In Portfolioticker today
Today at the stock market
“World equity markets surged anew on Thursday as investors shrugged off the latest sign of rising U.S. inflation, while strong global growth weighed on the USD (DXY) and pushed it to a 15-month low against the JPY.
Economic data, monetary policy implications, yields, FX
U.S. producer prices accelerated in January, according to a Labor Department report that offered further evidence of growing inflation pressures in the world’s largest economy. The report came on the heels of data on Wednesday showing a broad increase in U.S. consumer prices last month.
Faster inflation, which reduces the return of fixed income, spooked the bond market and had sparked a selloff in equities on Wednesday. But stocks later rallied on the notion that strong economic growth can offset moderate inflation.
Leo Grohowski, chief investment officer at BNY Mellon Wealth Management in New York, said he was encouraged by the reaction to the inflation data.
“There were a lot eyes fixating on the PPI number this morning, it came in a little hot. But much like yesterday, the market’s shaking it off,” Grohowski said.
Rising interest rates need not be a worry as long as the economy is growing and the fundamental outlook does not change, Grohowski said.
“The market’s growing increasingly comfortable that maybe 3% on a 10-year Treasury note is OK,” he said.
The benchmark 10-year U.S. Treasury note rose 1/32 in price to push yields down to 2.9077%. Earlier in the session yields had shot up to 2.944%.
The equities selloff 2 weeks ago after an initial sign of an uptick in inflation had overshadowed earnings that are so strong estimates may need to be revised upward, he said.
“We’re taking our earnings estimates and looking at them and saying we just increased them 6 weeks ago, but you know what? They’re feeling pretty conservative to us,” Grohowski said.
The gap between German and U.S. 10-year borrowing costs reached its widest since Apr 2017 after the higher-than-expected U.S. inflation data triggered a sharp selloff in U.S. Treasuries earlier in the day. While investors also shed European government bonds after Wednesday’s inflation data, political risks kept a cap on yields.
German 10-year government bond yields were a basis point higher at 0.76%.
The USD fell across the board
- Bloomberg’s DXY index fell 0.57%, with the EUR up 0.39% to USD 1.2497.
- Japan’s JPY rose 0.87% to 106.10 per USD.
“Forex markets rotate from theme to theme all the time. The theme right now is global growth and strong global growth has historically pushed the USD lower,” said Greg Anderson, global head of FX strategy at BMO Capital Markets in New York.
On Wall Street Apple Inc rose after Warren Buffett’s Berkshire Hathaway disclosed in a regulatory filing that the iPhone maker is now its top common stock investment.
Network gear maker Cisco Systems Inc was among other technology stocks that rose, after its strong quarterly results and upbeat forecast.
Earnings Reporting Season
Of the 383 companies in the benchmark S&P 500 index that have reported fourth-quarter earnings, 76.5% have beat analysts’ expectations, according to Thomson Reuters I/B/E/S.
An index of world stock markets advanced more than 1% and major European indexes also rose, bolstered by strong results from Airbus SE, the region’s largest aerospace firm.
MSCI’s all-country world index closed up 1.22% in a fifth straight session of gains while the FTSEurofirst 300 index of leading shares in Europe gained 0.44% to close at 1475.50.” Reuters
^ Market indices today (mouseover for 12 month view) Chart: Google Finance
|Index||Ticker||Today||Change||31 Dec 17||YTD|
|S&P 500||SPX (INX)||2,731.20||+1.20%||2,238.83||+2.15%|
^ USD and AUD denominated indices over the past 52 weeks Chart: Bunting
|Index||Currency||Today||Change||31 Dec 17||YTD|
Portfolio stock prices
Amazon closed on a record high of $1,461.76, up 0.74% on yesterday’s record $1,451.05. Amazon’s founder Jeff Bezos extended his lead as the world’s richest person, now worth $121 billion. #2 Bill Gates is worth $92.0 billion, #3 Warren Buffett $87.6 billion, #4 Mark Zuckerberg $73.0 billion. Some other names include: #16 Jack Ma $47.2 billion, #42 Elon Musk $21.0 billion, and then there’s US President Donald Trump $2.86 billion.
|Stock||Ticker||Today||Change||31 Dec 17||YTD|
^ Bloomberg Dollar Spot Index (DXY) movements today (mouseover for 12 month view) Chart: Bloomberg
“The Bloomberg Dollar Spot Index (DXY) fell 0.5% to a 3-year low.
