Interest Rates/Bonds have been in the driver’s seat for some time now, especially after Bernanke’s almost promise to remove the punch bowl and then U-Turn and keep.
Bonds are Getting Jiggy
There is a saying that when everyone expects something to happen, it will not. This occurs because everyone being ready for something to happen means they are on the same side of the financial fence, preventing the expected happening.
In the most unexpected fashion possible, interest rates are now going lower, bonds higher, part due to a weak employment number this week, but we mostly think because, like ourselves, everyone in the financial community was expecting them to rise. Go Figure!
Crazy Year
As rates go down it gives equity markets a push ever higher. With an expected earnings growth rate of about 5% this year, equity markets have far overstated their fundamentals. Now with rates going lower, this too can lead to further positive movement for capital markets. Reminding myself here, when everyone expects something….it usually does not happen.
No matter, it has been a very fun, and uniquely crazy year.
THAT GLOW IN DALLAS is Donald “The Brain” lighting up 8222 Douglas, as he has been in town for a couple of days and will stay over the weekend before heading back to Houston.
Speaking of weekends…. we have one upon us, enjoy yours and thanks for reading our work. Next Week is Halloween (a Family Favorite) … Next Friday may garner a picture of the Kvale family costumes … if they are not too spooky !
Have a great day and a super weekend !
John Kvale CFA, CFP
http://www.jkfinancialinc.com
http://www.street-cents.com
8222 Douglas Ave # 590
Dallas, TX 75225
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Get Ready for Some Possibly Very Positive Macro Economic Reports …. The Year Over Year Comparison
In some ways it seems like an eternity…. in others it seems like a weird dream …. and in others it seems like only yesterday we started with a shutdown of the US Economy to thwart the spread of Covid….
Fast forward to today and we are almost exactly one year to the day when direct Economic Effects began ….
Get Ready For Some Crazy Macro Reports
Many, but not all Economic reports are Year over Year comparisons…
Imagine as we compare reports to an almost shut down economy, especially just in the very near term… to a much more robust, but of course not at full capacity Economy?
Here is the GDP from Fred (Federal Reserve St. Louis) – A rather slower moving Economic Measurement
Today, the United States Bureau of Labor Statistics Reported the most recent CPI number… here
This is February 2020 to February 2021 – likely to look much different next month!
Over the next few quarters many Economic numbers may have some really jaw dropping changes… just be aware it is likely better to use month over month comparisons if possible for a better measure.
We bet we will all see some pretty interesting Headline Reported numbers though!
Have a Great “Crazy Economic Report Watch” Day!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
jkfinancialinc
street-cents
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Posted in Economy, Investing/Financial Planning, Market Comments
Tagged BLS, economic growth, Economic Reports, Year over Year