Sunday, October 16, 2022

Why Most Stocks May Go Nowhere for the Next 10 Years! / Stock-Markets / Stock Market 2022

By: Nadeem_Walayat

Here's why PE ratio's matter as the following chart shows the return 10 years forward from the starting average PE i.e if the stock market is trading on an average PE of 27 than can basically be expected to go nowhere for the next 10 years. Whilst the lower the PE the higher the expected return (on average), where the safe zone for investing is at a starting PE of between 10 and 20. Note graphs is as of September 2021, see below for updated ratios.

Sunday, October 16, 2022

Post-bubble Economic Contraction / Stock-Markets / Financial Markets 2022

By: Gary_Tanashian

“Post-bubble contraction” (PBC) as coined by Bob Hoye, may finally be at hand

Bob Hoye has been talking about a coming post-bubble contraction (PBC) for many years, in my experience. Now after many false starts, it may finally be in play on the wider macro picture. Past contractions (e.g. 2008 and 2020) have proven to be little more than precursors, triggers to new asset bubble phases because the Fed’s main macro manipulation tool, bonds, were in a multi-decade long trend of disinflationary signaling.

To this point with respect to the PBC, timing has been an issue. This is not a critique of Hoye, a fine financial historian and macro fundamental analyst. In fact, it is the opposite. It is from him that I learned the proper fundamentals for gold and especially the gold mining industry. But perfectly good deflationary meltdowns (of previous inflationary operations) were foiled in both 2008 and 2020.

Why were they foiled so effectively? Because the Federal Reserve and global central banks have for decades had a lenient bond market to fall back on (the fabled ‘bond vigilantes of yore apparently rode into a small town, hit the saloon and never again emerged… until 2022, that is). I have for many years now used the 30-year yield ‘Continuum’ (monthly 30yr yield chart, below) as a nice visual to the mechanics of the Fed’s macro-manipulative wheel house, the US Treasury bond market.

Saturday, October 15, 2022

Feeding the Stocks Bear Market Beast / Stock-Markets / Investing 2022

By: Nadeem_Walayat

For some reason most folk when looking at the charts focus on the high vs the low as if investors only buy and sell at the exact highs and lows, well maybe the mania herd bought near the highs last year to sell near the lows this year but most intelligent investors don't invest that way i.e. during the second half of last year, I sold down 80% of my AI tech stocks portfolio in advance of this bear market, including warning virtually within a few percent of the high to get ready for a bear market during 2022 and maybe even worse a crash! That was on the 5th of December 2021!

Saturday, October 15, 2022

New Banking Crisis Looms as Fears of “Lehman Moment” Rise / Stock-Markets / Financial Crisis 2022

By: MoneyMetals

As new inflation data pushes the Fed toward continuing with rate hikes, precious metals markets are struggling to make headway.

On Thursday, the government released Consumer Price Index data for September. The so-called core CPI, which excludes food and energy, increased 6.6% from a year ago. That’s the highest core inflation memorizing since 1982.

Although prices at the pump have eased since the summer peak, other inflation components continue to rise. Housing, food, and medical care are currently among the biggest contributors to rising consumer prices.

Wednesday, October 12, 2022

Why Most Stocks May Go Nowhere for the Next 10 Years! / Stock-Markets / Stock Market 2022

By: Nadeem_Walayat

Here's why PE ratio's matter as the following chart shows the return 10 years forward from the starting average PE i.e if the stock market is trading on an average PE of 27 than can basically be expected to go nowhere for the next 10 years. Whilst the lower the PE the higher the expected return (on average), where the safe zone for investing is at a starting PE of between 10 and 20. Note graphs is as of September 2021, see below for updated ratios.

Monday, October 10, 2022

Stock Market Trend Current State of Play / Stock-Markets / Stock Market 2022

By: Nadeem_Walayat

S&P closed at 3680. trading to a low of 3633, June's low is 3622, so the 50% retracement studies conclusion so far remains in tact which implies that this decline is a bear trap, to be clear a trap for the bears all betting on a collapse into the abyss of 3,200 and below, fantasy numbers such as 3000 area being bandied around, and apparently Monday 26th is the end of the SHIEMITA when a big CRASH is due!, Note I don't for a minute take this nonsense seriously, anyway today's the last day of the SHEIMTA that was ironically brought to my attention in June near the bear market lows when there were shrill cries of SELL EVERYTHING NOW! In which case the Shemita folk are looking to break even today (in US dollars). To be clear SHIMTA is BS, but like all BS's there will be coincidences which with the benefit of hindsight will be twisted and turned into support of BS as will probably happen to this SHEIMITA where what it originally implied will be subverted with the benefit of hindsight, that's the case with religious mumbo jumbo, people actually do want to believe in the super natural! That ancient religious texts somehow have magic powers to predict what the stock market will do in 2022 which can only happen via a self fulfilling prophecy, i.e. if enough believe in it and act on it then yes it sort of comes true, which in fact is the basis of Technical Analysis, traders and algo's lock step acting on wiggly lines on the charts. A quick google shows that most of the major market CRASH events happened AFTER SHEMITA but for some reason SHEMITA claims jurisdiction over them as well i.e. 1987 Crash, 9-11 attack and so on,

Thursday, October 06, 2022

Jerome Powell's TRANSITORY DIP in INFLATION, AI and High Risk Stocks Updated Buying Levels / Stock-Markets / Investing 2022

By: Nadeem_Walayat

INFLATION! INFLATION! INFLATION!

The big questions for the US and how our US tech stocks will fair over the coming year are -

1. Does the Federal Reserve finally understand just how dangerous inflation actually is ?

2. If it does then how is it going to subvert the inflationary policies of the White house, does not matter which clown is in office i.e. democrat or republican, BOTH have tendencies towards rampant money printing given the 4 year election cycle.

Sunday, October 02, 2022

Answering the Question - Has the Stocks Bear Market Bottomed? Apple Nut About Crack? / Stock-Markets / Stock Market 2022

By: Nadeem_Walayat

Dear Reader

Has the BEAR market Bottomed? That is the question I am most often asked for the duration of this bear market, where my earlier responses were that my focus was on accumulating target stocks as they DEVIIATE FROM THEIR HIGHS TO NEW LOWS, so where the indices actually bottom is largely irrelevant. Still this is the most asked question so following the June bottom my stance changed to the bottom is probably in for most target stocks, though I cannot say the same for the indices. However in the run up to 4180 I had penciled in a subsequent bear swing target of between 3720 to 3920 for a probable higher low, which means that June was probably the bottom. This weeks price action further strongly suggests that the BOTTOM IS IN as I voiced in the comments section of my last article where for me the key indication was the breakout above 4200, it was not an intraday move or a few shallow spikes above 4200, Instead the S&P rocketed higher by over 110 points in a 3 day run from 4200 to 4317 that acted as a strong indicator that 3637 was THE BOTTOM, and thus all we can now seek is a correction of a fraction of the rally off the bottom for a 2nd bite at the AI stocks investing cherries.

However, the bottom is in is also based on my past studies that suggest a 50% reversal from the bear market lows usually act as a strong indication of the bottom being in which is the focus of this analysis that acts as a further excerpt from my forthcoming in-depth analysis that I have hit the pause button on for 1 week as I venture out of my castle for the first time in 6 months to travel to Wales for some sun, sea and sand and perhaps see if I can find Excalibur in one of it's many lakes that follows the slow recovery form my March ruptured Achilles tendon injury that revealed the extent to which the NHS is a JOKE Health Service when one actually has the misfortune to use it.

Saturday, October 01, 2022

Fed QT2 Imperils Stock Markets / Stock-Markets / Stock Market 2022

By: Zeal_LLC

The Fed’s second quantitative-tightening campaign already ramped up to full-speed in September, with dire market implications.  The unprecedented scale of QT2’s monetary destruction dwarfs QT1’s, which crushed stock markets.  With inflation raging out of control because of the Fed’s extreme quantitative-easing money printing, it has no choice but to run aggressive QT even though that imperils overvalued stocks.

Like many serious economic problems today, the Fed’s intractable money-supply-inflation mess was born in March 2020’s pandemic-lockdown stock panic.  In just over a single month, the flagship S&P 500 stock index plummeted an apocalyptic 33.9%!  Traders were terrified government-imposed lockdowns to fight the new COVID-19 virus would force a severe recession or full-blown depression, so they ran for the hills.