The EUR rose 0.4% to USD 1.2502, reaching the strongest in 2 weeks.
Japan’s JPY rose 0.9% to 106.11 per USD.
The yield on 10-year Treasuries was little changed at 2.9%, near the highest in more than 4 years.
Australia’s 10-year yield was steady at 2.92%.” Bloomberg
^ AUD movements against the USD today (mouseover for 12 month view) Chart: xe.com
Oil and Gas Futures
Prices are as at 15:49 ET
- NYMEX West Texas Intermediate (WTI): $61.60/barrel +1.65% Chart
- ICE (London) Brent North Sea Crude: $64.54/barrel +0.28% Chart
- NYMEX Natural gas futures: $2.59/MMBTU -0.08% Chart
AU: Labour Force. Jan 2018
Press Release Extract [au_jobs]
Australia’s trend estimate of employment increased by 23,000 persons in January 2018, with:
- the number of unemployed persons increasing by 2,600 persons;
- the unemployment rate remained steady at 5.5 per cent;
- the participation rate increased by 0.1 percentage points to 65.6 per cent; and
- the employment to population ratio remained steady at 62.0 per cent.
Over the past year, trend employment increased by 394,900 persons (or 3.3 per cent), which is above the average annual growth rate over the past 20 years of 1.9 per cent. Over the same 12 month period the trend employment to population ratio, which is a measure of how employed the population (aged 15 years and over) is, increased by 1.0 percentage points to 62.0 per cent.
In monthly terms, trend employment increased by 23,000 persons between December 2017 and January 2018. This represents an increase of 0.19 per cent, which is above the average monthly growth rate over the past 20 years of 0.16 per cent.
Trend full-time employment increased by 8,800 persons between December 2017 and January 2018, and part-time employment increased by 14,200 persons. Compared to a year ago, there are 292,100 more persons employed full-time and 102,800 more persons employed part time. The part-time share of employment decreased 0.2 percentage points over the past 12 months, from 31.9 per cent to 31.7 per cent.
The trend estimate of monthly hours worked in all jobs decreased by 1.2 million hours (or 0.07 per cent) between December 2017 and January 2018, to 1,727.0 million hours. Monthly hours worked increased by 2.7 per cent over the past year, slightly below the increase in employed persons (3.3 per cent). As a result, the average hours worked per employed person decreased slightly to 138.8 hours per month, or around 32.0 hours per week.
The trend unemployment rate remained at 5.5 per cent for the seventh consecutive month, after the December 2017 number was revised up to 5.5 per cent. The number of unemployed persons increased by 2,600 persons to 720,200 persons.
The trend participation rate increased by 0.1 percentage points to 65.6 per cent between December 2017 and January 2018, the highest rate since February 2011. The male participation rate remained at 70.9 per cent whilst the female participation rate increased to a further historical high of 60.5 per cent.
The labour force includes the total number of employed and unemployed persons. Over the past year, the labour force has increased by 376,900 persons (2.9 per cent). This rate of increase was above the rate of increase for the total Civilian Population aged 15 years and over (319,500 persons, or 1.6 per cent).
The trend participation rate for 15-64 year olds, which controls (in part) for the effects of an ageing population, remained steady for a second consecutive month at 78.0 per cent in January 2018 after the December 2017 number was revised up. This is the highest rate recorded since the series began in February 1978 and indicates the 15-64 year old population is participating in the labour market at a record high level. The gap between male and female participation rates in this age range is now less than 10 percentage points, at 82.9 and 73.2 per cent, continuing the long term convergence of male and female participation.
