Sonu Varghese
We Now See a Path to Lower Inflation
April’s CPI inflation data came in at expectations. Headline inflation rose 0.4% and is now up 4.9% over the past year. That is well below the peak rate of 9.1% last June. The big picture is inflation has already pulled back in a big way. That is primarily because of lower energy prices, and a …
Sonu Varghese
May 16, 2023
7 Questions About Regional Banks
There are so many questions that we get from our advisors and clients about the regional banking crisis, in addition to the debt ceiling (which Ryan covered in another blog). Here’re some answers to some of the common questions. What is happening with regional banks? The crisis erupted with Silicon Valley Bank (SVB) in early …
Sonu Varghese
May 11, 2023
Data Suggests the Economy Is Doing Just Fine
If you were worried about a sudden stop for the economy on the back of a banking crisis, you may want to know that the April employment data suggests that the economy is doing just fine, perhaps more than fine. Of course, this is not to say that the banking crisis is not a problem. …
Sonu Varghese
May 5, 2023
May the Fed be With You
Happy Star Wars Day, or if you’re fan like I am (or have a birthday today like I do), May the 4th be with you! Of course, the title is a play on all this, but I find it apt since the Federal Reserve (Fed) looms so large as far as investors are concerned. The …
Sonu Varghese
May 4, 2023
Don’t Be Fooled by the Headline GDP Number
The Bureau of Economic Analysis just reported that the U.S. economy expanded by only 1.1% in the first quarter. By the way, that’s an annualized rate – the actual quarter-over-quarter increase is just under 0.3%. This was well below expectations for 1.9% growth. More fodder for recession calls? Short answer, no. GDP can basically be …
Sonu Varghese
April 27, 2023
Consumers Are Doing OK, but Don’t Feel Good About the Future
The Conference Board just released its consumer confidence index for April, and the data wasn’t great. The index fell from 104 to 101.3, and it is well off last December’s 109 level. Not to mention the fact that it’s more than 30 percentage points below where the index was in February 2020 (just before the …
Sonu Varghese
April 26, 2023
Is the Housing Market About to Give the Economy a Boost?
Housing was the biggest drag on economic growth last year. The economy grew by 2.1% in 2022, but that overcame a 0.93%-point drag from residential investment, i.e. housing. In fact, it’s been a drag on GDP growth for 7 straight quarters now (through the end of 2022). It got worse over the last 3 quarters …
Sonu Varghese
April 21, 2023
Should We Worry That Bankruptcies Are Rising?
Corporate bankruptcies are rising in 2023, based on S&P data. The first 3 months saw 183 bankruptcy petitions, which was the highest for a first quarter since 2010. March alone saw 71 corporate bankruptcy petitions, the fourth straight month of increase and the highest monthly total since July 2020. Obviously, the most noteworthy bankruptcy filing …
Sonu Varghese
April 20, 2023
Stocks 👏 are 👏 real 👏 assets
Inflation is on everyone’s mind these days, but as we wrote last week, the good news is that inflation is on a relatively strong downtrend. As of March, CPI was up 5% over the past year, but well below the peak of 9.1% we saw last June. However, even 5% inflation is really elevated. No …
Sonu Varghese
April 19, 2023
The Good, The Bad, The Inflation
The March inflation report showed that CPI inflation rose only 0.1%, slightly below expectations. Over the past year, inflation is now up 5%, well off the peak 9% from June 2022. As you can see below, the big driver of lower inflation has been energy and food. Energy makes up about 7% of the “inflation …
Sonu Varghese
April 13, 2023