Fed officials joined in that panicking, deeply thinking that the negative wealth effect from cratering stocks would crush consumer spending and thus the US economy.  So the Federal Open Market Committee rushed to intervene, making two emergency inter-meeting federal-funds-rate cuts of 50 basis points and 100bp!  But with the latter slamming the FFR back down to zero, the Fed was out of rate-cut ammunition.

So these elite central bankers making monetary policy decided to radically expand their already-underway fourth QE campaign.  QE4 had been born about five months earlier in mid-October 2019, adding $275b to the Fed’s balance sheet in that span.  At that same Sunday-evening meeting where the FOMC slashed its FFR 100bp, it pledged to monetize “at least” $500b in US Treasuries and $200b in mortgage-backed bonds.

Wednesday, September 28, 2022

STOCKS BEAR MARKET DISCOUNTING EVENT BIG PICTURE / Stock-Markets / Stock Market 2022

By: Nadeem_Walayat

As my recent excerpt from my forthcoming mega-piece on the stock market illustrated, there is a 80% probability that the bear market has bottomed and so far it has not done anything to negate this probability. Therefore it looks like we are coming out of our 6th MAJOR discounting event since the BIG Financial Armageddon BAD BEAR MARKET bottomed in March 2009.

Zoom out of hourly and daily charts and see the true magnitude of the 2022 bear market that has so many thinking of much worse to come.MSM coverage of the financial markets is akin to a fly buzzing around that needs swatting!

Wednesday, September 28, 2022

How to Profit During a Bear Market - Portfolio Account / Stock-Markets / Investing 2022

By: Nadeem_Walayat

Back in early April I opened an IKBR ISA with £20k (ISA limit) that I proceeded to quickly populate with target stocks as they traded down to new bear market lows. ISA's limit what one can do, i.e. NO SHORTING, Options and no access to most ETF's due to HMRC rules, another restriction is one cannot hold US Dollars, every buy and sell has to be converted into and out of US dollars, so ISA's are definitely geared towards longer term investors. Anyway the IKBR ISA acts as a good real world proxy for how my public portfolio should perform if one followed my analysis, where the primary goal is to accumulate during this temporary bear market to capitalise on during the subsequent bull market, my expectations from the outset were that there WILL BE DRAWDOWNS because stock prices FALL during bear markets so as to result in the buying opportunities, stocks getting cheaper during a bear market is a good thing! Cheaper in terms of their valuations for if a stock price falls and the stock gets more expensive in valuation terms then that is NOT a good thing!

Current state of the IKBR ISA is up 12% since inception (Early April 2022) through following my analysis of buying target stocks when they trade down to NEW LOWS and then trimming lightly on the subsequent rallies, cash now comprises about 33% of this portfolio up from about 3% near the lows, as IKBR does not charge a rip off f/x fee as many brokers, for comparison FreeTrade charges 0.45%, AJ Bell 1% and Interactive Investor charge 1.5%, what are they smoking! AJ Bell recently cut their f/x fee to 0.75% but their platform is a pain in the butt to use for US stocks i.e. NO LIMIT ORDERS!

Monday, September 26, 2022

S&P June Stock Market Lows - To Break or Not to Break? / Stock-Markets / Stock Market 2022

By: Nadeem_Walayat

Stock Market - To break the June Low or not to break the June low, that is the question?

Saturday, September 24, 2022

Stock Market BULL Trap SET! / Stock-Markets / Stock Market 2022

By: Nadeem_Walayat

Stock Market FOMO's to 4280 Friday close ending at the high of the day! Short covering rally triggered by CPLIE of 8.5% down from 9.1% for June, all blind to the reality of what Inflation above 4% let alone above 8% actually means for the US economy and how it impacts the every day lives of ordinary americans that are destined for greater pain with each passing month even if CPLIE nose dives to under 4% which will make NO difference in terms of the Inflation pain that I suspect will run for the whole of this decade as the 10 year inflation graph warns of what looks set to come to pass. It's not rocket science, it's the consequences of over $9 trillion of QE, and $35 trillion of total GLOBAL money printing QE, the only way it won't show up in the inflation indices is if they systematically exclude everything that goes up in price, perhaps only leaving the ball point pen that Jerome Powell fidgets with at every Fed meeting.

Friday, September 23, 2022

Economic Conditions, Market Performance Worsen after Fed Rate Hike / Stock-Markets / Financial Markets 2022

By: MoneyMetals

Precious metals markets are trying to tough this week despite another large rate hike by the Federal Reserve.

On Wednesday, the Fed raised its benchmark interest rate by three quarters as expected. Fed chairman Jerome Powell vowed to bring inflation down and restore price stability.

Jerome Powell: My colleagues and I are strongly committed to bringing inflation back down to our 2% goal. We have both the tools we need and the resolve that it will take to restore price stability on behalf of American families and businesses. Price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy. Without price stability, the economy does not work for anyone. We are moving our policy stance purposefully to a level that will be sufficiently restrictive to return inflation to 2%. The longer the current bout of high inflation continues the greater the chance that expectations of higher inflation will become entrenched.

After pursuing ultra-loose monetary policy that fomented price instability and massive inflation in the first place, Powell seems to now want to model himself after former Fed chairman Paul Volcker. In the early 1980s, Volcker jacked up interest rates to the highest on record to finally curtail the inflation surge from the late 1970s.

Friday, September 23, 2022

Why You Should Be Leery of the Stocks Bond 60 / 40 Portfolio / Stock-Markets / Stock Market 2022

By: EWI

"The tidal wave of risk assumption … may be turning"

Many investors allocate a percentage of their portfolios to bonds to cushion against a drop in the stock market.

A popular allocation is a 60 / 40 mix of stocks and bonds.

However, this hasn't worked out recently. Here's a Yahoo! Finance headline (Sept. 6):

The 60/40 strategy is on pace for its worst year since 1936: BofA

The mix of 60% stocks and 40% bonds was down 19.4% from the start of the year through the end of August, according to Bank of America Global Research.

Thursday, September 22, 2022

Stock Market Smashing Fed Day / Stock-Markets / Stock Market 2022

By: Monica_Kingsley

S&P 500 turned decisively lower, with only a very brief spike that got reversed within an hour. No room for bullish misinterpretation, Powell didn‘t say really anything that could feed buy the dip sentiment – he delivered. Treasuries are getting accustomed to the soft landing not turning out so soft in the future actually – yields at the long end of the curve have finally turned down while Fed tightening keeps being reflected on the short end, and junk bonds are suffering.

In all the risk-off, the dollar was unable to hold on to sharp gains both yesterday and today, and together with the crypto premarket upswing and real asset resiliency, this points to a reprieve in paper asset selling later this week. SPX 3,825 is the key level to watch today. I like the message commodities and precious metals are sending here – once it gets accompanied by miners and oil sector stocks, things would get brighter, but we are not there yet. Suffice to say that sharp downside is being decisively rejected.

Wednesday, September 21, 2022

STOCKS BEAR MARKETS ARE SUPPOSED TO BE PAINFUL! / Stock-Markets / Stocks Bear Market

By: Nadeem_Walayat

The bottom line is that bear markets are supposed to be PAINFUL! And I can tell many investors feel that PAIN from the comments as they post the latest price of say Intel or AMD or TSMC or any other stock trading lower as if I have a magic button to press to make the stock go higher. So if you are feeling PAIN then go read my earlier recent articles on the psychology of investing in bear markets because bear markets are PAINFUL where the degree of pain experienced depends on what time frame on is focused upon.

Tuesday, September 20, 2022

Stocks Bear Market Accumulation Strategy / Stock-Markets / Investing 2022

By: Nadeem_Walayat

My strategy for this bear market from the outset has been be to accumulate during a volatile trend to a probable Dow target of 29k to 30k where I settled on my best guess of 29.6k, by late August. In the course of which I was expecting volatile swings of between 15% to 30% in either direction that would allow me to BUY big during the DIPs and then SELL a portion of what I bought during the bear market rallies, as well as selective shorting. Unfortunately this bear market has tuned out to be LESS volatile than what I was expecting i.e. swings higher of 9% are just not enough for any significant trimming of positions as the table illustrates.

Friday, September 16, 2022

Dow Stock Market Elliott Wave Trend Forecast / Stock-Markets / Stock Market 2022

By: Nadeem_Walayat

Despite being skeptical of Elliott wave theory and not abiding by any of it's tenants, i.e. I number the counts as I see them regardless of following the 'rules'. Nevertheless Elliott wave proved a useful tool during 2021 in the count down to the end of the Stocks bull market and the start of this bear market as the charts illustrate that there are times when EW BS actually works!