The trend participation rate for 15-24 year olds remained steady for a second consecutive month at 67.5 per cent in January 2018 after the December 2017 number was revised up. The unemployment rate for this group decreased by less than 0.1 percentage points to 12.2 per cent in January 2018 and decreased by 0.8 percentage points over the year.
The trend series smoothes the more volatile seasonally adjusted estimates and provide the best measure of the underlying behaviour of the labour market.
Seasonally Adjusted Estimates
Seasonally adjusted employment increased by 16,000 persons from December 2017 to January 2018. The underlying composition of the net change was a decrease of 49,800 persons in full-time employment and a 65,900 increase in part-time employment. Since January 2017, full-time employment has increased by 293,200 persons, while part-time employment has increased by 110,100 persons.
Seasonally adjusted monthly hours worked in all jobs decreased by 24.1 million hours (or 1.4 per cent) between December 2017 and January 2018 to 1,708.2 million hours. This follows a decrease of 8.6 million hours (or 0.5 per cent) from November to December 2017, and four consecutive increases up to November.
The seasonally adjusted employment to population ratio remained steady at 62.0 per cent for a second consecutive month in January 2018, representing an increase of 1.0 percentage point from the same time last year.
The seasonally adjusted unemployment rate decreased by 0.1 percentage points to 5.5 per cent in January 2018. The participation rate decreased by 0.1 percentage points to 65.6 per cent.
STATE AND TERRITORY ESTIMATES
In January 2018, increases in trend employment were observed in all states and territories. The largest increases were in New South Wales (up 7,600 persons) and Victoria (up 4,400 persons). The largest percentage increase was in the Australian Capital Territory at 0.3 per cent followed by New South Wales and the Northern Territory at 0.2 per cent, with all other states at 0.1 per cent.
Over the past year, increases in employment were also observed in all states and territories except Northern Territory (down 4,300 persons). The largest increases were in New South Wales (up 136,900 persons), Queensland (up 110,400 persons) and Victoria (up 90,200 persons). The highest annual employment growth rates were in the Australian Capital Territory (4.8 per cent), followed by Queensland (4.7 per cent) and New South Wales (3.6 per cent).
An increase in the trend unemployment rate was seen in New South Wales, Queensland and the Australian Capital Territory (all up 0.1 percentage points). The unemployment rate dropped in Tasmania (down 0.1 percentage points) and was unchanged in all other states and territories.
The largest increase in the trend participation rate was in the Australian Capital Territory (up 0.3 percentage points) followed by the Northern Territory (up 0.2 percentage points).
Seasonally Adjusted Estimates
In seasonally adjusted terms, the largest increase in employment was in Queensland (up 19,700 persons) followed by South Australia (up 5,300 persons) and Victoria (up 2,100 persons). The largest decrease was observed in New South Wales (down 21,200 persons), followed by Western Australia (down 8,900 persons).
The largest increase in the seasonally adjusted unemployment rate was in New South Wales (up 0.3 percentage points). Queensland and South Australia’s seasonally adjusted unemployment rates increased by 0.1 percentage points. Tasmania and Victoria saw decreases in their seasonally adjusted unemployment rates (down 0.8 and 0.5 percentage points respectively) while Western Australia remained unchanged.
The seasonally adjusted participation rate increased in Queensland and South Australia (0.5 and 0.4 percentage points respectively). The largest decrease was in Tasmania (down 0.7 percentage points).”
Australian Bureau of Statistics, “6202.0 Labour Force. Jan 2018“, 15 Feb 2018 (11:30 AEDT)More
EU: International Trade in Goods. Dec 2017
Press Release Extract [eu_trade]
The first estimate for euro area (EA19) exports of goods to the rest of the world in December 2017 was €180.7 billion, an increase of 1.0% compared with December 2016 (€179.0 bn). Imports from the rest of the world stood at €155.3 bn, a rise of 2.5% compared with December 2016 (€151.4 bn). As a result, the euro area recorded a €25.4 bn surplus in trade in goods with the rest of the world in December 2017, compared with +€27.6 bn in December 2016. Intra-euro area trade rose to €142.4 bn in December 2017, up by 2.8% compared with December 2016.
