Invest in What You Know

Category: economy

  • Federal Reserve holds interest rate and on average project rate cuts in 2024 in 12/13/2023 annoucement

    In the December 13th 2023 2pm EST press release, the Federal Reserve announced it will hold the Federal Fund interest rate between 5.25 to 5.50% unchanged. The Federal Reserve members on average anticipate a few rates cuts in 2024 according to their projections published at: https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20231213.pdf Rate cut benefits stocks as it become more favorable…

  • Companies make better products at lower prices to get the largest total addressable market (TAM)

    Lex’s Episode 386 podcast interviewed Marc Andreessen, co-creator of Netscape (https://lexfridman.com/marc-andreessen/) and one of the topics discussed is why capitalism is good. Marc reasoned that the largest addressable market TAM for any product is if everyone can afford it and want to use it. For that to happen the price point of the product would…

  • April 2023 jobs report shows jobs market still hot adding 253,000 jobs and 3.4% unemployment

    The US labor report for April 2023 released 8:30am ET showed US economy added 253,000 jobs and employment rate is at 3.4%. The number of unemployed population is 5.7 million. The unemployment rate in March 2023 was 3.5%. In February 2020 unemployment rate was 3.5% right before the pandemic. This is a sign that things…

  • March 2023 inflation rises .1% and 5% year ago.

    Inflation rate of change has declined. It rose just .1% for March. In February it was .4% and January was .5%. It is trending in a good way. Shelter is biggest inflation contributor and rising .6%. Energy declined by 3.5% for the month. Food fell slightly by .3%. Without food and energy, inflation rose .4%.…

  • Federal Reserve raised interest rate to 4.75% to 5% in March 2023 meeting

    Federal Reserve continue to see inflation elevated. Their target is 2% to reach price stability. Their believe is w/o price stability businesses will not function. To fight inflation, the committee raised interest rates .25% percent to a range of 4.75% to 5.0%. With the banking closure of SVB and weakening banking sector from deposits moving…

  • February 2023 CPI rose .4% to 6.0%

    Source: https://www.bls.gov/news.release/cpi.nr0.htm Consumer Price Index (CPI) Inflation is 6% compared to 12 months ago. A chart from U.S. Bureau of Labor Statistics shows 2022 had elevated inflation as compared to the last 20 years. Good news is inflation is trending lower. https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm January CPI 6.4%. December 2022 6.5% November 2022 7.1% October 2022 7.7% September…

  • Silicon Valley Bank collapsed – caused by bank run and rising interest rate

    FDIC will fully protect all depositors in Silicon Valley Bank. Secretary of Treasury Janel Yello, Federal Reserve Board Chair Jerome Powell and FDIC Chairman Martin Gruenberg released a joint statement in support of Silicon Valley Bank customers on March 12, 2023. https://home.treasury.gov/news/press-releases/jy1337 They made the move to restore confidence in the banking system and avoid…

  • US Added 311,000 jobs in February 2023

    Jobs market remain strong and grew 311,000 jobs according to Labor Department’s March 10, 2023 report. Unemployment rate is 3.6% Full report at: https://www.bls.gov/news.release/empsit.nr0.htm Most of the increase is from leisure and hospitality. High tech, warehouse and transportation declined. This matches what’s happening with the tech lay-off announcements from high tech companies. After Covid reopening…

  • Fed Chair Powell testifies before Senate – rates need to be higher

    In the March 2023 Congress testimony, Fed Chair Powell said based on rising inflation data and high jobs growth data, interest rate needs to go higher. Inflation is running at 5.4% and is too far from the 2% target. More interest rate hike will be needed to stop inflation. Powell says inflation has a psychological…

  • January 2023 jobs report shows strong increase and unemployment lowers to 3.4%

    January jobs reports showed nonfarm payroll employment / jobs increased by 517,000. With this increase, the unemployment rate goes down to 3.4%. It’s a stunning increase from the December number of 223k. The Federal Reserve has been trying to cool down the jobs market. Reason is a heated job market produces wage inflation as employers…

  • FOMC announced .25% interest hike February 1, 2023.