Thursday, September 15, 2022

Stock Market Elliott Wave Analysis and Trend Forecast Sept to Dec 2022 / Stock-Markets / Stock Market 2022

By: Nadeem_Walayat

Despite being skeptical of Elliott wave theory and not abiding by any of it's tenants, i.e. I number the counts as I see them regardless of following the 'rules'. Nevertheless Elliott wave proved a useful tool during 2021 in the count down to the end of the Stocks bull market and the start of this bear market as the charts illustrate that there are times when EW BS actually works!

Digital transformation is never going to be done. As technologies continue to evolve and emerge, companies need to keep up and continue with their own transformations. While some of my digital transformation trends predictions for 2022 were correct, others have just barely scratched the surface and will continue to be trending in 2023. So, what will we be seeing in the year ahead? Will customer experience and data make headlines or will the metaverse come to the forefront of the conversation. Based upon hundreds of conversations with the world’s most prolific tech companies and consumers, here are 10 trends that I feel will continue to be top of mind in 2023.

Automation on Tap to Drive Efficiency

Organizations everywhere are doing more with less. Many are still navigating staffing shortages as employees left the workplace in droves because of the pandemic. As a result, the employees that are left in the workplace are burnt out. They are jumping between platforms, searching for information, and spending a lot of time doing repetitive tasks. According to a survey from Asana, employees report spending only one-third of their day on work they were hired to do. That’s not conducive to business which is why I see many organizations finally starting to turn to technology as a solution.

The ability to streamline processes and drive efficiency can be huge for the bottom line, which is why I think automation and intelligent automation will be key in 2023. According to the Automation Now & Next Report, a survey our team at Futurum Research did in conjunction with Automation Anywhere, found that 61% of organizations are turning to automation to deal with staffing issues. For the year ahead, 94% say shifting employees to higher value work is a priority — which makes sense. Get employees working on tasks that will advance business instead of time-consuming and repetitive tasks that are a drain on resources and your bottom line is bound to improve.

I think there will be a focal point on solutions like Microsoft’s Power Platform, Red Hat’s Ansible, ServiceNow, and other low code or no code solutions that will fit easily into any organization’s tech stack. These solutions will streamline processes across the enterprise and will enable organizations to do less with more, and with more efficiency.

Regulation of Big Tech in Focus…Still

This was a trend that I predicted last year, and it will remain true for the coming year. Court rulings, antitrust legislation, and other regulations will continue to impact Amazon, Apple, Google, Meta, and other big tech companies as governments look to eliminate or mitigate the monopolistic practices in ecommerce, digital ads, search results, acquisitions, and app stores.

While most antitrust legislation has stalled or made very slight movement in congress here in the U.S., the EU has passed the Digital Markets Act which will be enforced starting in March 2023. The DMA will regulate big tech companies that act as “gatekeepers” due to their market position in areas around data collection, platform interoperability, bundling offerings, pre-installing apps and a few other areas.

We will have to wait and see how this is enforced, but if history is any indication, we will likely see some fallout that could impact several companies. But will it trickle down to consumers? Or will consumers get more choice and competition in the market like the act is setting out to accomplish? Again, only time will tell. It’s a complex topic, especially because I believe recent anti competition efforts have been less about protecting consumers and more about protecting competition given society’s attachment to ubiquitous platforms like Apple, Amazon, and Google. Regardless, I will also be watching to see how U.S. legislators respond either at federal or state levels just as it happened once the GDPR passed.

Big tech is crucial in our lives — we can’t live without it. So, I don’t think the cycle of alleged abuses, lawsuits, legislation, appeals, and more lawsuits will ever truly end. It will just be interesting to see what comes to fruition in the coming year or if big tech can continue their streak winning cases and avoiding strict regulations.

Observability is Red Hot

As the adoption of cloud-native infrastructure and serverless, container technologies have boomed in the last few years, IT departments have had to change their monitoring practices. What worked for legacy systems, no longer works for these new technologies. Observability enables complete visibility across complex infrastructures for everyone in IT from system administrators to developers. And with that visibility, IT can detect and fix errors before they become bigger problems, and security can detect and mitigate threats before they attack. Which is why observability will be a huge trend in 2023.

Companies like Splunk, IBM, Cisco and ServiceNow have all made big bets on observability. ServiceNow, for instance, made several acquisitions from Lightstep last year to Era Software just this week to unify observability throughout its platform, while Cisco shared its big bets on Observability at this year’s Cisco Live event.

ESG, ESG, ESG!

Did someone say environmental, social, governance? This was a major trend in 2021 and 2022 and will continue likely for years to come. Investments to make operations more sustainable, new partnerships to develop technologies to reduce our impact on the climate, and pledges to reduce carbon footprints have been in headlines this year and I believe they will be again in 2023.

The tech community has really taken climate efforts into their own hands with pledges to achieve carbon neutrality by 2050. And these efforts can’t start soon enough. A recent study from the U.N. showed that we have not done enough to stem the climate crisis yet and are currently on track to see a global 2.7°C temperature increase in the coming decades, a slight change that would have detrimental consequences for everyone.

Which is why I’m pleased to see so many companies continue to take part in Amazon’s climate pledge, which now has over 350 signatories. Other companies like Microsoft, Intel, and SAP (among many others) have beefed up their sustainability offerings, making it easier for other companies to track and report on their sustainability initiatives. This will likely continue in 2023 as consumers and shareholders alike put pressure on businesses to create ESG programs.

This course will continue to be at the forefront, and while there is much to prove from the tech industry that this is more than just talk, it is encouraging to see progress so long as companies figure out how to balance sustainable practices, customer satisfaction, and profitable business operations.

Rethinking the Metaverse — Getting Practical

The metaverse was an honorable mention last year but has made the full list of predictions for 2023. The metaverse has slowly started to grow in the last year with more companies making plans for business in the metaverse. While I still think we are a few years away from a full-blown metaverse, I think we are going to see more practical plans for what it might look like.

We’ve already seen changes to how money flows in the metaverse, with NFTs, cryptocurrency and decentralized finance capturing more headlines in 2021. Companies will likely look to continue to capitalize on this growth with more offerings while they look to position themselves wisely in for the future of the metaverse. And while companies like Apple and Meta will squabble over what the future will look like, the fact that there are already proposed legislations for management of the metaverse in the EU, South Korea and Japan shows that this fad, as some have called it, isn’t going away any time soon.

For me, the metaverse is less what we are hearing from Mark Zuckerberg and more in line with what CEOs like NVIDIA’s Jensen Huang is sharing in the build out of its Omniverse offering. It’s going to be about bringing immersion into our physical world more than the other way around. We are in the era of creation. From data replication to the build out of virtual, autonomous, simulated environments, the Metaverse for industry like smart cities and digital twins is something that is being done now—and this will continue to gain strong momentum in 2023.

Collaboration is the New Normal

In 2022, hybrid work has really taken center stage with more and more organizations allowing employees to take advantage of flexible work schedules. As a result, collaboration companies have released new features and adjusted platforms to make collaboration easy, seamless, and equitable regardless of location.

This will be our new normal. And I think it will only get better as collaboration platforms will begin to be integrated with systems of record, making it easier for employees to do work across tech stacks in the enterprise. Siloes are collapsing everywhere and collaboration is now at the center of how we operate — and as businesses find more success, it will never change.

Microsoft Teams will continue to lead the pack bringing together synchronous and asynchronous collaboration and merging with applications and productivity tools. However, I like the recent moves made by Salesforce with Slack Canvas and Huddles. Of course, Zoom was the pandemic darling and has been aggressively expanding its platform as well. HP bought Poly last year to bring greater convergence of hardware and personal devices, and Cisco has always been deeply entrenched in the collaboration space as well.

Collaboration will be more and more a thing of physical and digital—true immersion, and it will be further enhanced by AI, Metaverse, and 5G connectivity. It is also more than just meeting and events, but collaboration on experiences, which is what drove the Adobe Figma deal to be one of the largest and most talked about of 2022.

EV + AV — Cars + Trucks Get Smarter

Automotive technologies have gone into hyperdrive in the last year with partnerships, investments, and technology developments from companies like Qualcomm, Mobileye, NVIDIA, Marvell, Luminar, and Plus happening left and right. The software-defined vehicle is the vehicle of the future. We have seen semiconductor companies take charge of the future of the vehicle. Tesla has done it with its largely home-grown technology, but the likes of Mercedes, VW, BMW, and GM are turning to chipmakers like those mentioned above to get it done. Qualcomm saw its design pipeline swell to $30 billion as large automakers are seeking to build the cars of the future on intelligent computing platforms. This trend is locked and will be a story line throughout 2023.

