Sonu Varghese
The Gems of Buffett’s Annual Letter
Warren Buffett’s annual letter to Berkshire shareholders is always a must-read. This year’s version didn’t disappoint, with some great takeaways, as my colleague Ryan Detrick discussed the other day. What’s particularly great is that he’s not shy to show the numbers. They’re the first thing you see, following the table of contents. From 1965 to …
Sonu Varghese
March 2, 2023
Markets Now Expect Higher Rates, For Longer
We’ve seen volatility come back into equity markets over the last few weeks. Ironically, this has come amid a slew of stronger-than-expected economic data, including payrolls and consumption. Consumer confidence is also rising. The problem is that inflation numbers have stopped decelerating as fast as they were a few months ago. We wrote about this …
Sonu Varghese
February 24, 2023
Can the US Manage Its Debt? 😱
The US national debt is about $31 trillion right now, which is equivalent to about 120% of GDP (as of the third quarter of 2022). Massive, but also note that this is down from a peak of 135% in the second quarter of 2020. As a point of clarification, the US government typically racks up …
Sonu Varghese
February 23, 2023
American Consumers: Have Money, Will Spend
“American Consumers: Have money, will spend“ That, in a nutshell, is the story of the economy right now. Retail sales and food services surged 3% in January, making a mockery of expectations for a 1.7% gain. This is the largest monthly increase since March 2021, but that came on the back of stimulus checks. So …
Sonu Varghese
February 16, 2023
Inflation Progress Stalls as the Economy Accelerates
January inflation data hit the nose on expectations. Headline CPI rose 0.5% and is up 6.4% year-over-year, while core CPI (ex-food and energy) rose 0.4% and is up 5.6% year-over-year. The fact that inflation is coming in at expectations is in and of itself a victory. That’s a sharp contrast to last year when inflation …
Sonu Varghese
February 15, 2023
The Tech Layoffs in Perspective
Putting the Tech layoff announcements in perspective It’s hard to get away from all the headlines about layoffs in the Technology sector these days. The most recent was Yahoo, which announced they were laying off 20% of its workforce, about 1,600 people. The firm, Challenger, Gray, and Christmas, Inc., tracks layoff announcements and their most …
Sonu Varghese
February 10, 2023
Carson Investment Research “House Views”: Blending Data, Perspectives, and Narrative
We here at the Carson Investment Research Team regularly update our “House Views” on the markets, and specifically various asset classes that make up the core of our portfolios. These views are the foundation of our active asset allocation recommendations and form the basis of decisions we make while managing various portfolios on the Carson …
Sonu Varghese
February 9, 2023
Boom Goes the Labor Market
Sometimes a meme can convey a white paper’s worth of sentiment within a single picture; that’s why they spread faster than the news sometimes. so, let’s keep it simple: The economy created 517,000 jobs in January, well above expectations for a slowdown to 175,000. The unemployment rate is at 3.4%, the lowest level since …
Sonu Varghese
February 3, 2023
The Fed Downshifts and Shows Flexibility
This week, the Federal Reserve raised rates by 0.25%, taking the federal funds rate to the 4.50-4.75% range. This is the slowest pace of increase since last March and a welcome downshift after the aggressive pace we saw last year. They also said that ongoing interest rate increases will be appropriate to return inflation to …
Sonu Varghese
February 2, 2023
The Economy Had a Strong Close to ’22…Now What?
The latest GDP growth numbers for Q4 2022 came in at 2.9% quarter-over-quarter (annualized rate), which was higher than expectations for a 2.6% reading. This is only slightly below the Q3 growth rate of 3.2%. Over the full year, GDP growth was up just 1% compared to the end of 2021. But this hides the …
Sonu Varghese
January 27, 2023