    In its February 1, 2023 press release, the Federal Open Market Committee (FOMC) recognized that inflation has eased. With the goal of getting inflation to 2%, the FOMC announced the federal funds rate will be raised from 4.50% to 4.75%. The magnitude of the increase is what Wall St. expected and the news was positively…

  • Labor department released December Consumer price index (CPI) down -0.1% from last month and is at 6.5% from last year.

    The labor department today released December 2022 Consumer Price Index and it showed a decline of -0.1% from last month and is at 6.5% from last year. A decrease in inflation is welcomed news for everyone. It lowers prices for consumers and signals peak inflation has been reached. The Federal Reserve uses inflation data to…

  • US December unemployment down to 3.5% and jobs increased 223,000 for December.

    December jobs report showed continued strength in labor market. Unemployment is lowered at 3.5% compared to a revised 3.6% in November. For the month 223,000 jobs were added. A strong labor report shows economy remain strong in the face of increased interest rates. One negative for a strong labor is wages remain tight and businesses…

  • Current yield curve rates indicate recession coming

    Yield Curve is a table of interest rates on U.S. bonds at different maturities or loan durations. This data is available from the U.S. Department of the Treasury. The 2023 data is available at https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value=2023 The 1/3/23 the tables looks like this: 1 Mo 2 Mo 3 Mo 4 Mo 6 Mo 1 Yr 2…

  • How to not to lose a million dollars

    During one’s investment journey, there will come a time when you’ve obtained good wealth. For example, during the pandemic, several companies were solving critical problems the world needed and their valuation went through the roof. Examples of these companies include Amazon, Zoom and Moderna. Zoom helped students continue their lessons with their teachers remotely. They…

  • Markets tanked after November Retail Sales report of -0.6% on fear of recession, Nasdaq dropped -3.2% and -.97% 12/15 and 12/16/22.

    The Commerce Department reported November 2022 Retails Sales of -0.6% from prior month. The expectation was for -0.3%. The consumers are adjusting for bad times ahead and cutting back expenses. On Wednesday 12/14, the Federal Reserve increased interest rates by .5% as expected but their messages was they need to keep interest high for a…

  • November CPI at 7.1%, Nasdaq up 1.01% but Tesla down -4.09%.

    The US Bureau of Labor Statistics reported November Consumer Price Index (CPI) increased 7.1% over the last 12 months. This shows inflation is slowing and may have peaked and is improving compared to October. The previous month the inflation rate was 7.7%. Compared to last month, some items actually saw a decline in price. Energy…

  • November 2022 jobs report showed 263,000 new jobs and 3.7% unemployment

    The Bureau of Labor Statistics reported the US economy increased jobs by 263,000 and unemployment is stable at 3.7% December 2 2022. Most of the increases come from leisure and hospitality, health care, and government. Retail, transportation, warehousing employment were down. Unemployment remained low at 3.7% or 6.0 million people. Stocks are down on the…

  • Key takeaways from Fed Chairman Jerome Powell’s speech “Inflation and the Labor Market” on 11/30/2022

    Fed Chairman Jerome Powell delivered a speech on 11/30/2022. Markets reacted favorably to this comments. Nasdaq index was up 4.4% and closed at 11468. Tesla finished strong, up 7.67% to close at 194.7 on elevated volume of 109,186,400 shares. Here are the key takeaways from that speech. Key take away is he sees inflation correcting…

  • Stocks reacted positively to new October 2022 consumer price index (CPI) up 7.7%

    The Labor Department on Thursday 11/10/2022 released the consumer-price index (CPI) for October and it’s up 7.7% from a year ago. This compares to 8.2% for September and signals inflation may have peaked and is now trending down. CPI includes goods and services consumer consume. The core CPI excludes energy and food which are volatile…

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