In 2022, we have seen the debut of impressive chips to power everything from infotainment systems to ADAS as well as more advanced LiDAR technology that will make self-driving cars safer. We’ve also seen a number of agreements with OEMs and automotive tech companies to equip everything from cars to semitrucks with next-generation technology. I think 2023 will be the year we will see sustained progress in getting safer, highly autonomous vehicles on the road. We will also probably see more tests of higher level ADAS (L3, L4) in a variety of road conditions as the safety of these systems will still be a major question for a lot of consumers.

As for electric vehicle production, now that California has passed a law outlawing the sale of gas-powered vehicles by 2035, there will likely be major infrastructure shifts in the year to come. This law will bring complexity to a state that has electric infrastructure challenges, but it is indicative of what is to come as we seek to be more sustainable. With this, we will need more batteries, more charging stations, and grids that can support the influx in electric power. We are just at the start of this change and as a bit of a car guy, I can’t wait to see what will be developed this year.

Say Hi to AI (Artificial Intelligence)

Much like automation, the proliferation of analytics and artificial intelligence will continue to make its way into every part of our business and life. Even these trends are deeply impacted by AI from autonomous vehicles to multicloud to better collaboration experiences.

As I see it, AI goes from being a self-contained subject of interest to a largely embedded technology that impacts more and more of our everyday work and life. For instance, we are seeing the continued improvement of conversational AI systems making our day-to-day brand interactions more valuable. From chatbots that can handle multi-turn conversations to smarter Alexa devices, we are having thoughtful interactions with machines, and it has happened almost seamlessly with new software and hardware updates.

Furthermore, recommender engines powered by technologies from companies like NVIDIA are making our digital interactions better, perhaps to the point of a little bit too good. The ability for AI and ML to understand our behavior and make intelligent suggestions for what we buy, where we eat, who we talk to, and how we work are becoming more and more integrated in our lives. This is improving our in-app experiences as well as delivering better proactive customer experience.

At the core of AI will continue to be our semiconductor designers and manufacturers. Software gets the credit, but it will be the continued innovation of Intel, AMD, Qualcomm, NVIDIA, and more that takes powers the CPUs, GPUs, IPUs, and DPUs that enable data to drive insight, optimization, and real-time interactions.

We are seeing the likes of Microsoft, Salesforce, Apple, Google, and Amazon embed AI deeply into our work apps, vehicles, and personal devices—this will snowball in 2023 as AI is part of almost every digital experience in our lives.

Multicloud Accelerates

While 2022 was all about hybrid cloud, 2023 will see further shift from hybrid to multicloud. Organizations want to optimize their cloud usage by tapping into offerings from numerous providers like AWS, HPE, Google, Azure, Dell, Oracle, IBM (Red Hat), and more. This is becoming more and more normal as organizations want to leverage the best that is available on the market, at greater price efficiency—especially in a tougher macroenvironment.

Public cloud players have made their offerings more extensible over the last few years, offering that desired flexibility, especially to deal with redundancy, scalability, compliance, and other challenges that are multicloud favorable. This will continue as providers offer more open-source solutions and modular offerings that will make it easier to orchestrate workloads across the IT environment. And as enterprise organizations find success, this trend will only continue to grow. Which is a great transition to my last trend…

More Consumption Economics as XaaS Meets Economic Complexity

Last year, I predicted we would witness peak Everything-as-a-Service in 2022, and boy did we. Capital expenditures and overspending on unused software and infrastructure have been replaced by operational expenses that are purchased as needed. This has led to major company pivots like the one that HPE made with its GreenLake offering moving almost its entire portfolio to as a service. Other traditionally large capex hardware and software providers like Splunk, Cisco, and Dell have all done the same.

2023 will see this continue to grow. As we face a looming recession and organizations are slashing budgets and limiting expenditures, I think we are going to see more XaaS offerings. From multicloud offerings like I was just talking about, to security, and collaboration services. Pay as you go allows organizations to scale up and down as needed. As a result, tech companies — that are also struggling with reduced revenue and tempered guidance — are realizing the value in transitioning from licensing to more flexible offerings. It will be interesting to see though, how tech companies will position and market themselves to win that revenue.

While we will have to wait to see how the economy fluctuates in 2023 — and right now it’s not looking too good — I think the convenience of consumption models will continue to be the reason that we see XaaS offerings last, once the economy does eventually rebound.

Wrapping Up

Ten is never enough, and I can think of others that deserve at least an honorable mention. I’m certain that cybersecurity will be a hot commodity in 2023 as companies look to shore up their data environments. And speaking of data, we will almost certainly see a bigger focus on first-party data and consumer privacy. Quantum computing will continue to gain momentum and grow, albeit not primetime ready yet. And semiconductor companies will take this slowing period in chips and the economy to continue to innovate on process and manufacturing capacity to reduce the risk of another shortage.

2023 is setting up to be another fascinating year in technology and while markets continue to make us all a bit uneasy, it’s all but certain technology is our best path forward as we seek to return to the next period of economic growth.

Oracle NetSuite held its annual confab in Vegas recently. It was very well attended by both customers and partners. In fact, the place was abuzz with activity, side meetings, etc.  Everybody wanted to talk.

Of course, diginomica had several folks covering the event on the ground and some doing so virtually. As conferences go, the coverage was quite comprehensive and clearly indicated that travel to user conferences is moving back to pre-pandemic levels.

I’ll provide a brief recap of the relevant coverage below before I dive into the more subtle, underreported observations: you know the things you can’t get virtually but can pick up on in the hallways, expo floor, meals and numerous hallway interactions.

diginomica coverage

I kicked off the coverage with a pre-show piece in August. I thought I did a nice piece covering several new capabilities attendees would see at this month’s show. It’s actually a good, quick read on several items Oracle focused on. In particular, there was a discussion on the analytics warehouse functionality:

NetSuite customers will be able to probe externally sourced or internally generated datasets for all kinds of insights, many of which will be displayed via graphical means. This is important as mid-sized firms I’ve visited often possess mountains of ‘dark’ data: the data that they or their machines generate but no person or system looks at this information. The insights within this data are ignored as mid-sized firms often lack the tools, skills, computing power, integrations, visualization tools or ML tools to make sense of this.

Madeline picked up on the analytics warehouse and described how one customer, Studio McGee was using it:

Studio McGee is using NetSuite Analytics Warehouse (NSAW) to support its move into a new 325,000 square feet fulfillment center, which includes robots for picking and packaging that are integrated with NetSuite. The firm is combining its NetSuite and Shopify data in NSAW, and will be able to add information from Google Analytics and other systems.

Derek covered the main product announcements in this piece. Oracle NetSuite had big announcements in the areas of Accounts Payable (AP) automation, Configure Price Quote (CPQ), Ship Central and Workforce Management.  There’s actually a fair bit to unpack in those announcements.

Madeline filed an Oracle NetSuite customer story re: a UK startup firm and a study NetSuite has on this subject.  Madeline also penned a piece on NetSuite customer Thread. That story focused on Thread’s use of NetSuite to support expansion of its brick-and-mortar business. About Thread, she writes:

Going from a $30,000 Kickstarter startup to a $15m+ revenue organization, the firm realized it needed a more advanced platform to run its business and turned to Oracle NetSuite for its ERP and analytics. This was crucial for advancing plans to expand Thread’s wholesale business and brick and mortar stores, while still continuing to grow its direct-to-consumer business, which has been the largest revenue earner.

Product maturity growing more than NetSuite realizes?

I spoke with a number of customers, software partners and implementers at this event. It’s what I do. I was surprised at the complexity of the businesses these NetSuite customers have. In fact, many of the customers possessed several of these factors:

• There are businesses that are selling to; sourcing from; and/or, operating in multiple countries
• Many firms have several different operating companies, legal entities and/or businesses
• Many firms operate across channels. The retail customers are selling in every possible channel from direct sales, in-person sales, on-line sales, omnichannel, etc.
• Many firms have moved beyond their initial founders and have professional managers, new investors, private equity participation, are part of a holding company, etc.
• Many firms made a number of major, transformative shifts in their businesses during the pandemic and are continuing to change today.

If you thought NetSuite was an SMB only solution – it’s not!

The product line is deeper, wider and uses many advanced technologies (e.g., machine learning) it can get from parent company Oracle. Sure, NetSuite used to be this small, scrappy financial cloud solution called NetLedger that principally served small, straightforward businesses but that’s not necessarily the entirety of their customer base anymore.

