June, 2024

article thumbnail

Seattle Redux: Misunderstanding Seasonal Adjustments

The Big Picture

@TBPInvictus here. About a decade or so ago, the city of Seattle undertook to raise its minimum wage, over time, to $15/hour. (Massive credit to my friend Nick Hanauer for his efforts to make that happen.) What followed in the immediate aftermath of both the announcement and implementation was nothing less than a apocalyptic, collective head explosion on the right about the devastating effects the increase would have, particularly in the food services sector: However, there’s little doubt that t

Food 335
article thumbnail

Top clicks this week on Abnormal Returns

Abnormal Returns

Also on the site Father time is undefeated: on the impact of cognitive decline on financial outcomes. (abnormalreturns.com) Top clicks this week The S&P 500 is getting three new members. (reuters.com) We are in a 'bear market for diversification.' (thinkadvisor.com) The stock market is increasingly concentrated. Should you be worried? (theirrelevantinvestor.com) More investors are facing up to the problem with illiquid alternatives.

Taxes 283
Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

Market Commentary: The Summer Rally Continues Amid Strong Job Gains

Carson Wealth

The Summer Rally Continues Another week and more new highs for the S&P 500. As we’ve noted before, summer rallies are actually quite normal in an election year and we didn’t think this year would be any different. In fact, the three summer months are up more than seven percent on average in an election year and higher more than 75% of the time, the best out of any three-month period.

Marketing 143
article thumbnail

Private Equity May Not Be the Diversifier We Think (Due to Volatility Laundering), But Private Credit Could Be

Alpha Architect

Volatility laundering causes the risk-adjusted returns and the diversification benefits of private equity to be significantly overstated. However, the problem of volatility laundering is not a problem for all private investments, specifically not for high-quality, floating rate, private credit. Private Equity May Not Be the Diversifier We Think (Due to Volatility Laundering), But Private Credit Could Be was originally published at Alpha Architect.

article thumbnail

Confronting the Change Challenge

Change is difficult, whether in our private or work life. However, without change, growth and learning are difficult not to mention keeping up with the market and staying competitive. We have all worked for or ourselves are the bosses that prefer to keep the status quo. We will discuss how to address the "change challenge" to enable you to be a changemaker and a graceful recipient of change.

article thumbnail

BLS: Job Openings Decreased to 8.1 million in April

Calculated Risk

From the BLS: Job Openings and Labor Turnover Summary The number of job openings changed little at 8.1 million on the last business day of April , the U.S. Bureau of Labor Statistics reported today. Over the month, both the number of hires and total separations were little changed at 5.6 million and 5.4 million, respectively. Within separations, quits (3.5 million) and layoffs and discharges (1.5 million) changed little. emphasis added The following graph shows job openings (black line), hires (

Numbers 132

More Trending

article thumbnail

Inflation is Obvious But Wage Gains Seem Invisible

The Big Picture

I’ve been observing how radically unusual various sentiment readings have been for a few years now. It made little sense to me that the post-pandemic era saw sentiment levels far below major dislocations such as the ‘87 crash, the 9/11 terrorist attacks, the Dotcom implosion, or the 08-09 great financial crisis. We have tried to identify the causal factors by considering social media , increases in partisanship , ignorance, even trolling of pollsters.

Economics 318
article thumbnail

Sunday links: asymmetric returns

Abnormal Returns

Strategy Mean reversion happens in the stock market. Good luck trying to time it. (awealthofcommonsense.com) Successful investing requires getting your time horizon correct. (disciplinefunds.com) Always check the ticker. (scheplick.com) Business The degenerate economy is booming. (howardlindzon.com) How veterinary medicine became a big business. (nytimes.com) The defense sector can't hire workers fast enough.

Medicine 278
article thumbnail

If I Only Had 12 Months to Live

Advisor Perspectives

I have long admired Jonathan Clements. His columns in The Wall Street Journal introduced me to index-based investing. I was deeply saddened to read his column in HumbleDollar, dated June 15, 2024, that, at age 61, he has been diagnosed with lung cancer that has metastasized to his brain and “a few other spots.

article thumbnail

Complexity is a virtue in return prediction

Alpha Architect

Simple models severely understate return predictability compared to “complex” models in which the number of parameters exceeds the number of observations. Complexity is a virtue in return prediction was originally published at Alpha Architect. Please read the Alpha Architect disclosures at your convenience.