In January to December 2017, euro area exports of goods to the rest of the world rose to €2 192.9 bn (an increase of 7.1% compared with January-December 2016), while imports rose to €1 954.8 bn (an increase of 9.7% compared with January-December 2016). As a result the euro area recorded a surplus of €238.1 bn, compared with +€265.2 bn in January-December 2016. Intra-euro area trade rose to €1 841.2 bn in January-December 2017, up by 7.4% compared with January-December 2016.
The first estimate for extra-EU28 exports of goods in December 2017 was €160.6 billion, down by 2.7% compared with December 2016 (€165.0 bn). Imports from the rest of the world stood at €146.4 bn, up by 1.4% compared with December 2016 (€144.3 bn). As a result, the EU28 recorded a €14.3 bn surplus in trade in goods with the rest of the world in December 2017, compared with +€20.7 bn in December 2016. Intra-EU28 trade rose to €256.2 bn in December 2017, +2.9% compared with December 2016.
In January to December 2017, extra-EU28 exports of goods rose to €1 878.5 bn (an increase of 7.7% compared with January-December 2016), while imports rose to €1 853.5 bn (an increase of 8.2% compared with January- December 2016). As a result, the EU28 recorded a surplus of €25.0 bn, compared with +€32 bn in January- December 2016. Intra-EU28 trade rose to €3 343.4 bn in January-December 2017, +7.3% compared with January- December 2016.”
Eurostat, “December 2017: Euro area international trade in goods surplus €25.4 bn, €14.3 bn surplus for EU28“, 15 Feb 2018 More
US: Unemployment Insurance Weekly Claims Report
Press Release Extract [ser_4]
In the week ending February 10, the advance figure for seasonally adjusted initial claims was 230,000, an increase of 7,000 from the previous week’s revised level. The previous week’s level was revised up by 2,000 from 221,000 to 223,000. The 4-week moving average was 228,500, an increase of 3,500 from the previous week’s revised average. The previous week’s average was revised up by 500 from 224,500 to 225,000.
Claims taking procedures in Puerto Rico and in the Virgin Islands have still not returned to normal.
The advance seasonally adjusted insured unemployment rate was 1.4 percent for the week ending February 3, unchanged from the previous week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending February 3 was 1,942,000, an increase of 15,000 from the previous week’s revised level. The previous week’s level was revised up 4,000 from 1,923,000 to 1,927,000. The 4-week moving average was 1,941,250, a decrease of 5,750 from the previous week’s revised average. The previous week’s average was revised up by 1,000 from 1,946,000 to 1,947,000.
The advance number of actual initial claims under state programs, unadjusted, totaled 233,009 in the week ending February 10, a decrease of 9,953 (or -4.1 percent) from the previous week. The seasonal factors had expected a decrease of 16,510 (or -6.8 percent) from the previous week. There were 245,886 initial claims in the comparable week in 2017.
The advance unadjusted insured unemployment rate was 1.6 percent during the week ending February 3, unchanged from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 2,317,271, an increase of 6,616 (or 0.3 percent) from the preceding week. The seasonal factors had expected a decrease of 11,563 (or – 0.5 percent) from the previous week. A year earlier the rate was 1.8 percent and the volume was 2,464,850.
The total number of people claiming benefits in all programs for the week ending January 27 was 2,347,377, a decrease of 66,722 from the previous week. There were 2,526,820 persons claiming benefits in all programs in the comparable week in 2017.
Extended benefits were available in Alaska and the Virgin Islands during the week ending January 27.
