Front Page|Our Services|Our Team|Client Center|Financial News|Events|Contact Us

Financial News

More Articles  Printer Friendly Version

 

Weekly Investor Update

5077 2

Housing starts have dropped from the peak rate of 1.8 million in April 2022 to 1.4 million in September, the nation is not experiencing the collapse in starts of new single-family homes. The current rate of housing starts remains much higher than experienced during most of the last economic expansion cycle, which ended with the Covid recession in April 2020. Multiple academic studies estimate the U.S. needs to build about 1.5 million new single-family houses annually to accommodate population growth. The actual rate of new houses started annually was less than 1.5 million for many years.

5077 3

The U.S. Index of Leading Economic Indicators (LEI) declined for the seventh consecutive month, and economists at The Conference Board, who compile the data on the 10 indexes that comprise the LEI every month, now say the “persistent downward trajectory in recent months suggests a recession is increasingly likely before yearend.” This chart shows how the LEI has definitively rolled over well in advance of previous recessions, except for the Covid recession.

5077 4

Inflation may have peaked, following its painful post-pandemic surge. The solid red line in the accompanying chart shows inflation using the metric used in official Federal Reserve’s policy pronouncements. The unfortunately-named Personal Consumption Expenditure Deflator (PCED) index declined again in September. From its peak in June 2022 at 7%, the PCED has declined sharply. However, the Core PCED index has not declined as definitively.

But economists at JPMorgan Chase and UBS are expecting inflation to plunge in the next year. Greg Ip, a veteran financial economics reporter at The Wall Street Journal, said in an article on Wednesday, October 26, that JPMorgan Chase economists are predicting Consumer Price Index will collapse from 8.2% in September to 3.2% in September 2023, and that UBS’s economists predict inflation will drop to 2% by December 2023.

5077 5

Released on Thursday, the Bureau of Economic Analysis’ advanced estimate of growth of U.S. gross domestic product (GDP) in the quarter that ended September 31, 2022, came in surprisingly high, at 2.6%. Just three weeks ago, the consensus forecast of the 60 leading economists surveyed quarterly by The Wall Street Journal called for a third-quarter GDP of 1.6% -- but it came in at 2.6%, exceeding expectations. But what’s more important to the investors is that the consensus forecast is for a short and shallow recession. The red bars on the right side of the chart above show the negative growth expected in the second and third quarter of 2023 by leading economists is slight compared to previous recessions since 1997.

5077 6

The S&P 500 stock index closed Friday at 3901.06 gaining +2.46% from Thursday and +3.95% from a week ago. The index is up +74.36% from the March 23, 2020, bear market low and down -18.66% from the January 3rd all-time high.

​

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is a market-value weighted index with each stock's weight proportionate to its market value. Index returns do not include fees or expenses. Investing involves risk, including the loss of principal, and past performance is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted.

Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences. You should consult the appropriate financial professional regarding your specific circumstances.
The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions.
This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.


Email this article to a friend


Index
On Wednesday, We’ll Know If The Federal Reserve Will End Inflation By Causing A Recession
Technology Drove S&P 500 1.9% Higher Friday, But Look At Tech's Terrible 2022 Loss
Here What To Know To Invest Wisely
Prudence Requires Positioning Portfolios For An Economic Expansion
2022 Was The Worst Year For Stocks Since 2008
4Q '22 Is Closing Strong, But Recession Expected In 1Q '23
A Key Principle In Fruitful Investing
Plan Now For The Next Recovery
Ending Inflation Will Take Months
Economists Predict Lackluster 4Q22 Growth; Fed Algorithm Predicts 4.3%
Amid Darkening News, Positive Economic Signs
Stocks Soared This Past Week But Economic Pain Is Still Ahead
Factors Blurring The Likelihood Of A Recession
Stocks Rose 4.7% This Past Week, Amid A Bear Market
105 Years Ago In Investing: Conditions Were Much The Same As Today

This article was written by a professional financial journalist for Vantage Point Financial Services, LLC and is not intended as legal or investment advice.

©2023 Advisor Products Inc. All Rights Reserved.
© 2023 Vantage Point Financial Services, LLC | 329 Regency Ridge Drive, , Centerville, OH 45459 | All rights reserved
P: 937-432-1111 | F: 937-432-1110 markblack@vantagepointadvisor.com |
Contact Us

Securities offered through First Allied Securities, Inc., A Registered Broker/Dealer, Member: FINRA / SIPC.
Advisory services are offered through First Allied Advisory Services, Inc., A Registered Investment Adviser.

This site is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any security which may be referenced herein. We suggest that you consult with your financial or tax advisor with regard to your individual situation. This site has been published in the United States for resident of the United States. Persons mentioned in this site may only transact business in states in which they have been properly registered or are exempt from registration.

Privacy Policy | ADV