Numbers 115
article thumbnail

4 Things Great Companies Do to Improve Cash Flow

Speaker: Don Gallianza, Credit Manager at Chevron Phillips Chemical and Indy Chakrabarti, Chief Marketing Officer at HighRadius

4 Case Studies to Optimize DSO 26 Days Sales Outstanding. Already better than most. But, should you improve on that? Why would 3 fewer days even matter? It matters because it fundamentally transforms business outcomes. Join this webinar to explore 4 things companies do to reclaim hard dollars - not just soft costs - and go from good to great! What You'll Learn 6 operational KPIs every AR manager should track: Define and track these metrics to enhance performance, drive efficiency, and make infor

article thumbnail

AIA: Architecture Billings Declined in May; Multi-family Billings Decline for 22nd Consecutive Month

Calculated Risk

Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment. From the AIA: ABI May 2024: Business conditions at architecture firms continue to soften The AIA/Deltek Architecture Billings Index (ABI) score declined to 42.4 for the month , as more firms reported a decrease in billings in May than in April. In addition, there is increasing softness in the pipeline of new work coming into firms.

Clients 128
article thumbnail

The Minsky Market

A Wealth of Common Sense

Through the end of May, the S&P 500 has experienced 24 new all-time highs this year alone. Volatility has been relatively low for some time now. We haven’t had a 2% down day on the S&P 500 in well over 300 trading days: That’s fast approaching the longest streak without a nasty down day over the past 10 years. The S&P 500 is up around 11% for the year on a total return basis.

Marketing 133
article thumbnail

Market Concentration

The Big Picture

A quick break from book authorship to share a fascinating set of data and charts, via Sam Ro. In his weekly missive, Sam points to some amazing charts from Global Financial Data. They are based on historical data that looks at 200 Years of Market Concentration. You might be surprised at the findings. As the chart above shows, there are long periods of market concentration.

Marketing 312
article thumbnail

Tuesday links: permission and trust

Abnormal Returns

Markets Market breadth is not great. (sherwood.news) The Magnificent Seven also stand out for their stock buybacks. (visualcapitalist.com) Alternatives The Bogle Effect has not come for alternative asset classes. (ofdollarsanddata.com) Pension funds could skip on the alternatives and just invest in low-cost index investments. (crr.bc.edu) Strategy The many ways in which investing is NOT like poker.

article thumbnail

Pricing for Profit: How to Set, Negotiate, and Succeed

Speaker: Igli Laci, Strategic Finance Leader

In today’s competitive market, pricing is more than just a number — it’s the cornerstone of profitability. The right pricing strategy ensures that you capture the true value of your offering, paving the way for sustainable growth and long-term success. Join Igli Laci, Strategic Finance Leader, in this exclusive session where he will explore how a well-crafted pricing approach balances customer perception with business objectives, creating a powerful tool for securing both competitive advantage a

article thumbnail

CB Leading Economic Index: Falls Again in May.But No Recession Signal

Advisor Perspectives

The Conference Board Leading Economic Index (LEI) decreased in May to its lowest level since April 2020. The index fell 0.5% from the previous month to 101.2. While the index does signal softer economic conditions lay ahead, the LEI is currently not signaling a recession.

Economics 126
article thumbnail

U.S. Companies Have Outperformed Japanese Companies, or Have They?

Alpha Architect

While both the S&P 500 and the Nikkei indices have recently hit all-time highs, the valuation and balance sheet data we have reviewed indicate that the downside risks in Japanese stocks appear to be far less than the risks in U.S. stocks. Evidence such as this helps explain why legendary investor Warren Buffett has been buying Japanese stocks. U.S.

Valuation 114
article thumbnail

Comments on May Employment Report

Calculated Risk

The headline jobs number in the May employment report was well above expectations, however March and April payrolls were revised down by 15,000 combined. The participation rate and employment population ratio decreased, and the unemployment rate increased to 4.0%. Construction employment increased 21 thousand and is now 613 thousand above the pre-pandemic level.

Numbers 127
article thumbnail

Fixed Income Has Income Again

A Wealth of Common Sense

The bad news about the historic bond bear market is that fixed income investors were forced to deal with large losses in certain areas of the bond market. The good news is the rising rates that caused the bear market in bonds mean yields are in a much better place than they’ve been for the past 10-15 years. Fixed income has income again. In fact, investors in search of yield have all sorts of options — T-bill.

Marketing 128
article thumbnail

2024 Lending Outlook: Innovations and Evolutions in the Financial Sector

As we step into 2024, the lending landscape evolves rapidly with technology, regulations, and market dynamics driving change. For banks and financial institutions to stay competitive and meet the evolving needs of their customers, these drivers must be understood and engaged with. Lenders can anticipate significant transformation fueled by technological advancements, regulatory shifts, and changing consumer behaviors.

article thumbnail

Debunking QSR Minimum Wage BS: A Follow Up

The Big Picture

@TBPInvictus here A few days ago, Barry and I detailed how unscrupulous bad actors had taken Not Seasonally Adjusted data to falsely claim that California’s new $20/hour minimum wage had cost the state almost 10,000 quick-serve restaurant (QSR) jobs. I wrote: It appears to me that the Journal got that number from BLS. However, BLS only offers the series without seasonal adjustment; this makes a very meaningful difference.