Initial claims for UI benefits filed by former Federal civilian employees totaled 922 in the week ending February 3, a decrease of 997 from the prior week. There were 740 initial claims filed by newly discharged veterans, an increase of 39 from the preceding week.
There were 12,275 former Federal civilian employees claiming UI benefits for the week ending January 27, a decrease of 1,891 from the previous week. Newly discharged veterans claiming benefits totaled 8,826, an increase of 172 from the prior week.
The highest insured unemployment rates in the week ending January 27 were in the Virgin Islands (10.0), Puerto Rico (4.1), Alaska (3.9), Connecticut (3.0), New Jersey (3.0), Montana (2.8), Rhode Island (2.8), Massachusetts (2.6), Illinois (2.5), and Pennsylvania (2.5).
The largest increases in initial claims for the week ending February 3 were in Kentucky (+614), Ohio (+130), Wisconsin (+117), Minnesota (+113), and South Carolina (+97), while the largest decreases were in Missouri (-7,390), California (- 5,375), Georgia (-1,771), Pennsylvania (-1,589), and Connecticut (-1,511).”
Employment and Training Administration, “Unemployment Insurance Weekly Claims Report“, 15 Feb 2018 (08:30) More
US: Producer Price Index. Jan 2018
Press Release Extract [eu_ppi]
The Producer Price Index for final demand increased 0.4 percent in January, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices were unchanged in December and moved up 0.4 percent in November. On an unadjusted basis, the final demand index rose 2.7 percent for the 12 months ended in January.
In January, the rise in the index for final demand is attributable to a 0.3-percent increase in prices for final demand services and a 0.7-percent advance in the index for final demand goods.
The index for final demand less foods, energy, and trade services rose 0.4 percent in January, the largest advance since increasing 0.5 percent in April 2017. For the 12 months ended in January, prices for final demand less foods, energy, and trade services moved up 2.5 percent, the largest rise since 12-month percent change data were available in August 2014.
Final demand services: Prices for final demand services advanced 0.3 percent in January following a 0.1- percent decline a month earlier. Nearly two-thirds of the broad-based increase is attributable to the index for final demand services less trade, transportation, and warehousing, which moved up 0.4 percent. Margins for final demand trade services rose 0.3 percent, and prices for final demand transportation and warehousing services advanced 0.4 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.)
Product detail: A major factor in the January increase in prices for final demand services was the index for hospital outpatient care, which rose 1.0 percent. The indexes for apparel, footwear, and accessories retailing; health, beauty, and optical goods retailing; residential real estate services (partial); long-distance motor carrying; and hospital inpatient care also moved higher. In contrast, margins for chemicals and allied products wholesaling declined 2.3 percent. Prices for wireless telecommunication services and airline passenger services also fell.
Final demand goods: The index for final demand goods jumped 0.7 percent in January, the sixth consecutive increase. Over 80 percent of the January advance can be traced to prices for final demand energy, which climbed 3.4 percent. The index for final demand goods less foods and energy rose 0.2 percent. Conversely, prices for final demand foods fell 0.2 percent.
Product detail: Nearly half of the January increase in the index for final demand goods is attributable to prices for gasoline, which climbed 7.1 percent. The indexes for residential electric power, iron and steel scrap, diesel fuel, jet fuel, and fresh and dry vegetables also moved higher. In contrast, prices for chicken eggs fell 38.9 percent. The indexes for residential natural gas and for power cranes, draglines, and shovels also declined.
Intermediate Demand by Commodity Type
Within intermediate demand in January, prices for processed goods increased 0.7 percent, the index for unprocessed goods advanced 0.9 percent, and prices for services edged up 0.1 percent.
Processed goods for intermediate demand: The index for processed goods for intermediate demand climbed 0.7 percent in January, the sixth straight rise. Seventy percent of the January advance is attributable to a 2.5-percent increase in prices for processed energy goods. The index for processed materials less foods and energy also moved higher, rising 0.3 percent. Conversely, prices for processed foods and feeds moved down 0.3 percent. For the 12 months ended in January, the index for processed goods for intermediate demand advanced 4.6 percent.