No, NetSuite may be considerably more upmarket, more functionally capable as a mid-market product. I can’t decide if Oracle should market it more for the mid-market specifically (a space its JD Edwards and Fusion products serve) or as some sort of cloud product line that exists to help companies scale easily from startup to mid-size. This solution, in my opinion, is not a competitor to QuickBooks. It’s much, much more.

For example, global regulatory compliance functionality continues to grow in the NetSuite product line. NetSuite is also expanding the number of global cloud data centers that host the NetSuite application solutions.

So, I suspect most customers, partners, etc. at the event see or feel a lot of this phenomenon, too. They know the product line is more global, more capable and more functionally advanced than ever before. And, if they’re paying attention, they’ll wonder what’s going to happen next? Will NetSuite:

• Outgrow it original customers and possibly ignore them? (I seriously doubt this as customer retention seemed to be a major preoccupation with NetSuite leaders)
• Redeploy its product development resources away from ever greater upmarket capabilities and focus exclusively on vertical functional extensions? (I doubt this, too, and suspect the firm will do both. Vertical expansion was something several NetSuite executives did discuss but they also kept hammering home how they’ll use other Oracle advanced technologies to make back office, front office, fulfillment and other processes ever more productive, efficient and less labor intensive.)
• Compete more directly with other Oracle software solutions, like Fusion and JD Edwards? (This I believe will happen with greater frequency. Will this be an issue for Oracle? I doubt it. Oracle wins more deals if the short list contains nothing but Oracle products.)

To sum up this section, without anyone addressing the growing upmarket capabilities on display at the show, it was clear that the NetSuite product line is more capable than ever and must be considered in more up-market deals.

NetSuite and advanced technology

AKA Hire more people or get new technology

While all kinds and sizes of businesses these days seem to be struggling with the ability to attract and retain talent, small and mid-sized firms often face even more difficult challenges in the war for talent. These firms may not have the recruiting talent or resources to develop relationships with prospective jobseekers let alone get them hired or onboarded successfully.

This is important as small and mid-sized firms may never be able to offer the career paths and compensation that larger competitors can. So, the best approach for some of these smaller in stature firms may be to automate as much work as possible so as to minimize their dependency on an expensive, hard to source, develop and retain workforce.

Efficiency and low friction themes seemed to permeate the event and NetSuite executive messaging. NetSuite Founder Evan Goldberg flat out stated that NetSuite wants customers “to be as cost-effective as possible”.

NetSuite executives seemed to believe this to be a winning strategy for SMBs. This is why they are focusing much of their development energy on the use of advanced technologies in their applications. These technologies could include: artificial intelligence, chatbots, smart analytics, RPA, big data and more. They hope that these technologies could help in areas like process automation so that a process could become almost fully automated. This could significantly help reduce personnel needs in some process areas.

One example of this focus on highly efficient processes is the new Accounts Payable Automation functionality. These enhancements are part of Oracle/NetSuite’s broader strategy of “Optimizing Cash & Profits” for customers. It uses a number of technologies (e.g., process automation, exception handling, etc.) to make Accounts Payable processes extremely automated and efficient. NetSuite can support automated 2 or 3-way matching of vendor invoices. NetSuite partnered with financial services firm HSBC for some payment service options should a customer want to avail themselves of this.

One NetSuite customer using this new AP Automation capability reported going from having 45% of invoices being automatically processed to having 95% of invoice processing automated.

AKA Staff Scheduling

The scheduling optimization capability within the new Workforce Management tool should be a very welcome bit of functionality for retailers and health care organizations as it helps firms do a better job of scheduling workers. Why is this important? If you ask HR leaders in those industries what contributes to numerous Great Resignation and Quiet Quitting problems is that workers who genuinely want to work are being assigned hours that cause them personal strife or are insufficient in quantity for them to make a livable wage. And, operations leaders often struggle to put together a schedule using paper, spreadsheets and other less-than-optimal methods.

Nurses, for example, value the ability to influence their schedule more than most any other retention factor.  In retail, employees want to maximize their hours. Both groups want to work close to home and each may have young children or older parents to care for. The best scheduling tools remember what hours or days a person can work and which ones are off limits. The best tools also have mechanisms to help employers manage total payroll costs, minimize overtime, etc. A great scheduling tool is like a multi-variate optimization tool and an automated tool may be the best solution for such a complex and dynamic management problem. Why? The automated tool could handle hundreds of different variables simultaneously and solve the schedule problem in seconds compared to a sub-optimal solution that a manager might struggle with for days.

The scheduling optimization tech has its origins in a company called Adi Insights and will now be called SuitePeople Workforce Management. That deal was described as:

On May 6, 2022, Oracle announced that it has entered into an agreement to acquire Adi Insights. Adi Insights is a leading provider of workforce management solutions. The acquisition will bring overtime management, time capture, demand forecasting and shift scheduling capabilities to SuitePeople, NetSuite’s human resource management solution. The transaction is now closed and the Adi Insights team will join the Oracle NetSuite organization.

Partner Involvement

NetSuite has a number of partners. Some provide complementary applications while others offer integration technology, BPO (business process outsourcing), implementation services and other capabilities.

Given how critical partners are to completing the Whole Product (a Geoffrey Moore term) functionally, implementing the solutions, introducing the customer to NetSuite, etc., NetSuite would, obviously, want to stay on the good side of its partners. Great partners drive outsized net-new revenue, reduce customer acquisition costs, help in selling many add-on products, and more.

Several analysts at the show wondered how NetSuite’s new advanced Accounts Payable automation technology would be sold and would that cause channel conflicts with some of their partner firms who have been selling competing solutions to NetSuite customers for years.

More specifically, how will this product be sold since several other firms offer software that also provides AP automation? One NetSuite executive indicated that this is a huge market (after all NetSuite has approximately 32,000 existing customers) and NetSuite will only focus on selling it to customers/prospects that currently lack an AP automation solution. NetSuite will not be targeting the customer base of any of its automated AP solutions partners. And, a NetSuite executive also stated that they will respect whatever decision a customer makes re: AP automation whether they choose NetSuite’s or a partner’s product.  Bottom line: NetSuite doesn’t want to antagonize any of them.

Take out friction and make implementations fast & successful

Mid-market software buyers often possess many of the same business complexities of their larger competitors but don’t have the people, capital or other resources to match. My shorthand for this is that mid-market tech buyers have champagne tastes and beer budgets.

To make a mid-market buyer’s implementation a success, a great software solution must:

• Be pre-configured for many best practices, industry requirements, common reports, etc.
• Be easy to acquire. If the software agreement is measured in hundreds of pages, has embedded URLs, and requires a team of lawyers and procurement experts to redline, then this is not going to work.
• Already possess many required integrations, even those that aren’t part of a vendor’s product line.
• Do more than simply map old data into a new system.
• Provide thought-provoking new approaches to how processes should work so that the buyer can experience step change (not baby step) improvements in their business results.

One approach NetSuite previously rolled out to help with this was SuiteSuccess. SuiteSuccess was announced a couple of years ago. Its purpose is to help new customers get implemented in a timely but successful manner. The program is about more than just implementation speed though as customers can access configurators that include pre-supplied best practices.

I pressed a couple of NetSuite executives on the ‘success’ of this program. Evan Goldberg discussed how NetSuite doesn’t do product demonstrations vanilla anymore as they want to show the prospect how the software will look and behave with the most useful/relevant configurations (that are in the SuiteSuccess kits) already in place. That way, prospects can see exactly how the software will behave in their industry/company/function.

I’m very cautious re: programs like SuiteSuccess. The story is one many of you want to believe but many vendors conflate success with rapid implementation. These terms are not synonymous. In the rush to get a product implemented quickly, the vendor or systems integrator may simply map old data into the new system without taking the time to clean up bad business practices, reengineer poorly performing processes, clean up the chart of accounts, or, transform the mundane into something that delivers outsized competitive differentiation. In these rushed jobs, business value can get sacrificed in the quest for speed. Success should not be an either/or decision to make.

NetSuite, I can report, has these pre-built accelerators and they have also taken steps to remove friction throughout the sales and implementation process. At one point in the user conference, I asked a NetSuite senior executive to join me in the hall and we discussed the NetSuite contracting experience in detail. I had my contract redline notes from a pre-pandemic client gig handy and challenged him as to what they’ve done to mitigate earlier issues.

