Inflation Data Overview - The Consumer Price Index (CPI) rose by 2.7% in November, lower than Wall Street's expectation of 3.1% [2] - Core inflation, excluding food and energy prices, was reported at 2.6%, compared to estimates of 3% [2] - Over the two-month period since September, both headline and core CPI increased by only 0.2% [3] Impact of Government Shutdown - The recent inflation data may not significantly alter the Federal Reserve's outlook due to data collection disruptions caused by the government shutdown [1][4] - The shutdown halted much of the price data collection by the Bureau of Labor Statistics, leading to skepticism about the reliability of the current inflation figures [2][4] Economic Perspectives - Economists view the latest inflation reading as progress towards the Federal Reserve's 2% inflation target, despite still being above the target [5] - The Fed is in a "wait-and-see" mode, with the latest data potentially opening the door for additional rate cuts [6] Sector-Specific Insights - A decline in rents contributed to the overall decrease in inflation, while core goods prices rose by 1.4% due to tariffs [7] - Services inflation, excluding energy prices, increased by 3%, down from 3.5% since September, indicating a trend that the Fed is closely monitoring [7] - Fed Governor Stephen Miran supports the view that lower rents can lead to reduced inflation, which may mitigate the impact of tariffs [8]

Core Insights - Barrick Mining Corporation and Agnico Eagle Mines Limited are leading gold producers benefiting from rising gold prices driven by geopolitical tensions and interest rate cuts [1][2][3] Gold Market Overview - Gold prices have surged approximately 65% this year, currently exceeding $4,300 per ton, influenced by global trade tensions and central bank gold accumulation [2][3] - The Federal Reserve's interest rate cuts and expectations of further reductions amid U.S. economic concerns have contributed to the bullish trend in gold prices [2][3] Barrick Mining Corporation - Barrick is advancing key growth projects, including Goldrush, Pueblo Viejo expansion, and Reko Diq, which are expected to significantly boost production [4][5][6] - The Goldrush mine aims for 400,000 ounces of annual production by 2028, while the Reko Diq project is projected to produce 460,000 tons of copper and 520,000 ounces of gold annually [5] - Barrick's liquidity is strong, with cash and equivalents around $5 billion and operating cash flows of approximately $2.4 billion in Q3 2025, marking a 105% year-over-year increase [7] - The company returned $1.2 billion to shareholders in 2024 through dividends and share repurchases, with a dividend yield of 1.6% and a payout ratio of 32% [8][9] Agnico Eagle Mines Limited - Agnico Eagle is focused on growth projects like Odyssey, Detour Lake, and Hope Bay, which are expected to enhance production and cash flows [10][11] - The Hope Bay Project has proven reserves of 3.4 million ounces and is anticipated to generate significant cash flow [11] - AEM's operating cash flow was approximately $1.8 billion in Q3 2025, a 67% increase from the previous year, with free cash flow nearly doubling to $1.2 billion [14][15] - AEM has a low long-term debt-to-capitalization ratio of around 1.2% and a dividend yield of 1% with a payout ratio of 23% [16] Comparative Performance - Barrick's stock has increased by 105.2% in the past six months, while Agnico Eagle's stock has risen by 36.6%, compared to the industry average increase of 56.9% [17] - Barrick trades at a forward earnings multiple of 12.99, slightly below the industry average, while AEM trades at a premium with a multiple of 17.88 [19][21] - The Zacks Consensus Estimate projects Barrick's 2025 sales and EPS to rise by 21.8% and 77.8%, respectively, while AEM's estimates imply growth of 34.4% and 83.9% [23][24] - AEM's return on equity stands at 15.6%, higher than Barrick's 9.5%, indicating more efficient use of shareholder funds [25] Investment Outlook - Both Barrick and Agnico Eagle are well-positioned to benefit from the strong gold price environment, with solid financial health and growth prospects [27] - AEM's higher growth projections and lower leverage suggest it may offer better investment opportunities in the current market [27]

You can find original article here WealthManagement. Subscribe to our free daily WealthManagement newsletters. (Bloomberg) -- Deals in the wealth management space surged in the third quarter and are expected to continue climbing in the new year. Mergers and acquisitions in the sector jumped 15% compared to the prior quarter, according to a report from PwC. Wealth management deals comprised the bulk of that increase, rising 27% in the period. Reduced financing costs due to the Federal Reserve’s rat ...

