• Meetings, Minutes, and Manufacturing

    Counting the minutes FOMC meeting minutes are issued three weeks after each meeting and help inform the market of the Fed’s thoughts on monetary policy changes (or lack thereof). The last Fed meeting indicated a big shift from further interest rate hikes to a pause on interest rate hikes, so the market has been waiting to fully understand the Fed’s thought process behind this more dovish outlook. The meeting minutes were generally optimistic due to the strengthening labor market and solid GDP while the key area of concern (appropriately so) was slowing global growth.  Moral of the story: The FOMC members seem to be in agreement about approaching future interest rate…

  • No way, not real

    #fakenews  Because of the government shutdown, we hadn’t received retail sales numbers from the Commerce Department until this week’s report that showed December retail sales plummeted 1.2%, printing the worst report since 2009. This number was a big surprise to economists who were expecting a 0.2% gain. The weakness was across all categories, including a 3.9% decline in online sales, which is a little strange when major online retailers, like Amazon, reported one of the best holiday seasons in years. This report was actually so bad that economists are crying #fakenews on this one and trying to point fingers at any rationale to prove this is a one-time anomaly –…

  • State of the Global Economy

    State of the Union This week we heard President Trump’s State of the Union address, during which he called for a bipartisan push for an infrastructure bill and lowered drug prices along with continued spending on defense. While spending $1.5 trillion on infrastructure over the next decade was part of Trump’s presidential campaign, the passing of an infrastructure bill seems unlikely without raising taxes to fund this level of spending. In terms of defense spending, the government is expected to spend around $716 billion in 2019.  Moral of the story: Depending on the ability for Congress to play nice and actually make things happen, there are winners and losers in…

  • Reassurance

    Fed speak  The Fed held its first policy meeting of the year this past week and let me tell you, the markets were ecstatic at what they heard. The FOMC voted unanimously to keep rates unchanged, which was the consensus expectation. The real game changer here was the clear messaging from Fed Chairman Jerome Powell after the policy meeting: the Fed intends to be patient and consider economic conditions as it determines future interest rate and liquidity moves. Stocks rallied in a big way on this reassurance.  Moral of the story: This is the second time the Fed has given us confidence that it won’t determine policy with a blind eye…