Author Archives: Michael Murphy

Dear New World Investor: We got the May Personal Consumption Expenditures Index (PCE) report last Friday morning. Year-over-year headline inflation cooled to 2.6%, the lowest in three years. The Fed pays close attention to the core PCE, which excludes volatile food and energy price changes. Core PCE also was...

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Dear New World Investor: We get the May Personal Consumption Expenditures Index (PCE) report tomorrow morning. Rent is only 19% of the PCE compared to 33% of the Consumer Price Index (CPI). The Fed pays close attention to the core PCE, which excludes volatile food and energy price changes....

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Dear New World Investor: I had an interesting exchange about PayPal with a subscriber who has been in financial services for over 40 years. He wrote: “Usually hedge funds and institutional investors hold stocks for a long period of time. Retail investors like myself do not unless it’s an...

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Dear New World Investor: Job openings weakened, manufacturing activity weakened, and the main drivers behind the resilient American consumer – real disposable income and the savings rate – are losing steam at the same time. Real disposable incomes, pinched by ongoing inflation, have risen only modestly over the past...

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Dear New World Investor: Today’s GDP revisions boosted the December quarter from +3.3% to +3.4%. but reduced the March quarter estimate from +1.6% to +1.3% due to downward revisions to consumer spending. Click for larger graphic h/t Yahoo Finance This does not support my forecast for a small recession...

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Dear New World Investor: We’ll get the next Personal Consumption Expenditures Index on May 31 and the next Consumer Price Index at 8:30am on June 12. That same day, at 2:00pm, the Fed issues their next meeting results. Albert Edwards, the Société Générale strategist, wrote: “I believe the Fed...

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Dear New World Investor: The headline Consumer Price Index increased 3.4% year-over-year in April, a tick slower than March’s 3.5% and right on the consensus estimate. The month-over-month change was 0.3%. Year-over-year core inflation, leaving out food and energy, was +3.6% in April, down from +3.8% in March. Monthly...

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Dear New World Investor: Last Friday’s April jobs report was very weak. The economy added 175,000 jobs, far below the 240,000 estimate. Unemployment ticked up to 3.9%, hiring slowed, the length of the average workweek ticked down, and wages rose less than forecast. Click for larger graphic Also last...

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