Group 1: Dollar Index and Market Reactions - The dollar index (DXY00) is up by +0.17%, driven by weakness in GBP/USD and the yen, as UK consumer prices rose less than expected and Japanese fiscal concerns weigh on the yen [1] - The dollar is under pressure due to the Fed's liquidity boost, with the central bank purchasing $40 billion a month in T-bills starting last Friday [2] - Markets are concerned about President Trump's potential appointment of a dovish Fed Chair, which could negatively impact the dollar [2] Group 2: Federal Reserve Insights - Fed Governor Christopher Waller described the US labor market as "pretty soft" with close to zero job growth, while inflation remains "pretty well anchored" around 2% [3] - Interest rates are still 50-100 basis points above neutral, allowing the Fed to lower them steadily without urgency [3] - The market is pricing in a 24% chance that the FOMC will cut the fed funds target range by 25 basis points at the upcoming January 27-28 meeting [3] Group 3: Eurozone Economic Indicators - The euro (EUR/USD) is down by -0.04% due to a stronger dollar and negative Eurozone economic news, including a downward revision of November CPI and the smallest increase in Q3 labor costs in three years [4] - The unexpected decline in the German December IFO business conditions survey to a 7-month low is also bearish for the euro [4] - Divergent central bank policies support the euro, as the Fed is expected to continue cutting rates while the ECB is seen to have completed its rate-cutting campaign [5] - Eurozone November CPI was revised downward to +2.1% year-on-year from +2.2% year-on-year [5]

Core Insights - The U.S. bond market has shown resilience and record-breaking activity in 2025, with the Bloomberg US Aggregate Bond Index returning approximately 7.1% year to date, highlighting the importance of fixed income in investment portfolios [1][10] Bond ETF Market Performance - Bond ETFs captured about one-third of the nearly $1 trillion that flowed into all ETFs in 2025, indicating a significant increase in investor interest, particularly in passively managed ETFs [2][10] - The performance of bond ETFs was influenced by attractive starting yields due to the Federal Reserve's rate cuts totaling 175 basis points since September 2024, which left yields relatively high [6][10] - Market volatility and demand for liquidity during uncertain periods, such as tariff-driven uncertainty, enhanced the appeal of bond ETFs as they provided intraday pricing and liquidity [7] - Actively managed bond ETFs experienced explosive growth, capturing over $100 billion in flows, which accounted for 40% of all fixed income ETF flows as of September 2025 [8] - The normalization of the yield curve attracted significant capital into intermediate and long-term bond ETFs, as investors sought to lock in higher yields [9] 2026 Outlook for Bond ETFs - The outlook for bond ETFs in 2026 is cautiously optimistic, driven by expected interest rate cuts that typically boost bond prices, creating opportunities for income and diversification [11] - Persistent volatility due to inflation and uneven growth suggests that flexible, active management strategies will be favored to navigate credit risk and shifting rates [11] - A well-constructed actively managed portfolio of intermediate maturity bonds may offer capital appreciation and inflation-beating returns in 2026 [12] Recommended Bond ETFs for 2026 - Schwab Core Bond ETF (SCCR) has assets of $1.07 billion, gained 6.2% year to date, and charges 16 basis points in fees [14] - Vanguard Core Bond ETF (VCRB) has assets of $4.8 billion, gained 7.4% year to date, and charges 10 basis points in fees [15] - JPMorgan Active Bond ETF (JBND) has assets of $4.7 billion, surged 8% year to date, and charges 25 basis points in fees [16]

