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What is the ISM Manufacturing Index and its role as an indicator for the US Economy?

What is the ISM Manufacturing Index and its role as an indicator for the US Economy?

The ISM manufacturing index is a monthly index published (since 1948) at the beginning of the month by the Institute of Supply Management (formerly known as the National Association of Purchasing Management, Inc. (NAPM)founded in 1915 to serve supply management professionals). The index aims to gauge the relative strength of economic activity - month by month - in the US manufacturing sector, by surveying purchasing managers at over four hundred manufacturing firms across all 50 states and over 20 major industries in the US.

It is a key leading indicator of the state or health of the U.S. economy, one that is closely watched by the investors, economists, and government agencies as it reflects purchasing decisions made by purchasing managers significantly in advance to meet manufacturing forecasted needs based on consumer/business demand.

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Are the Roaring 20's Back? Ed Yardeni Thinks They May Be.

Are the Roaring Twenties Back?

Ed Yardeni, former chief investment strategist at Deutsche Bank thinks they may be in a recent interview with Bloomberg senior columnist Merryn Somerset Webb. Ed Yardeni is a well-respected wall street veteran of 40+ years who has served as Chief Investment Strategist of Oak Associates, Prudential Equity Group, and Deutsche Bank. He was also the Chief Economist of C.J. Lawrence, Prudential Securities, and E.F. Hutton.

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What The HEC’onomy! Deciphering What is Actually Happening in The Economy and The Potential Implications - Part Two

In this second installment of "What the Hec'onomy. Deciphering what is going on in the economy and markets" we will examine what the impact of rate hikes have been to date as well as other market forces at work in the economy.

The Residential Real Estate Market

Let us start by looking at the residential real estate market. If you were a homeowner with a mortgage during the close to zero interest rate era, it is likely that you would have taken advantage of refinancing your home when 15- and 30-year fixed mortgage rates were in the 1.7-3.25% range. At today’s mortgage rates of 6-8% you are less likely to move if you do not have to for work or other pressing reasons. For homeowners in this category, mortgage related costs have not gone up, which means that their overall purchasing power has been less impacted.

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Understanding Economic Cycles, Sentiment and Valuations

"Nothing is so treacherous as the obvious" observed Joseph A Schumpeter the famous Austrian political economist who is regarded as one of the 20th century's greatest intellectuals and best known for his theories on business cycles and the development of capitalist economies as well as for introducing the concept of entrepreneurship.

Cycles, whether they be seasonal, economic, or personal, are inextricably tied to life. History has proven that economies rise and fall, and asset prices rise and fall as sure as night follows day. An economic cycle for example is defined as consisting of four distinct phases: expansion; peak; contraction; and trough. Each economic cycle comprises of these four phases. It is also fair to say that one can observe larger economic cycles within which several economic cycles may play out. If you could anticipate, plan, and organize around each stage of these cycles you would inevitably become more astute in any number of professional fields that require the purchase and sale of any asset, service or commodity. If economic cycles are inevitable which they are, why are they not then more predictable? This brings us back to the opening quote in this article by Joseph A. Schumpeter "Nothing is so treacherous as the obvious". How often do we grapple with an issue - any issue - only to say after days. months or years have gone by that the answer or solution had been staring us in the face, except for the fact that we did not see it.

The obvious is sometimes anything but and can be easily obscured by the very human attributes that make us...human. Whether it is hope, denial, greed, doubt, disbelief, attachment to an ideal, theory or assumption that we learnt or inherited in our past or took at face value from an expert, any of these factors can obscure the "obvious".

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Fed Now and The Crossroads to a Global Digital Payments Economy

The Biggest Upgrade to the US Financial Payment Rails Since SWIFT

The biggest upgrade to the payment rails of the US financial industry - since the SWIFT system was introduced in 1973 - is going to be unveiled in July 2023. The system known as FED NOW will enable instant payments that take seconds to complete and can occur 24/7, 365 days a year, all with integrated clearing functionality allowing financial institutions to deliver end-to-end instant payment services to their customers. This means the recipient of funds will have immediate availability and access to utilize these funds. To put this in perspective ACH transfers typically take anywhere from one to three business days to complete, domestic wire transfers can take 24+ hours to complete and international wire transfers can take up to a week to complete. Fed Now will not replace the Automated Clearing House Network (ACH) - at least not anytime soon - and is expected to complement ACH services. However, the writing is clearly on the wall as Fed Now grows its track-record, adoption, sophistication, and capacity.

Instant payments are digital payments which have the capacity to be "programmable" and generate rich data. What is rich data? Rich data is the process of compiling data to determine when and where a person is most likely to buy something, as opposed to relying on trend forecasts. Rich Data is used to predict consumer behavior. While this may sound like a godsend to businesses of all types as well as the Federal Reserve and other agencies who rely on financial data for forecasting and decision making, this "potential to invade privacy" will simultaneously cause consumers to sound the "alarm". Who wants their every transaction to be trackable?

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