Author Archives: Michael Murphy

Dear New World Investor: As we come to the end of the year, company news flow shrinks sharply. They enter a blackout period when they can’t buy back stock and don’t want to comment on how their December quarter is going, unless it is much better or much worse...

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Dear New World Investor: Before the Fed meeting decision next Wednesday, we get November payroll growth tomorrow morning and the November Consumer Price Index next Tuesday morning. This week we found out that US job openings dropped to more than a 2½-year low in October. The Labor Department’s Job...

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Dear New World Investor: This morning’s Personal Consumption Expenditures Index (PCE) announcement showed October prices grew 3% year-over-year, down from 3.4% in September and in line with expectations. The core PCE, which excludes volatile food and energy prices and is the Fed’s favorite measure of inflation, grew 3.5%, down...

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Dear New World Investor: This is the fifth week of the BofA Bull & Bear Indicator giving a contrarian “Buy’” signal (left graphic). Note the median 1% to 3% gains from 20 buy signals in the past 20 years (right graphic). That targets 4550 for the S&P 500 –...

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Dear New World Investor: The headline October Consumer Price Index showed prices fell 0.04% over September – deflation! – and rose 3.2% over last year. Both were slower than September’s 0.4% monthly and 3.7% annual increase, and below the consensus expectation for 0.1% and 3.3%. The core CPI...

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Dear New World Investor: The September quarter was the best earnings quarter in a year for the S&P 500, thanks to strong consumer spending as Americans continued to dine out, take trips, and buy online. That drove profits at some of the biggest companies. Click for larger graphic According...

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Dear New World Investor: So the Fed continued their pause and said they don’t see inflation reaching 2% until 2025, which implies these rates or higher for another 18 months to two years. I expect a new record length of time between the last rate hike and the first...

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Dear New World Investor: This morning’s first estimate of September quarter real Gross Domestic Product growth was +4.9%. Click for larger graphic It shocked Wall Street, which was looking for +4.5%, and the Blue Chip economists at +3.5%, but not you, I hope. The final GDPNow reading from the...

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Dear New World Investor: Fed Chairman Powell spoke today. This struck me as a notable shift from Powell: “Indicators of wage growth show a gradual decline toward levels that would be consistent with 2% inflation over time.” He didn’t even mention core services ex-housing—the Fed’s proxy for concerns about...

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Dear New World Investor: This was worry-about-inflation week, with both Producer Price Index and Consumer Price Index reports. The TL:DR is inflation has slowed, remains sticky at current levels, and the Fed will hold rates higher for longer even if they don’t declare one more increase. In that environment,...

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