Time did not permit us to go through everything but I was convinced that the company did, in fact, shorten, simplify and made more reasonable its contracts. The company, for example, now has a third kind of licensed user: one that needs full access to only 1 or 2 modules but not every module. Previously, you could only be a full, all module access user or a read-only access user. Apparently, embedded links are mostly gone and the overall length of the contract is less than a dozen pages. All of this is good news as the typical NetSuite customer does not possess the budget, internal talent, etc. to mount an exhaustive contracting process with a software vendor. It costs too much and simply sours the prospect on a vendor.

More configuration please

I previously mentioned that Derek covered the new CPQ functionality in the NetSuite product line. This tool allows manufacturers and customers to use many of NetSuite’s existing manufacturing and web commerce applications to create a product whose needs exactly match a customer’s while also ensuring the finished product will have all needed components and that these will interoperate with each other. After the product is configured, the software components will inherit pricing and other attributes and these will flow into a price quote for the customer.

CPQ functionality has been a big deal in the MRP and web commerce space in recent years and this should find a lot of adoption within NetSuite’s customer base.

The CPQ (configure price quote) tool we saw at the show was clearly oriented for manufacturers although a couple of vendors on the expo floor were showing some CPQ tools for services firms, too. CPQ capabilities are definitely different for manufacturing versus service firms but many design capabilities can be shared. We’ll have to see when/if NetSuite wants to expand its CPQ functionality to the services arena. Personally, I’d expect them to either build or buy a solution here as they already possess a major PSA (professional services automation) product and a CPQ solution seems like a very logical and valuable product line extension for them to pursue.

Growing companies

I also chatted with some of NetSuite’s larger and more complex customers. These customers confirmed the applicability of NetSuite software in larger, growing entities. They also were users of several of NetSuite partner solutions (e.g., MineralTree, RFSmart, Curo, etc.).

Some of the conversations were notable as the companies are growing in significant organic or inorganic means. One of these companies is over 125 years old and not only navigated the pandemic well but also grew their firm and added new sales methods. Another firm continues to acquire new firms to add to its portfolio. As it does so, it implements NetSuite in these entities, drives process improvements and tries to implement shared services for the member firms. The product is definitely scalable.

We know some NetSuite customers fared well during the pandemic but how did NetSuite do? NetSuite founder, Evan Goldberg, mentioned that NetSuite actually does well during recessions. Companies realize during an economic downturn that they must become more productive and efficient. Old technology, paper/manual systems, spreadsheets and out of date processes are rarely ever desirable but can be toxic to a company during lean times.

Even if these customers were reluctant to share their financial results, you could deduce how much they’ve grown via other tells. For example, one executive discussed how his firm has upgraded its management team several times as it has traversed a couple of thresholds. His firm is good at knowing what every executive’s “Best Used By” date is and bringing in a more capable player at the right time.

Another interesting conversation course with these leaders concerned the growth in data these firms are experiencing. These businesses are acquiring new smart machine tools, capturing web metrics, using third party databases and installing sensors/meters/cameras everywhere. These devices are throwing off a lot of dark data: that is, the kind of data that a company has but isn’t using yet. These companies know this information could be a real asset of their firms but they’re not fully capitalizing on it just yet. This could be a real opportunity area for NetSuite as well.

My take

It’s interesting to see the NetSuite product line growing in functional sophistication and module breadth.  This is what enterprise-class vendors do. They add in more functional complexity to help their solutions move up-market.

Simultaneously, NetSuite is making it easier for prospective customers to do business with them via simpler contracts. They’re also making the product implementations more likely to deliver value the first time. These are things you often see when a vendor is trying to go down-market.

So, NetSuite appears to be bringing the best of the small business market/product/implementation world to an ever more sophisticated and powerful up-market solution. In effect, NetSuite is broadening its potential market opportunity. Too bad, its competitors do just the opposite (e.g., make simple products more complex to buy, implement and use).

There may be real value to this strategy. Value that’ll accrue to customers and Oracle shareholders alike.

Hello and welcome to Financial Face-off, a MarketWatch column where we help you weigh financial decisions. Our columnist will provide her verdict. Tell us whether you think she’s right in the comments. And please share your suggestions for future Financial Face-off columns by emailing our columnist at lalbrecht@marketwatch.com. 

Inflation is stuck in overdrive, a potential recession is hanging over our heads, and the Dow Jones Industrial Average and S&P 500 have both taken a dive this year. Many people are feeling understandably jittery about their finances. 

Monday, September 26, 2022

Is Powell Bent on Wrecking the US Economy? / Interest-Rates / US Federal Reserve Bank

By: MoneyMetals

Federal Reserve chairman Jerome Powell has taken a turn to the dark side.

After years of pleasing everyone on Wall Street and in Washington, D.C. with ultra-loose monetary policy, Powell has, for now, decided to recast himself as the villain. He now seems intent on crashing markets, killing jobs, and driving the economy into a deep recession in the name of fighting the inflation he helped unleash.

Saturday, August 20, 2022

Mixed Messaging from the Fed Causing Confusion in Markets / Interest-Rates / US Interest Rates

By: MoneyMetals

Precious metals markets are giving up ground this week as investors react to the latest musings from the Federal Reserve.

On Wednesday, the Fed released the minutes from its latest policy meeting. Officials acknowledged some of the warning signs of a weakening economy. That suggests they are likely to scale back future rate increases rather than implement additional 75 basis-point hikes.

But policymakers also admitted that inflation is still running uncomfortably high and seem poised to continue tightening to some extent.

Mixed messaging from the Fed caused confusion among investors. Some interpreted the Fed's comments as hawkish while others saw them as more dovish than expected. Perhaps central bankers themselves are confused and don't really know what they should be doing next.

Thursday, August 04, 2022

Should We Be Prepared For An Aggressive U.S. Fed In The Future? / Interest-Rates / US Interest Rates

By: Chris_Vermeulen

Traders expect the U.S. Fed to soften as Chairman Powell suggested they have reached a neutral rate with the last rate increase. The US stock markets started an upward trend after the last 75bp rate increase – expecting the U.S. Fed to move toward a more data-driven rate adjustment.

My research suggests the U.S. Federal Reserve has a much more difficult battle ahead related to inflation, global market concerns, and underlying global monetary function. Simply put, global central banks have printed too much money over the past 7+ years, and the eventual unwinding of this excess capital may take aggressive controls to tame.

Wednesday, August 03, 2022

The ‘Wishful Thinking’ Fed Is Anything But ‘Neutral’ / Interest-Rates / US Interest Rates

By: MoneyMetals

With last week’s second 75 basis-point rate hike, the Federal Reserve now claims it has achieved a “neutral” monetary policy stance. That would mean, in theory, that interest rates are neither stimulating nor restraining the economy.

"Now that we're at neutral, as the process goes on, at some point, it will be appropriate to slow down,” Fed Chairman Jerome Powell said.

Powell was effectively telling markets he intends to pivot away from inflation fighting.

Yet inflation, even when measured by the Fed's own preferred gauge, continues to run hot.

Saturday, July 09, 2022

Central Banks QT SCAM - Bank of England Set to DELETE UK Treasury Bonds off it's Balance Sheet / Interest-Rates / Quantitative Easing

By: Nadeem_Walayat

Just as the Bank of England handed most of the interest that the UK treasury pays on the Gilts it holds back to the TREASURY
So what do you think the Bank of England is going to do as maturing bonds are removed from it's balance sheet, I will tell you whats going to happnen, they are going to subvert QT so that most of the money the treasury pays the Bank of England on mautirng bonds is going to find it's way back to Treasury in a technical excercise of deleting maturing bonds off central banks balance sheet.

The only question market is will the clueless mainstream financial press be able to cotton on to the inflationary Weimer Republic money printing scam that the Bank of England and Treasury will be perpertruating or not?

Friday, July 08, 2022

The Fed Is Afraid of Inflation and Tightens Its Hawkish Stance / Interest-Rates / US Interest Rates

By: Arkadiusz_Sieron

Yesterday (July 6, 2022), the FOMC published the minutes from its last meeting, held in mid-June. Although the publication reveals no major surprises about US monetary policy, it shows rising worries within the Fed and also strengthens its hawkish rhetoric.

Why? First, the Committee’s members acknowledged that “the near-term inflation outlook had deteriorated since the time of the May meeting.” They also agreed that risks to inflation were skewed to the upside and that persistently high inflation could de-anchor inflation expectations:

Many participants judged that a significant risk now facing the Committee was that elevated inflation could become entrenched if the public began to question the resolve of the Committee to adjust the stance of policy as warranted. On this matter, participants stressed that appropriate firming of monetary policy, together with clear and effective communication, would be essential in restoring price stability.
Read full article... Read full article...