Core Viewpoint - The real estate investment trust (REIT) sector is experiencing a downturn in 2025, but there is potential for recovery in 2026 as interest rates are expected to decline, which could enhance REIT valuations and make them attractive investments [1][13]. Group 1: Current Performance and Challenges - The S&P U.S. REIT Index has declined by nearly 5% year-to-date in 2025, continuing a trend of lackluster performance in recent years [1]. - Higher interest rates negatively impact property values and increase borrowing costs, making REITs less attractive compared to fixed-income securities [3][6]. - The correlation between interest rates and REIT returns shows that REIT share prices rose sharply in 2021 when rates were near zero, but declined in 2022 and remained low through much of 2024 as rates surged [6][4]. Group 2: Future Outlook for Interest Rates - The Federal Reserve has recently lowered its target rate by 0.25% to a range of 3.5%-3.75%, with expectations for further cuts in the coming year [6][7]. - Investors anticipate at least two more rate cuts, and there is political pressure for rates to drop below 1% next year, which could lead to a new Fed Chair more amenable to additional cuts [7]. Group 3: Potential Beneficiaries of Lower Rates - REITs with higher-yielding dividends are expected to benefit the most from falling interest rates, potentially leading to higher total returns for investors [8]. - The average dividend yield across the REIT sector is around 4%, while many net lease REITs have yields above 5.5%, indicating a strong position for these investments [9]. - VICI Properties, a REIT focused on casinos, currently yields 6.3% and has a strong growth rate in dividends, positioning it well for expansion if rates decline [10]. - Realty Income, yielding 5.6%, has diversified its investments and continues to increase its dividends, which could accelerate with lower rates [12]. Group 4: Investment Considerations for 2026 - REITs have historically been strong long-term investments, and a significant reduction in interest rates could revitalize the sector, particularly for those with higher yields like VICI Properties and Realty Income [13].

Core Viewpoint - The Federal Reserve Governor Stephen Myron dissented at the recent Fed meeting, advocating for steeper rate cuts due to concerns about tight monetary policy and its potential negative impact on the labor market and unemployment rates [1][2][4]. Inflation Analysis - Myron believes that underlying inflation is closer to the Fed's target than reported, arguing that the current inflation metrics are distorted by measurement quirks, particularly in the housing market and imputed prices for non-market services [3][5][8]. - He highlights that housing inflation is lagging due to the way rents are calculated, which does not reflect current market conditions, and anticipates a downward convergence in inflation as market rents have been growing at about a 1% rate for several years [6][7][14]. - Myron points out that portfolio management fees have contributed significantly to inflation metrics, despite being in a long-term downward trend, suggesting that these measurement issues should not dictate monetary policy [9][11][32]. Labor Market Concerns - The labor market is showing signs of weakness, with the unemployment rate ticking up, but Myron argues that the overall labor market remains in a good place and is not under severe stress [22][24][34]. - He emphasizes the need for the Fed to focus on employment rather than economic growth, as Congress has directed, and expresses concern that maintaining tight policy could lead to a weaker labor market in the future [22][27]. Monetary Policy Outlook - Myron advocates for a forward-looking monetary policy approach, suggesting that the Fed should make decisions based on forecasts rather than solely on current data, due to the inherent lags in monetary policy effects [58]. - He expresses that if the current trajectory of inflation and the labor market continues, the Fed could face significant challenges by 2027 if policy remains too tight [27][25]. Market Reactions - Myron acknowledges that while the Fed is cutting rates, market rates, particularly long-term rates, have not reflected these cuts, keeping mortgage rates high [35][36]. - He anticipates that long-term rates will eventually decline alongside short-term rates, despite some skepticism in the market regarding the impact of rate cuts [37][38].

