Guild’s Basic Needs Index

The First Pillars of Civilization: Hot Water and Affordable Food

Inflation Bites Another month, another sky-high CPI print: at 9.1%, the highest year-over-year inflation since 1981.  Of course, the methodology of constructing this index has changed over the decades; if the methodology employed in 1990 were used today, the reported rate would be 17.3%, according to ShadowStats.  Even this is

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Markets This Week — 16 June 2022

As we write, the U.S. stock market is undoing the momentary relief that followed yesterday’s hawkish Fed announcement.  The proximate cause was perhaps the overnight announcement that the Swiss National Bank would consider selling down its $177 billion worth of U.S. equity holdings as it defends the Swiss franc.  Perhaps

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The Bear Case

Last month we told you that it was “time for a bear market playbook.”  We noted that even though there are many extraordinary geopolitical, economic, and financial events unfolding in the world, the central fact was simpler.  The Fed is tightening financial conditions, raising rates and draining liquidity by allowing

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Jobs & Robots

Yesterday, Wednesday, June 1, saw the publication of April JOLTS data – “job openings and labor turnover” — by the Bureau of Labor Statistics.  This report is one of the key data sources evaluated by the Fed as it monitors the U.S. employment situation; remember that its dual mandate is

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Markets This Week — 2 June 2022

Of course, all eyes are on the Fed, inflation, and employment, so much of what we wrote above fills out our general view of where markets are and what is most important to pay attention to. We’ve commented many times in the past about the rise of ESG investing —

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Market Desperately Seeking Reason To Bounce

First, let’s touch on the inflation level revealed by the Guild Basic Needs Index [GBNI] — our in-house, real-world inflation measure which we compile from a simple set of data series covering consumer expenses for food, shelter, clothing, and transportation.  We had to adjust the x-axis on our graph: year-on-year,

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Investor Sentiment Plumbs the Depths

In this second quarter of 2022, individual investors’ sentiment hit levels not seen since 2009.  History suggests that periods with historically low investor sentiment (1) usually precede a large tradeable rally, and (2) can create an attractive entry opportunity for longer-term investors.  Market tops do not announce themselves beforehand, or even

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Inflation, Interest Rates, Currencies, and the Fed’s Blink

At the end of March, we noted about the dollar:  “In [the context] of a very likely European recession, regardless of the cessation of hostilities in Ukraine, we would expect the U.S. dollar to stage a stronger rally, particularly against the euro.  Why isn’t it?  And perhaps a question equally

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Markets This Week — 28 April 2022

As earnings season unfolds, we are hearing many company managements mentioning foreign exchange issues as headwinds — when you hear “currency neutral” numbers being reported, it is likely that under the hood, there are negative foreign-exchange effects to be found.  A strong dollar will hurt many companies which are reliant

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Food Markets Signaling: Red Alert

Last week, we wrote that commodity markets were signaling that “This Is Not a Drill,” and discussed events driving energy and industrial and precious metals.  We deliberately didn’t discuss soft commodities — i.e., foods.  Below are some thoughts about foods, food inflation, fertilizers, the potential consequences for food and beverage

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Markets This Week — 21 April 2022

What is Happening In China?  Shanghai, and many other Chinese cities, are once again under extreme covid lockdown conditions — the most stringent since April 2020, as China pursues its apparent “zero covid” policy.  The images and videos percolating through to western social media are profoundly disturbing, and prompt a

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Commodity Markets Signaling: This Is Not A Drill (Although Drilling Might Help)

Agustin Carstens, the General Manager of the Bank of International Settlements (BIS), spoke in Geneva a week ago — offering some soul-searching reflection on how the world’s financial authorities got the inflation story so terribly wrong.  (The Bank of International Settlements is essentially “the central bank of central banks.”)  We

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