Financial and Economic Brief - December 12, 2017

by © Liberty Publishing, Inc.

Powell’s Early Policy Views

Incoming Federal Reserve chair Jerome Powell, appears set to let the tax cut “run its course” through the economy as weak growth in wages and inflation promote his view that the economy remains “underpowered”. Powell sees little risk of inflation that would provoke the Fed to raise rates faster than expected, and takes the weakness in wage growth as a sign that sidelined workers remain to be drawn into jobs. With a background as an investment banker rather than as an economist, Powell will lead “a more data-driven Fed, which at the current juncture means a more dovish Fed…,” said Robin Brooks, chief economist at the Institute of International Finance.
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November Jobs Report Strong

According to the November jobs report released on Friday, employers added 228,000 jobs in November and the unemployment rate remained at 4.1%. The report also showed that weekly paychecks increased by 3.1% over the last 12-months, the first time that reading has risen above 3% in almost seven years. Average hourly pay increased 2.5%, which is disappointing, especially in light of the unemployment rate being low. The White House celebrated the report and credited its economic policies for the numbers. In other good news, the economy grew 3.3% in the 3rd quarter, the best since 2014, and the stock market is at record levels.
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Launch of Bitcoin Futures

Derivatives exchange Cboe Global Markets launched its bitcoin futures late yesterday, marking the first time investors could get access to the market via a mainstream regulated exchange. Financial markets expect the cryptocurrency to climb higher but at a much slower rate than in recent weeks as warnings of a bubble grew. The one-month bitcoin contract opened at $15,460, dipped briefly before rising to a high of $18,700 and then slipping again. The futures pricing suggests investors believe that the price increases seen in recent months could be set to slow down. Most fund managers at larger asset managers and institutional investors say bitcoin remains “too volatile and lacks the fundamentals” that give other assets value.
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News

Financial and Economic Brief - January 16, 2018

• Strong Holiday Sales - According to the National Retail Federation, holiday sales rose 5.5% compared to last year, marking the largest jump since the end of the Great Recession.

• Wells Fargo Shares Lower - Shares of Wells Fargo fell after reporting a mixed performance for Q4 2017. They reported revenue of $22.05 billion, which was below the $22.64 billion forecast of financial analysts.

• Consumer Prices Increase - U.S. consumer prices recorded their largest increase in 11 months in December at 0.3%, on gains in the cost of rental accommodations and healthcare.

Financial and Economic Brief - January 9, 2018

• Service Sector Growth Slows - Growth in non-manufacturing economic activity continued to fall in December, after dropping more than expected in November.

• GoPro Cutting 20% of Staff - GoPro is shutting down its drone business and cutting 20% of its staff after “weak demand” for its products.

• S&P, Dow Trade Lower on Monday - The S&P 500 and the Dow were trading lower on Monday, as losses in healthcare and financial stocks hindered Wall Street’s strongest start to a year in a decade.

Financial and Economic Brief - January 3, 2018

• Small Business Hiring Slows - The Small Business Jobs Index closed 2017 at 99.70 after falling 0.16% in December and 0.78% for the year.

• Oil above $60 a Barrel - U.S. crude oil prices rose 1% Friday to more than $60 a barrel, the highest close since June of 2015.

• First Trading Day, Indexes Higher - Wall Street’s main indexes were higher today, the first trading day of the year, lifted by gains in technology and consumer discretionary stocks.

Financial and Economic Brief - December 19, 2017

• Industrial Production Rises - U.S. industrial production rose 0.2% in November due to a rebound in extracting oil and natural gas after a stoppage during hurricane season.

• Campbell Acquires Snyder’s - Campbell Soups is set to acquire Snyder’s-Lance in a $4.9 billion deal. The deal will almost double Campbell Soup's baked-snacks revenue.

• U.S. Stock Indexes Hit Record Highs - The major U.S. stock indexes hit record highs on Monday, as the tax bill looked set to be passed into law with its $11 billion in corporate deal making. The tax bill, aims to lower corporate taxes to 21% from 35%.

Financial and Economic Brief - December 12, 2017

• Powell’s Early Policy Views - Jerome Powell appears set to let the tax cut “run its course” through the economy as weak growth in wages and inflation promote his view that the economy remains “underpowered”.

• November Jobs Report Strong - According to the November jobs report released on Friday, employers added 228,000 jobs in November and the unemployment rate remained at 4.1%.

• Launch of Bitcoin Futures - Derivatives exchange Cboe Global Markets launched its bitcoin futures late yesterday, marking the first time investors could get access to the market via a mainstream regulated exchange.

Financial and Economic Brief - December 5, 2017

• Mixed Numbers for Automakers - Major automakers posted mixed U.S. November new vehicle sales on Friday and predicted a competitive December as they rushed to sell vehicles and lift their 2017 numbers.

• CVS to Buy Aetna - CVS Health is buying Aetna for $69 billion in cash and stock in a deal that “reflects a rapidly shifting health care landscape”.

• Upcoming Fed Rate Hikes - The U.S. Federal Reserve is “almost certain” to raise interest rates later in December, a majority of whom also now expect three more rate rises in 2018.