Author Archives: Michael Murphy

Dear New World Investor: We’ve made a lot of money by being early to the AI boom, and there may be many months or even years to go. But I have two big problems with the current speculation. First, you have to realize that the current Large Language Models (LLMs) are an amazing advance, but they aren’t intelligent and they don’t think. They do store more data than any human could, and then use it to predict the next word in a sentence way faster than any human could. That’s a great application of current semiconductor technology, but the only...

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Dear New World Investor: Richard Russell wrote his Dow Theory Forecasts until he died at 91 years old. I’ve always planned to write New World Investor longer, but I realized last week it may be as an every-other-week or even monthly letter instead of the grueling weekly schedule I’ve been on for the last 15 years. What happened was this. As many of you know, my wife and I finally are starting the natural burial ground she has been planning for 10 years. My job is mostly to deal with lawyers, licensing, accounting, and keeping track of burials in compliance...

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Dear New World Investor: First up, I am overwhelmed with our move and starting our natural burial cemetery, so without many events for the next two weeks and the Fed done, I am going to schedule another two-week interval for New World Investor. The next issue will be on October 2, with September payrolls due the next day. Of course, I will send a Flash Alert for any hot news – if Micron wiffs, Amgen finally bids for Akebia (don’t sell right away), etc. Yesterday, the Fed cut the expected 25bps (basis point, or ¼ of one percentage point) and...

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Dear New World Investor: Once a year, the Bureau of Labor Statistics benchmarks the March payrolls level to a more accurate but less timely data source called the Quarterly Census of Employment and Wages, which is based on state unemployment insurance tax records and covers nearly all US jobs. As you undoubtedly saw, the annual payroll revision of a record minus 911,000 jobs was even worse than last year’s -818,000. That’s over 1,725,000 phantom jobs in two years. Data had previously suggested the economy added about 1.76 million jobs in the 12-months from April 2024 to March 2025. The new...

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Dear New World Investor: Last Friday’s Personal Consumption Expenditures Index was pretty much a nothingburger. Prices rose 2.5% year-over-year, the same as June despite President Trump’s broad-based tariffs. The month-over-month increase was 0.2%, down from 0.3% in June. The year-over-year core PCE ticked up from +2.8% in June to +2.9% in July. Month-over-month core prices increased 0.3%, the same as June. The CME FedWatch Tool probability of a quarter-point cut in the Fed funds rate at the September 17 meeting actually ticked up a few points to 89.2%. That was in spite of a 0.5% jump in consumer spending in...

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Dear New World Investor: Change is in the air. At Fed Chairman Powell’s final Jackson Hole Economic Symposium speech, he said: “Overall, while the labor market appears to be in balance, it is a curious kind of balance that results from a marked slowing in both the supply of and demand for workers. This unusual situation suggests that downside risks to employment are rising. And if those risks materialize, they can do so quickly in the form of sharply higher layoffs and rising unemployment.” But, Jerry, what about inflation? “We cannot say for certain where rates will settle out over...

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Dear New World Investor: Last Friday’s July payrolls report showed only 73,000 new nonfarm jobs added, much less than the 104,000 expected. That was the lowest number in 10 months and much less than June’s originally reported 147,000 jobs. Click for larger graphic h/t Yahoo Finance As you know, I think the monthly numbers are mostly statistical garbage. June was revised down from 147,000 to just 14,000, while May was revised down from 144,000 to 19,000. That tells you what’s really going on – the economic models are way behind the real economy, which is tuning down. The -253,000 two-month...

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