Product detail: A major factor in the January increase in prices for processed goods for intermediate demand was the index for diesel fuel, which rose 5.1 percent. Prices for gasoline, commercial electric power, jet fuel, primary nonferrous metals, and copper and brass mill shapes also moved higher. In contrast, the processed eggs index fell 13.2 percent. Prices for utility natural gas and ethanol also declined.
Unprocessed goods for intermediate demand: The index for unprocessed goods for intermediate demand increased 0.9 percent in January, the third straight advance. Most of the January rise can be attributed to the index for unprocessed nonfood materials less energy, which climbed 3.8 percent. The index for unprocessed energy materials advanced 0.5 percent. Conversely, prices for unprocessed foodstuffs and feedstuffs declined 0.8 percent. For the 12 months ended in January, the index for unprocessed goods for intermediate demand climbed 2.5 percent.
Product detail: A major factor in the January increase in the index for unprocessed goods for intermediate demand was prices for iron and steel scrap, which jumped 12.9 percent. The indexes for crude petroleum, slaughter barrows and gilts, slaughter chickens, corn, and nonferrous scrap also moved higher. In contrast, prices for slaughter cattle fell 4.9 percent. The indexes for natural gas and wastepaper also moved lower.
Services for intermediate demand: Prices for services for intermediate demand inched up 0.1 percent in January following no change in December. Leading the increase, the index for services less trade, transportation, and warehousing for intermediate demand advanced 0.1 percent. Prices for transportation and warehousing services for intermediate demand rose 0.3 percent. Conversely, margins for trade services for intermediate demand declined 0.3 percent. For the 12 months ended in January, the index for services for intermediate demand climbed 2.9 percent.
Product detail: A 2.7-percent increase in the index for business loans (partial) was a leading factor in the January rise in prices for services for intermediate demand. The indexes for securities brokerage, dealing, investment advice, and related services; network compensation from broadcast and cable television; paper and plastics products wholesaling; and long-distance motor carrying also moved higher. In contrast, margins for chemicals and allied products wholesaling fell 2.3 percent. The indexes for machinery and equipment parts and supplies wholesaling, internet advertising (sold by non-print publishers), and airline passenger services also decreased.
Intermediate Demand by Production Flow
Stage 4 intermediate demand: Prices for stage 4 intermediate demand advanced 0.3 percent in January after no change in December. In January, the index for total goods inputs to stage 4 intermediate demand climbed 0.7 percent, while prices for total services inputs were unchanged. Increases in the indexes for diesel fuel, gasoline, commercial electric power, business loans (partial), legal services, and paper and plastics products wholesaling outweighed declines in the indexes for machinery and equipment parts and supplies wholesaling, chemicals and allied products wholesaling, and prepared poultry. For the 12 months ended in January, prices for stage 4 intermediate demand moved up 3.1 percent.
Stage 3 intermediate demand: The index for stage 3 intermediate demand rose 0.4 percent in January, the sixth straight advance. In January, prices for total goods inputs to stage 3 intermediate demand increased 0.8 percent. The index for total services inputs was unchanged. Higher prices for gasoline, jet fuel, slaughter barrows and gilts, slaughter chickens, diesel fuel, and business loans (partial) outweighed decreases in the indexes for raw milk, slaughter cattle, and chemicals and allied products wholesaling. For the 12 months ended in January, prices for stage 3 intermediate demand climbed 4.1 percent.
Stage 2 intermediate demand: The index for stage 2 intermediate demand increased 0.5 percent in January, the seventh consecutive rise. In January, prices for total goods inputs to stage 2 intermediate demand moved up 0.5 percent, and the index for total services inputs advanced 0.3 percent. Higher prices for crude petroleum; network compensation from broadcast and cable television; legal services; securities brokerage, dealing, investment advice, and related services; commissions from sales of insurance; and liquefied petroleum gas outweighed declines in the indexes for natural gas, thermoplastic resins and plastics materials, and cable network advertising time sales. For the 12 months ended in January, prices for stage 2 intermediate demand rose 3.0 percent.
