Every recession has an inverted yield curve before it, but not every inversion leads to a recession. An inverted yield curve in and of itself isn't “bad,” but it is unusual. Why?
Yield curves normally slope upward because of reinvestment risk. The longer you lock your...
On Friday, the IRS announced that the total amount you can contribute to various retirements will be increasing in 2023. Employee contribution limits for 401k plans will be $22,500 in 2023, up from $20,500 in 2022, the largest increase ever. Individual retirement accounts will also increase,...
This year has been marked by war, high inflation, rising interest rates, and a drop in the stock market. However, value stocks have outperformed growth stocks. Value stocks are defined as companies that trade at a low price relative to the value of their assets. Growth stocks are defined as...
Based on a recent article by the Wall Street Journal, the SEC is looking to propose sweeping changes to how stock trades are processed with the goal of helping retail investors. Specifically, the SEC wants to re-route "market" orders from hedge funds (AKA wholesalers) to an auction process, among...
This week, Elon Musk emailed his 100,000 employees at Tesla and said the company would need to lay off 10% of its staff, noting that he has a "super bad feeling" about the economy. This comes after other executives have been making more and more negative predictions about the weather.
It's...
In the asset management world, other people's money (or OPM for short) is a slang term used for leverage. In some circles, OPM is also used when shrugging off poor performance. After all, "it's not my money." This isn't reflective of the entire industry, but it's hard to ignore the irony of the ...
This week, Netflix reported earnings. While the company had originally predicted it would grow by 2.5 million subscribers in the quarter, it instead lost 200,000 subscribers. This may be the beginning of a number of earnings misses in tech companies; it might also signal deeper shifts in the...
Americans are using credit cards to borrow money at record levels, with Total Credit Card Debt in the U.S. at $854B, up from ~$600B in 2012. But is this a good or a bad thing?
Total Credit Card Debt
It's important to compare credit card debt to personal income. In a healthy economy,...
The Producer Price Index (PPI) program measures the average change over time in the selling prices received by domestic producers for their output. The prices included in the PPI are from the first commercial transaction for many products and some services. (source)
The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. Indexes are available for the U.S. and various geographic areas can be found on the Bureau of Labor Statistics website. Average...
