Sharkey, Howes & Javer

Inside the Economy: The FED & Consumer is King

This week on “Inside the Economy”, we discuss the FED and the consumer. With the upcoming FED meeting this week, we are seeing the market has already reacted to the potential of raising of rates in the somewhat near future. But with the yield curve already flattening and mortgage rates rising, what do we anticipate from the FED over the next 12 months? The consumer is still King as we see consumer spending continuing to rise into the holidays, delinquency rates in single family homes moving down, home sales increasing, and unemployment numbers getting back to pre-covid levels. Tune in to learn about all this and more!

Key Takeaways:

• Projected US GDP comes in at 2.0 YOY for the 3rd Quarter 2021
• Wages and salaries continue to increase at a steady pace
• Crude Oil up to $83 due to tight supply
• S&P 500 companies with record high profitability

Inside the Economy: The Individual Consumer & Continued Recovery

This week on “Inside the Economy”, we discuss the individual consumer and the ongoing recovery. We are continuing to see personal income rise, along with disposable income going to debt payments at all-time lows. Will this continue as we head into the winter months and 2022? We are seeing the fastest recovery in permanent job losses when compared to the last 2 recessions, continued housing price growth, and solid YTD returns in the equity markets. Why are there so many “We are Hiring” signs still on every block? Tune in to learn about all this and more!

Key Takeaways:

• US GDP comes in at 6.7 YOY for the 2nd Quarter 2021
• Crude Oil prices hit $80
• Unemployment numbers continue to come down

Inside the Economy: Holiday Spending & Economic Updates

This week on “Inside the Economy”, we gear up to follow and monitor holiday sales. Will this be a record year for sales? The stock market has seen some recent volatility due to a variety of headlines including corporate earnings revisions. Is this pull back healthy for the stock market long term? What is the annual wage of Chinese factory workers and what is the significance? Tune in to learn about all this and more!

 

Key Takeaways:

• 30 year mortgages rise to around 3%
• Household cash and cash-equivalents continue to climb
• Grain prices begin to pull back

Inside the Economy: Inflation & Recovery

This week on “Inside the Economy”, we discuss Inflation and the continued economic recovery. With inflation on everyone’s mind, we discuss where it sits currently, why it’s hanging around 3.6, and what makes us think those levels won’t be here to stay. In regards to the continued economic recovery, we are seeing continued strength in equity markets, increasing rent prices in both apartment and single-family homes, and jobless claims continuing to decrease. Tune in to learn about all this and more!

 

Key Takeaways:

• The yield curve flattens a touch over the past week
• Crude Oil prices stay above 70
• Steady increases in both Employee Compensation and Gov’t Social Benefits

Inside the Economy: Inflation Trends

This week on “Inside the Economy”, we continue to analyze inflation. What are some of the key inflation indicators like money supply and the velocity of money telling us? In other topics, corporate revenues continue to climb. What does this mean for the equity markets? With so many people behind on rent, what will happen to the debt? Tune in to learn about all this and more!

 

Key Takeaways:

• 30 year mortgages stay steady just below 3%
• Texas is by far the biggest oil producer in the U.S. 
• Chinese stocks are at a 2005 low relative to U.S. Stocks

Inside the Economy: Recovery & Consumer Behavior

This week on “Inside the Economy”, we discuss the global recovery and consumer behavior. We are seeing the global economy get back on track with a rise in corporate profits, continued low unemployment numbers, and State Revenues recovering to pre-Covid levels. With the Delta Variant becoming more prevalent across the globe, will we see this pattern continue through the end of the year? Consumer behavior is also beginning to turn up as we see increased spending volumes, low average loan balances, and core inflation remaining elevated in the short term. Be sure to tune in to learn about all this and more!

Key Takeaways:

• 2nd Quarter GDP comes in around 6.5%
• Gas and oil markets begin to stabilize
• Inventories remain at all-time lows due to supply issues
• Corporate profit margins continue to recover

Inside the Economy: Housing & Spending

This week on “Inside the Economy”, we take a closer look at recent consumer spending trends. Spending has started to stabilize. What are consumers doing with their money? In other news, forbearance and eviction protection is coming to an end this week. Will it be extended? All eyes continue to be on the Federal Reserve. What will their next actions be? Tune in to learn about all this and more!

Key Takeaways:

• 30 year mortgages continue to drop
• The 2020 recession was shortest on record
• Drought in the western states continue to pose problems

Inside the Economy: Inflation & Job Outlook

This week on “Inside the Economy”, we discuss inflation and the jobs outlook. Core inflation has continued to rise, reaching about 3.4% YOY. Spending has remained muted, savings rates are at all-time highs, food and gas prices have risen, but with the Federal Reserve’s target still at 2%, where will inflation be at the end of the year? Job growth is rebounding faster than any other recession Post WWII, but when will we see full employment? Tune in to learn about all this and more!

Key Takeaways:

• Personal savings rates continue to sit at all-time highs
• Medium home prices remain high with low market supply
• Low yields continue in investment-grade corporate bonds

2021 1st Quarter GDP estimate comes in at 6.4%

This week on “Inside the Economy”, we discuss inflation and the jobs outlook. Core inflation has continued to rise, reaching about 3.4% YOY. Spending has remained muted, savings rates are at all-time highs, food and gas prices have risen, but with the Federal Reserve’s target still at 2%, where will inflation be at the end of the year? Job growth is rebounding faster than any other recession Post WWII, but when will we see full employment? Tune in to learn about all this and more!

Key Takeaways:

• Personal savings rates continue to sit at all-time highs
• Medium home prices remain high with low market supply
• Low yields continue in investment-grade corporate bonds

2021 1st Quarter GDP estimate comes in at 6.4%

Inside the Economy: Is Inflation Transitory or Here to Stay?

This week on “Inside the Economy”, we take a deeper look at inflation. With core inflation rising to 3.8%, is this price inflation in the market a long-term trend or transitory? Unemployment numbers continue to shrink as unemployment benefits lessen and folks get back to work. U.S. imports begin to increase again as demand for cars and other goods skyrocket. TSA Checkpoint travel numbers have drastically increased, showing that Americans are ready for a summer vacation. There is a major drought out West, which states and industries have been affected the most? Tune in to hear about all this and more! 

Key Takeaways:

• Unemployment numbers have dropped to 5.8% as unemployment benefits decrease
• Corporate pensions are almost 100% funded, the first time since 2008
• The U.S. Stock market continues to climb, showing drastic improvements since June 2020
• TSA Traveler Throughput breached 2 million travelers in one day last week, the first time since March 2020
• Arizona manufacturing, California farmland and the almond industry may have a difficult 2021 due to a Western drought

Inside the Economy: Inflation Outlook and Spending

This week on “Inside the Economy”, we will address inflation and consumer spending. Core inflation year over year jumped in April. The Federal Reserve’s target is still 2%, where will it be at the end of the year? Spending is back to where it was, however, most consumers are still sitting on a lot of cash. Will this keep inflation at bay? Tune in to learn about all this and more!

Key Takeaways:

• Oil is little changed despite the cybersecurity issue on east coast
• 30 year mortgages continue to steady
• Hourly wages pick up as service industry reopens
• The U.S. dollar is still the world reserve currency, by a lot