Sunday, July 03, 2022

Is the US Yield Curve Inversion Broken? / Interest-Rates / US Bonds

By: Nadeem_Walayat

The US has experienced 6 recessions over the past 40 years each of which were accompanied by an inversion of the 2 year and 10 year treasury bond yields an average of 18 months BEFORE the recession so whilst US yield curve inversions have proven to be a useful indicator in the past, though this time around inflation has been warning of a recession for a good 6 months before the US yield curve recently tentatively inverted sending MSM into a spin. Still the below chart does demonstrate that a yield curve inversion was imminent given that the interest rates have hit the down sloping trendline at which point yield curves tend to invert usually in advance of a recession which tends to typically follow 12 to 18 months after inversion, in terms of stocks and housing this implies downwards price pressure AHEAD of the recession rather than WITH the recession. But again all of the inversions of the past 20 years were during periods of LOW inflation.

Monday, June 27, 2022

Have US Bonds Bottomed? / Interest-Rates / US Bonds

By: Nadeem_Walayat

A patron asked if US bonds have bottomed / are cheap to buy now that inflation is 'peaking'.

Sunday, April 24, 2022

Will the Fed Raising interest Rates Cause a Recession? / Interest-Rates / US Interest Rates

By: Richard_Mills

A recession is what results when an economy stops growing. The National Bureau of Economic Research, the group entrusted to call the beginning and end dates of a recession, defines it as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.”

Economists define a recession as two consecutive quarters of decline in GDP, which is the total value of all goods and services a country produces.

We aren’t there yet, but the war between Russia and Ukraine has prompted a re-evaluation of the growth prospects for the world economy and some of the major players in it. According to CBC News, the International Monetary Fund is blaming the war for disrupting global commerce, pushing up oil prices, threatening food supplies and increasing uncertainty already heightened by the coronavirus.

The 190-country lender therefore slashed its global growth forecast to 3.6% this year and next.

Monday, April 18, 2022

The myth of PH’s bankruptcy and “Chinese debt slavery” / Interest-Rates / Asian Economies

By: Dan_Steinbock

In May 2017, Forbes released a column that claimed that “New Philippine Debt of $167 Billion Could Balloon To $452 Billion: China Will Benefit.” It was written by Anders Corr, who was portrayed as an “independent” geopolitical risk analyst.

“Over 10 years,” Corr boldly predicted, “that could balloon Philippines’ debt-to-GDP ratio as high as 296%, the highest in the world.” Fueled by expensive loans from China," he said, "Dutertenomics will put the Philippines into virtual debt bondage.”

At the time, I argued that Corr’s prediction was idiotic and up to 240-250 percentage points off. Yet, it was quoted widely both internationally and in the Philippines.  
Read full article... Read full article...

Saturday, April 16, 2022

Inflation pushes the 30-year Treasury bond yield through long-term moving average trends! / Interest-Rates / US Bonds

By: Gary_Tanashian

Okay, let’s take a breath. I don’t like to use ‘!’ in titles or even in articles. In fact, when I see too many of them I immediately think that someone really REALLY wants me to see their point. That said, the signal shown below is pretty important.

It’s in-month with a monstrously over-bearish bond sentiment backdrop similar to when we installed a red arrow on the chart below at the height of the Q1 2011 frenzy (cue the Bond King: “short the long bond!”). Chart jockeys are probably delivering the bad news of the chart’s inverted H&S, a potential for which NFTRH began managing a year ago when the 30yr yield hit our initial target of 2.5% and then recoiled as expected after the public became very concerned about inflation.

Friday, April 01, 2022

US Interest Rate Yield Curve 101 – Steep, Flat, Inverted – What’s The Difference? / Interest-Rates / Inverted Yield Curve

By: Chris_Vermeulen

The yield curve plots the current yield of a range of government notes and bonds in the “primary market.” The worldwide bond market – including private and government debt — currently represents about $120 trillion in outstanding obligations. The United States accounts for roughly $46 trillion (39%).

The U.S. government finances its spending by collecting taxes and issuing debt. More specifically, the U.S. Treasury funds deficit spending by issuing debt instruments with a range of maturities. 

• Treasury Bills have maturities from one month to one year.
• Treasury Notes have maturities from two to ten years.
• Very long-term debt is issued as Treasury Bonds with 20- and 30-year maturities. 

Friday, March 25, 2022

The Yield Curve flattener and a Coming Transition / Interest-Rates / Inverted Yield Curve

By: Gary_Tanashian

As the Yield Curve flattens, this inflation is different from the 2020 inflation

In 2020 an inflationary yield curve steepener was in the bag as the Fed dropped and pinned the Funds Rate and sucked up every bond it could get its hands on (in order to monetize/print). The bond market made the logical signals about the resulting inflation as the short end was pinned by a combination of Fed policy and the frightened, risk ‘off’ herds clustered in T-Bills and short-term Treasuries, relative to the long end.

Gold and then stocks picked up on it first, followed by commodities, which were tardy but are now the star performer late in the inflation cycle. Hmm…

Side Note: The most buyable looking chart in the lower panels? On this big picture, that would be gold.

Tuesday, February 15, 2022

US Treasury Bonds Not Reflecting Risks Like They Usually Do – Where’s The Beef? / Interest-Rates / US Bonds

By: Chris_Vermeulen

I’ve been paying close attention to Bonds as the global markets react to rising inflation and global central bank moves recently. The US Federal Reserve has yet to take any actions to raise rates, but we all know it will come at some point. Longer-term bonds are acting as if these risks are much more subdued than many traders/investors believe – which has me questioning if global central banks have overplayed the stimulus game?

Why would traditional safe-haven assets fail to act in a manner that reflects current market risks like they would typically do? Why have precious metals failed to reflect these risks also properly? Is there something brewing in traders’ minds that are muting or mitigating these traditional safe-haven assets?

Monday, February 14, 2022

What Fed Jawbones Mean for Business / Interest-Rates / US Interest Rates

By: Gary_Tanashian

And the Fed is listening.

[edit] After this post was published another Hawkish jawbone came in the form of James Bullard and a call for a larger rate hike in March. CME Group Fed Futures traders quickly adjusted their expectations to a .5% March hike at the behest of the Bullard jawbone. The point of my post is intact, and this heavy dose of expectations management may indeed result in .5% in March or it could be a shock absorber for the post’s original thesis, which is that a .25% hike could come sooner. The point I made at the end of the post still holds: “If the Fed is caught this far off guard, anything is possible”.

Monday, February 07, 2022

Powell the Pivoter Cannot Now Pivot Back to a Dove / Interest-Rates / US Interest Rates

By: Michael_Pento

The current Fed Chair is perhaps best known for his quick pivots from hawkish back to dovish and vice versa. Maybe he is just too dependent on the prevailing winds of the current economic data. Or, perhaps more accurately, he is most swayed by the performance of the stock market. In either case, Jerome Powell received more reasons to become hawkish just one day following his already hawkish FOMC press conference.

The Bureau of Economic Analysis reported Q4 2021 GDP growth at a 6.9% SAAR. This is a big problem for the Fed, since it falsely believes inflation comes from an economy that is growing too fast. Add in the 7% CPI print for December, and you have a Fed that now understands it is far behind the inflation curve and it's time to pivot towards an even tighter monetary policy stance. Nevertheless, the FOMC fails to grasp the rapid growth and inflation was engendered by unprecedented fiscal and monetary stimulus, which has now gone in reverse.

Sunday, February 06, 2022

New US National Debt Milestone Signals Currency Crisis Ahead / Interest-Rates / US Debt

By: MoneyMetals

The U.S. reached a $30 trillion milestone this week. Instead of signifying a great achievement, though, it serves as a dire warning for American workers, investors, and retirees.

On Tuesday, the Treasury Department reported that total public debt outstanding surpassed $30,000,000,000,000.

That’s a lot of zeroes. It amounts to $231,000 per household.

Interest on the debt currently costs taxpayers $900 million per day, or $330 billion per year. Enormous as that sum may seem, it is artificially low at present due to depressed interest rates.

Monday, December 27, 2021

Will Santa provide Us Interest Rate Hikes for 2022? / Interest-Rates / US Interest Rates

By: P_Radomski_CFA

If the Fed normalizes its balance sheet and markets freak-out, it will be a bridge too far. But interest rate hikes won’t crash a strong US economy.