Stage 1 intermediate demand: Prices for stage 1 intermediate demand advanced 0.9 percent in January, the eighth straight increase. In January, the index for total goods inputs to stage 1 intermediate demand jumped 1.7 percent. In contrast, prices for total services inputs fell 0.2 percent. Rising prices for iron and steel scrap, diesel fuel, business loans (partial), gasoline, nonferrous scrap, and crude petroleum outweighed declines in the indexes for deposit services (partial), primary basic organic chemicals, and natural gas. For the 12 months ended in January, prices for stage 1 intermediate demand moved up 5.6 percent.”
Bureau of Labor Statistics, “Producer Price Index. Jan 2018“, 15 Feb 2018 (08:30) More
Bloomberg Misery Index. 2018
“Rising prices are more of a threat to the global economy this year than joblessness, according to Bloomberg’s Misery Index, which sums inflation and unemployment outlooks for 66 economies.” Bloomberg
Least miserable countries
Most of the world’s least miserable people are more miserable in 2018 …
“China, the world’s second-largest economy, saw its misery score rise to 6.3 in 2018 from 5.5 in 2017. Consumer prices are estimated to rise 2.3% this year, compared with 1.6% in 2017.
USA will see its misery score improve to 6.2 in 2018 from 6.5 in 2017 even as inflation rises following years of persistently low price gains, and as the labor market continues to tighten.” Bloomberg
In 2017 Australia was ranked 43 with a projected score of 7.7, up actual scores of 7.0 in 2016, and 7.6 in 2015.
Most miserable countries
Venezuela exemplifies misery as President Nicolás Maduro campaigns for re-election on 22 Apr 2018.
“In Venezuela, hyperinflation has left many economists throwing up their hands at the actual rate of price growth. Black-market currency rates have provided an angle on the numbers, while alternative measures have chased daily cost swings. A recent government slashing of grocery prices gave a brief reprieve to inflation, while the surveyed economists see it rising 1,864 percent this year. It’s anyone’s guess: The International Monetary Fund’s latest estimate has that figure at 13,000% for this year after about 2,400% in 2017.
Argentina, ranked at No. 3, belies a third year of improvement in its overall score, set to be the lowest since at least 2013, the year in which the IMF censured the country for covering up high inflation and when Bloomberg began calculating the data.” Bloomberg Bloomberg (2016 Values) Bloomberg (2015 Values)
About the Misery Index
“The misery index is an economic indicator originally created by Arthur Okun, a former Brookings Institution economist and member of the Council of Economic Advisers to U.S. President Lyndon B. Johnson. The misery index is calculated by simply adding the unemployment rate to the inflation rate. Despite its rather simple calculation, it is useful in determining how the average citizen in a given country is doing, as higher rates of unemployment and inflation are associated with increased socioeconomic issues for a country.
Okun invented the misery index in the 1970s while working at the Brookings Institution. The misery index is often trotted out during times of economic turmoil and Okun’s invention was certainly timed to perfection in that regard. During the 1970s, the U.S. as well as much of the rest of the world was suffering from both high inflation and high unemployment, which came to be called “stag-flation”. This was largely caused by OPEC’s rise to power and subsequent oil shipment boycott to the U.S. and other western nations in retaliation for their assistance to Israel during the Yom Kippur War. This situation caused oil prices to skyrocket and economic growth to slow while the stock market crashed.
Although the misery index usually appears in times of economic turmoil, the global economy is doing pretty well at the moment. We forecast global growth at 3.2% in 2018, which would represent the highest growth in many years.” Focus Economics
^ JPY movements against the USD over the past month (mouseover for inverse) Chart: xe.com
Stockmarket: Nikkei 225
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The Shanghai Stock Exchange is closed for the Lunar New Year holiday period: 15-21 Feb 2018