in 2019, few analysts were predicting a recession, but now most do. […] More

Bear Market Facts

March 12, 2020

As certainly as day follows night, the onset of a bear market will elicit advice from your financial adviser not to panic because equities always prove to be lucrative in the long run. All one needs is a well-balanced portfolio and some patience to wait out the market hysteria. Much of the time, the reassurance […] More

Greatest Convergence of U.S. and Euroland Manufacturing Since January 2018

March 2, 2020

The U.S. ISM-compiled purchasing managers index dropped 0.8 points to a 7-month low of 50.1 in February. Such a level connotes stagnant growth in factory output and historically has been also consistent with real GDP growth of about 2.1%. The composition of the report was more concerning than the aggregated index. Imports, which affect GDP […] More

February 2020 in Figures

February 29, 2020

February 2020 will be long remembered for its final week that saw an historic drop in equity prices around the world related to concerns about the ultimate economic impact of the spreading covid-19 virus. The Dow Jones Industrials Average index fell on each of the final seven business days of February, losing 13.6% in total […] More

Japanese Sales Tax Hike Hammered Economic Growth Last Quarter

February 17, 2020

The Japanese economy again contracted sharply after a hike in the national sales tax. This is a phenomenon with lots of history. A 3% sales tax was introduced initially in April 1989. Back then, Japan was viewed like China is currently — an up-and-coming economic rival that could soon overtake the United States. The sales […] More

January 2020 in Figures

January 31, 2020

The month of January presents another recent example of a time when key dollar pairs against the euro, yen, Swiss franc or sterling hardly moved on balance even as other financial markets underwent big changes. It was a month subjected to big distortions toward the end in the face of China’s rapidly spreading health crisis. […] More

Comment on U.S. GDP Last Quarter

January 30, 2020

The first estimate of U.S. real GDP growth in the final quarter of 2019 of 2.1% annualized compared to the third-quarter level matches quarterly growth last summer and marks the third straight quarter with growth at or very close to 2.0%. Fourth quarter-over-4Q growth was 2.3%. Calendar 2019 average growth equaled 2.3% as well, lowest […] More

Treasury Dept. Report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States

January 14, 2020

China had been designated as a “currency manipulator” last August, but that label is being rescinded on the eve of the Phase One U.S.-Sino trade pact. In theory, retaliatory actions can be more speedily imposed by the President on so-called currency manipulators, but the switch in designation in reality will make little practical difference. In […] More

Closest Convergence of U.S. and Euroland Manufacturing Sectors Since January 2018

January 3, 2020

In the ISM report, a 5.9-point drop in production resulted in the weakest U.S. PMI reading (47.2) since June 2009. The components for orders of 46.8 and jobs of 45.1 were 0.4 and 1.5 points below their November results. The IHS survey of U.S. manufacturing also resulted in a lower PMI reading last month than […] More