With Fed officials increasingly hawked up, the narrative shifted from a tapering of asset purchases to potential interest rate hikes. And now, with whispers of the Fed plotting to normalize its balance sheet, questions have arisen over the potential impact on the PMs.

To explain, I wrote on Dec. 20:

After admitting that inflation “is alarmingly high, persistent, and has broadened to affect more categories of goods and services,” Waller implored the Fed to sell some of its bond holdings.

For context, tapering means that bonds are purchased at a slower pace or not at all. However, even zero purchases result in the Fed’s nearly $8.76 trillion in bond holdings remaining constant. Conversely, if the Fed reduces its balance sheet by selling bonds to private investors, it’s akin to a taper on steroids. Waller said:

“If we start doing some balance sheet runoff by summer, that’ll take some pressure off, you don’t have to raise rates quite as much. My view is we should start doing that by summer.”

Monday, December 20, 2021

Fed WAY behind Curve, Real Rates to Remain Deeply Negative / Interest-Rates / US Interest Rates

By: MoneyMetals

As the Federal Reserve prepares to taper its asset purchases, investors are preparing to adjust their portfolios.

Some are dumping gold. They could be making a big mistake.

Sentiment toward precious metals turned negative as prices fell over the past few weeks. Gold and silver markets continued to slide ahead of the Federal Reserve’s policy meeting on Wednesday.

However, they got a bounce following the Fed’s announcement that it would double the pace of tapering in 2022 and raise interest rates up to three times.

Saturday, December 18, 2021

Fed Interest Rate Actions 1999 to Present – Stock Market What’s Next? / Interest-Rates / Financial Markets 2021

By: Chris_Vermeulen

Let’s continue to explore the past 20 years of US Fed actions. I believe the US Fed has created a global expansion of both economies and debts/liabilities that may become somewhat painful for foreign nations – and possibly the US.

Reading The Data & What To Expect in 2022 And Beyond

In the first part of this research article, I highlighted the past 25 years of US Fed actions related to the DOT COM bubble, the 9/11 terrorist attack, the 2008-09 US Housing/Credit crisis, and the recent COVID-19 virus event. Each time, the US Federal reserve had attempted to raise interest rates before these crisis events – only to be forced to lower interest rates as the US economy contracted with each unique disruption. The US Fed was taking what it believed were necessary steps to protect the US economy and support the global economy into a recovery period.

When Impact Health's revenue exploded, CFO Jen Herdler navigated nursing staff needs that grew from 300 to more than 20,000 nationwide.

This article is part of a series sponsored by HLTH highlighting syllabus that will be discussed at the HLTH conference November 13-16 in Las Vegas. Register today.

Remote patient monitoring is one of the syllabus of discussion at the upcoming HLTH conference at The Venetian Expo in Las Vegas scheduled for November 13-16. In response to emailed questions, executives from Biofourmis, Force Therapeutics and Ronin shared products they’re developing in remote patient monitoring as part of the broader hospital at home trend. They also shared emerging applications in this space as well as some of the challenges they face.

The Centers for Medicare and Medicaid Services introduced the Acute Hospital Care at Home program in 2020 as a way of addressing the Covid-19 pandemic while expanding flexibility of hospitals to care for Medicare patients beyond their physical facilities. As of the end of September, the list of approved organizations included 114 health systems, 256 hospitals in 37 states. 

Biofourmis CEO and Founder Kuldeep Singh Rajput said Brigham and Women’s Hospital, a participant in this program, harnessed the company’s remote patient monitoring Care@Home platform in a clinical study to reduce admissions by 70% with a 40% cost reduction. The Care@Home platform is also getting a test drive as part of a three-year clinical study of the Rural Home Hospital project with Blessing Health System and Appalachian Regional Healthcare — a joint venture between Brigham and Women’s Hospital and the Harvard T.H. Chan School of Public Health.

Remote patient monitoring tools have also generated interest from pharmaceutical companies that view remote patient monitoring as a way to support decentralized clinical trials. Clinical trial recruitment is a huge and costly challenge for pharma companies, with some studies taking up to one year to recruit enough patients. Decentralized clinical trials enable people to take part in clinical studies with limited  interruption to their jobs and home life, which could play a role in speeding up recruitment and reducing drop-out rates.

Chronic conditions

Rajput said the initial focus of Biofourmis was to support the management of cardiometabolic conditions such as heart failure.

“We soon realized that our platform—which remotely collects numerous vital signs using wearable biosensors to predict health trajectories using smart, artificial-intelligence-powered algorithms—could help manage other diseases such as respiratory conditions, infectious disease and cancer.”

Rajput describes the company’s approach as remote patient management — a more personalized and predictive approach than “monitoring”. It includes applying AI-based analytics and machine learning to patient data for earlier interventions and better outcomes. 

“Heart failure is one of the most compelling use cases for remote patient management because it’s a notoriously difficult to treat condition, and our solution can get more patients to optimal treatment targets more quickly. Heart failure is the leading cause of hospitalization for patients aged 65 and older, while over 50% of patients with heart failure die within five years of diagnosis. Despite these concerning statistics, only about 25% of heart failure patients are on guideline-directed medical therapy for heart failure, and only 1% are receiving optimal therapy.”

Sleep

“We recently completed a research study on how sleep impacts patient recovery,” said Bronwyn Spira, CEO and founder of Force Therapeutics, which formally moved into remote patient monitoring earlier this year. “The data from that study helped orthopedic physicians proactively educate and treat patients with sleep disturbances when recovering from a surgical procedure. While it seems intuitive, presenting the data around the impact and prevalence of sleep disturbances compelled care teams to take action when sleep disturbances were flagged in our patient monitoring platform and, as such, Boost the recovery journey of thousands of patients.”

Cancer

Project Ronin remotely detects, evaluates, and proactively manages patient symptoms associated with cancer treatment to reduce patient suffering, Boost care provider efficiency and outcomes. Oracle founder Larry Ellison is among Ronin’s co-founders.

Kathy Ford, chief product and strategy officer, noted that the symptom management solution is designed to help cancer care teams remotely monitor, manage, and proactively course-correct patients receiving cancer treatment. It also helps them engage and educate patients in their care. One of the company’s goals is to reduce emergency department visits by better managing patient’s side effects from cancer care.

“Patients undergoing cancer treatment often experience severe side effects that, if unreported and unaddressed, can lead to harmful adverse events, costly trips to the emergency room, and discontinued treatment,” Ford said. “Moreover, anxiety and confusion about symptoms lead patients to inundate busy care teams with countless phone calls and messages. Unfortunately, because most of the cancer journey occurs outside of the hospital, these unmonitored and unengaged patients are beyond the reach of clinicians who might otherwise intervene, course-correct, and provide critical support.”

Challenges

From Spira’s perspective, patient and clinician engagement are among the biggest challenges for advancing remote patient monitoring.

Balancing the need to deliver timely insights to clinicians without disrupting their workflow presents a unique set of challenges that each remote patient monitoring business needs to address before providers adopt these tools, according to Ford.

Disparate hospital IT systems can be a vexing issue standing in the way of adoption, Rajput observed. Clinical staffing shortages are another obstacle standing in the way of adoption.

“Hospitals and health systems often ask us how they can staff care-at-home programs when they struggle to cover all their shifts and on-call needs for in-person care,” said Rajput. “That is why many leading organizations with hospital-at-home programs are working with technology-enabled care delivery providers that offer remote, multispecialty clinical care teams that can offload some of the time-consuming management duties.”

Photo: Maria Symchych-Navrotska, Getty Images

The Department of Veterans Affairs has further delayed from January to June 2023 the upcoming deployments of the Oracle Cerner electronic health record system to review and address technical and system performance issues facing VA health care personnel and veterans.

Some of the additional concerns identified are problems with patient scheduling, medication management and referrals and latency and slowness, VA said Thursday.

“We are delaying all future deployments of the new EHR while we fully assess performance and address every concern. Veterans and clinicians deserve a seamless, modernized health record system, and we will not rest until they get it,” said Donald Remy, deputy secretary of VA.

VA said it will continue to work with Oracle Cerner to address issues with the EHR system before resuming deployments at other medical centers, including those that may have implications for patient safety.

As it implements the “assess and address plan,” the department will continue to monitor the five VA facilities where the new EHR system has already been fielded to ensure that the platform is running smoothly in support of veterans.

In 2018, Cerner, which is now part of Oracle following its acquisition in June, received a potential $10 billion contract to help VA replace its Veterans Health Information Systems and Technology Architecture with a modernized EHR system that integrates with that of the Department of Defense.