Author Archives: Michael Murphy

New World Investor – 6.25.26

25
Jun 26
Dear New World Investor: The Federal Reserve’s preferred inflation gauge showed prices heated up to the highest level in three years, likely keeping the central bank holding interest rates steady with an eye toward hiking if inflation doesn’t dissipate. The year-over-year Personal Consumption Expenditures (PCE) index rose 4.1% in May, in line with expectations, and up from 3.8% in April. Month-over-month, inflation rose 0.4%, a tenth of a percentage point less than expectations and the same level as April. The core PCE excluding volatile energy and food prices – the Fed’s favorite inflation gauge – was up 3.4% year-over-year, in...

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New World Investor – 5.28.26

28
May 26
Dear New World Investor: (Sung to the tune of My Boyfriend’s Back by the Angels, 1963) Inflation’s back, and there’s gonna be trouble (Hey-la, hey-la, inflation’s back) Better buy it quick, ’cause the price is gonna double (Hey-la, hey-la, inflation’s back) Today’s Personal Consumption Expenditures Index (PCE) was both high and completely expected. The headline year-over-year number hit a three-year high in April at +3.8% – right on expectations. It was a clear acceleration from March’s +3.5%. Month-over-month, it was up 0.4%. The core PCE, the Fed’s favorite inflation indicator that excludes food and energy prices, was up 3.3%, also...

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New World Investor – 4.2.26

02
Apr 26
Dear New World Investor: The S&P 500 fell 4.6% in the March quarter, its weakest first quarter performance since 2022. In addition to the negative of high oil and gasoline prices today outweighing the positive – at least in the market’s mind – of not having Iran blow us all to smithereens tomorrow, investors foolishly gave up on the AI trade that I think will be the biggest investment opportunity ever. Nvidia, which has the first trillion dollar backlog in history, dropped 6.5%, Apple fell 6.6%, Alphabet (Google) was down 8.1%, Amazon booked -9.7%, Meta Platforms -13.3%, Tesla -17.3%, and...

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New World Investor – 3.5.26

06
Mar 26
Dear New World Investor: Well, that got weird in a hurry. Iran striking its regional neighbors was not on my dance card, and obviously is a massively escalation. It puts a lot of oil infrastructure at risk and makes private insurance on ships going through the Strait of Hormuz uneconomic. President Trump’s US Navy escorts won’t work – there are too many ships, it’s too costly, and some US sailors are going to die. His insurance plan won’t work, either, unless US taxpayers are happy subsidizing losses on oil shipments destined for other countries. Without decisive regime change soon, it’s...

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New World Investor – 12.24.25

24
Dec 25
Dear New World Investor: Right now, it’s jobs, jobs, jobs and inflation, inflation, inflation. Jobs: US nonfarm payrolls rose by 64,000 in November. That wasn’t much, but it was higher than the 45,000 jobs Wall Street expected, and up from October’s sharp decline of 105,000 jobs, It was probably just a blip up in the clear downtrend in job growth from its 2022 post-Covid high of 900,000. The unemployment rate unexpectedly ticked higher to 4.6%, its highest level since 2021, and up by 1.2 percentage points from its trough 30 months ago. Since 1950, this has never happened without the...

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New World Investor – 12.11.25

11
Dec 25
Dear New World Investor: Surprise! – not. The Fed cut the funds rate another 25 basis points (bps, or ¼ of 1%), bringing it down to 3.50%–3.75% after a relatively calm inflation report and relatively weak employment reports. It was their third cut this year and 1.75% in total since late 2024. Two Fed presidents voted to hold rates steady while President Trump’s appointment, Stephen Miran, wanted to cut rates by a half percentage point. That was the first time since 2019 that three Fed officials voted against a policy action. The dot plot forecast is for only one cut...

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New World Investor – 11.26.25

26
Nov 25
Dear New World Investor: The headline September payrolls report claimed the US added 119,000 jobs in September. That’s (A) more than double the consensus estimate for +50,000; (B) more than 5x August’s originally reported +22,000; (C) a positive number following August’s -26,000 revision to minus 4,000; and (D) probably wrong. WARN-act notices of impending layoffs across the 21 states tracked by the Federal Reserve Bank of Cleveland spiked to 39,000 in October. We have only seen a greater number of warnings in 2008, 2009, 2020 – all years marked by severe economic downturns – and May 2025. Click for larger...

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New World Investor – 11.13.25

13
Nov 25
Dear New World Investor: According to Bloomberg, the Fed is stopping their Quantitative Tightening in December and beginning Quantitative Easing, apparently because they are worried about the labor market. They described it as a technical maneuver and Chairman Powell cautioned that “…at a certain point, you’ll want reserves to start gradually growing to keep up with the size of the banking system and the size of the economy. So we’ll be adding reserves at a certain point…” “At a certain point” means sometime in the future. (Bloomberg thinks that could be as early as next summer – or later.) In...

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New World Investor – 10.30.25

31
Oct 25
Dear New World Investor: The shutdown-delayed September Consumer Price Index rose 3% year over year, up a tenth from 2.9% in August but slightly below consensus expectations for a 3.1% increase. It was the highest reading since May, but much of the gain was in food, gasoline, and energy. So the core CPI rose 3% year over year in September, down a tenth from 3.1% in August and below expectations. On a monthly basis, core prices increased 0.2%, below August’s 0.3% gain, which was the strongest monthly rise in six months. In general, tariffs are still pushing up goods prices...

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Flash Alert – Akebia (AKBA) – 10.29.25

29
Oct 25
Akebia Therapeutics (AKBA) announced this morning that in their Type C meeting with the FDA, they learned that the Agency would require “a significantly larger number of patients than proposed, and accordingly would require meaningfully more time and cost to complete.” Therefore, they are not going to pursue a broad non-dialysis chronic kidney disease (NDD-CKD) label for Vafseo. But: “We were encouraged by the discussion with FDA on smaller subgroups of CKD patients where we may be able to align on a potential clinical trial design and path forward.” Given CEO John Butler’s history of winning against the FDA, I...

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