Food 300
article thumbnail

Research links: training and testing

Abnormal Returns

Alternatives Pension plans could generate equivalent returns with low-cost, index investments. (crr.bc.edu) Equity funds with VC investments don't outperform. (papers.ssrn.com) Just how big is the carried interest loophole. (papers.ssrn.com) 52 week highs Liquidity picks up at 52-week highs. (papers.ssrn.com) Do corporate bonds take note of 52-week stock highs?

Retail 257
article thumbnail

For Growing RIAs, Single-Role CRMs Don’t Make the Cut

Advisor Perspectives

What I see emerging, though, is the idea that the CRM isn’t a single pane of glass to view the entire business. Effective CRMs are more like prisms, where the viewer’s role determines what they see, and what information leaps to their fingertips.

118
118
article thumbnail

When Shorts Don’t Short

Alpha Architect

Low short positions come from positive public news, while negative news can drive average short or extremely high short positions When Shorts Don’t Short was originally published at Alpha Architect. Please read the Alpha Architect disclosures at your convenience.

Investing 117
article thumbnail

Banking on Loyalty: Holistic Financial Advice for Unparalleled Business Growth

Speaker: Joe Buhrmann, MBA, CFP®, CLU®, ChFC® Senior Financial Planning Practice Management Consultant eMoney Advisor

During an era of evolving consumer preferences, the banking sector is undergoing a profound shift. As customers continue to broaden their perspectives, banking professionals must support their customers' financial wellness by providing holistic financial advice that aligns with individual goals and circumstances. Without adapting, financial institutions will find that loyalty may crumble amid uncertainty.

article thumbnail

NAR: Pending Home Sales Decrease 2.1% in May; Down 6.6% Year-over-year

Calculated Risk

From the NAR: Pending Home Sales Dropped 2.1% in May Pending home sales in May slipped 2.1% , according to the National Association of REALTORS®. The Midwest and South posted monthly losses in transactions while the Northeast and West recorded gains. Year-over-year, all U.S. regions registered reductions. The Pending Home Sales Index (PHSI)* – a forward-looking indicator of home sales based on contract signings – decreased to 70.8 in May.

Sales 121
article thumbnail

America’s Piggie Banks Are Full

A Wealth of Common Sense

The pandemic housing boom means Americans have more home equity than ever. Households have added roughly $12 trillion in home equity since the end of 2019: To put this number in context, there was only ~$6 trillion in home equity following the bursting of the housing bubble following the Great Financial Crisis. Out of the $32 trillion in total equity, let’s say half of it is tappable (meaning homeowners can cash it.

Banking 126
article thumbnail

BNY Pershing Lays Off Business Consulting Group, Product Staff

Wealth Management

Sources close to the company say the clearing and custody firm has let go of its business consulting group and half a dozen people in its product group, just a week after its annual INSITE conference.

article thumbnail

Personal finance links: absolute value

Abnormal Returns

Podcasts Barry Ritholtz talks with Peter Mallouk about better managing your financial affairs. (ritholtz.com) Dan Haylett talks with Stephanie McCullough, founder of Sophia Financial, about the challenges facing women planning for retirement. (humansvsretirement.com) Jonathan Clements and Peter Mallouk talk about the challenges of raising money savvy children.

article thumbnail

Navigating Financial Storms: Strategies for Building Resilient Balance Sheets

Speaker: Carolina Aponte - Owner and CEO, Caja Holdings LLC

In today's rapidly changing business environment, building a resilient balance sheet is crucial to the survival of any business. A resilient balance sheet allows a company to withstand financial shocks and adapt to changing market conditions. To achieve this, companies need to focus on key strategies such as maintaining adequate liquidity, managing debt levels, diversifying revenue streams, and prioritizing profitability over growth.

article thumbnail

The Big Four Recession Indicators

Advisor Perspectives

Official recession calls are the responsibility of the NBER Business Cycle Dating Committee, which is understandably vague about the specific indicators on which they base their decisions. There is, however, a general belief that there are four big indicators that the committee weighs heavily in their cycle identification process.

119
119
article thumbnail

A (Sub)penny For Your Thoughts

Alpha Architect

This paper explores the effectiveness of the BJZZ algorithm, developed by Boehmer, Jones, Zhang, and Zhang (2021), in identifying and signing retail trades executed off exchanges with subpenny price improvements. A (Sub)penny For Your Thoughts was originally published at Alpha Architect. Please read the Alpha Architect disclosures at your convenience.

Retail 105
article thumbnail

MBA: Mortgage Applications Increased in Weekly Survey

Calculated Risk

From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey Mortgage applications increased 0.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending June 14, 2024. The Market Composite Index, a measure of mortgage loan application volume, increased 0.9 percent on a seasonally adjusted basis from one week earlier.

Sales 121