On the Radar is a biweekly publication providing quick and concise answers to the topical investment and economic questions that are on investors' minds.
New questions in this issue:
What is the latest on Brexit?
Prime Minister Boris Johnson is facing a major parliamentary showdown with opposition forces, as well as rebellion from his own party, over his bid to take the UK out of the European Union, with or without a deal, by October 31's fast approaching deadline...
What are the ISM numbers telling us?
It is a tale of two cities. The manufacturing sector is in contraction mode, and the service sector is improving...
What do you expect from the Fed policy meeting on September 18th?
We expect the Federal Open Market Committee to cut the federal funds rate by 25 basis points to the median level of 1.875%. This will mark the Fed's second rate cut following nine hikes over the past three-and-a-half years...
Are equity valuations a concern?
Equity valuations, although still reasonable in the context of today's low interest rates, are beginning to look high from a historical perspective and do require close attention. High valuations are associated with lower long-term returns and provide a higher perch from which to fall in the next downturn...
Is the labor market slowing?
It is, to some extent. There was slowdown in the monthly gains in nonfarm payrolls, with the rolling 12-month average peaking this past January (chart). But it is hard to make a true comparison. About a month ago, the Bureau of Labor Statistics said they plan to revise down past data. The 2018 drop will be about 40,000 per month. With that adjustment, hiring has slowed but not as abruptly as the current published figures indicate...
What is City National Rochdale's investment outlook?
Given our continued positive assessment of the fundamental backdrop, we remain positive on equities in general and continue to see attractive prospects in the opportunistic fixed income class...
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