Tag Archives: economic growth

Sniff, Sniff …. Is that inflation I smell ??

On Tuesday of this week an economic report caught many by surprise. The Consumer Price Index.

CPI gets Hot !

CPI Econoday M over M CPI  6-17-14

If this continues, this is a VERY strong sign the economy is gaining traction.

The bars tell a better story than the line in the chart !

Inflation at reasonable levels is good, especially given the alternative (deflation) ….. Now “Goldilocks/Three Little Bears” ….. not too hot, not too cold….hopefully just right !!

We will review the winners and losers of inflation, but for now let’s watch and see if it continues!

Have a Great Friday!

John A. Kvale CFA, CFP

8222 Douglas Ave # 590
Dallas, TX 75225

Bonds Rally, Lowering Rates … A Crazy Year … “The Brain” in the house

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!

10 Year 10-23-13

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

8222 Douglas Ave # 590
Dallas, TX 75225

Global Executives More Positive … Expectations Become Reality ?

You know us and surveys, especially about squishy subject matter.  In a recently released McKinsey report which we found very interesting, especially considering it echoes our thoughts of a Europe recovery and possible global recovery, ALL areas measured expect growth.

Note the highlighted Euro zone improvement AND improved expectations across the board. NICE…. Expectations CAN lead to reality… in our opinion.

Again, just because we can grow economically does not mean capital markets will continue higher, unfortunately there can and often are disconnects between economic growth and the capital markets i.e. Markets here domestically have WAY outgrown growth thus far this year.

Here is the chart.

McKinsey SVG_EconConSrvy_Sep13_ex1

Have a Great Monday!

John Kvale

8222 Douglas Ave # 590
Dallas, TX 75225