Market Overview - Major U.S. index futures indicate a higher open on Monday, suggesting a potential recovery from last Friday's significant weakness, particularly in tech stocks [1] - Trading activity may remain subdued as traders anticipate key U.S. economic data releases in the coming days [1] Economic Data Releases - The monthly jobs report for November and October retail sales data are set to be released on Tuesday, while consumer price inflation data for November is scheduled for Thursday [2] - These reports could influence the outlook for interest rates following the Federal Reserve's recent monetary policy announcement, which included a quarter-point rate cut [2] Stock Market Performance - On Friday, stocks experienced a notable decline, with the Nasdaq dropping 398.69 points (1.7%) to 23,195.17 and the S&P 500 falling 73.59 points (1.1%) to 6,827.41 [3] - The Dow posted a more modest loss of 245.96 points (0.5%) to 48,458.05 after reaching a new record intraday high earlier in the session [4] - For the week, the Dow increased by 1.1%, while the S&P 500 decreased by 0.6% and the Nasdaq fell by 1.6% [4] Sector Performance - Broadcom (AVGO) led the tech sector lower, plunging over 11% despite reporting better-than-expected fiscal fourth-quarter results and providing positive guidance [5] - Other tech stocks, including Micron Technology (MU), Oracle, AMD, and Nvidia, also saw significant declines, indicating a continued rotation out of tech stocks [5] - The NYSE Arca Computer Hardware Index experienced a 5.2% drop, reflecting poor performance in computer hardware stocks [7] International Market Reactions - Asian stocks fell as investors expressed concerns over tech valuations and reacted to disappointing economic data from China [10] - Chinese industrial production grew 4.8% year-on-year in November, missing forecasts, while retail sales rose only 1.3%, significantly below expectations [12] - The Japanese market also declined, with the Nikkei 225 Index dropping 1.3% amid concerns over tech share valuations [13] European Market Trends - European stocks mostly moved higher ahead of a busy week for U.S. economic data and central bank decisions, with the German DAX Index up by 0.3% and the U.K.'s FTSE 100 Index rising by 1.0% [18][19] - However, technology company Royal Philips and pharmaceutical firm Sanofi faced declines due to corporate news impacting their stock prices [19][20]

Core Viewpoint - RH, formerly known as Restoration Hardware, has faced significant challenges and volatility in its stock performance due to economic conditions, interest rate changes, and aggressive expansion plans by CEO Gary Freeman [1][2][4][5]. Company Performance - The company reported a revenue increase of 9% year-over-year, although earnings fell by 31% compared to the previous year, which was below market expectations [9][10]. - Free cash flow improved significantly to $83 million from a negative $96 million the previous year, indicating a healthier cash position [10]. - For the current quarter, RH expects revenue growth of 7-8%, which is below the 10% anticipated by Wall Street [11]. Market Conditions - The housing market remains weak, described as the worst in nearly 50 years, impacting consumer sentiment and demand for high-end home goods [12][15]. - The company has been affected by higher tariff expenses and increased construction costs since the pandemic, which have pressured profit margins [13][15]. Strategic Outlook - CEO Gary Freeman remains optimistic about RH's market position, claiming the company is gaining market share despite challenging conditions [12]. - The company is pursuing an aggressive expansion strategy, including a notable new location in Paris, which Freeman believes will enhance RH's brand presence [14][16]. - Analysts express mixed views on RH's long-term prospects, with some downgrading the stock due to concerns over valuation and market conditions [17][18]. Investment Considerations - RH is viewed as a high-risk, high-reward investment, heavily reliant on a potential recovery in the housing market and favorable interest rate conditions [19][20]. - The stock has shown volatility, with significant price movements following earnings reports and market sentiment shifts [8][17].

Inflation Trends - The inflation rate has remained above the 2% target for four and a half years, with recent data indicating a 3% inflation rate for services in the first half of the year and 3.5% in the last three months before a significant event [1][2] - Concerns have been raised about persistent inflation, which is not primarily driven by tariffs, indicating a potential long-term issue [2] Economic Outlook - The company believes that if the current uncertainties are resolved, interest rates could decrease significantly from their current levels, but caution is advised due to ongoing inflation above target levels [3] - There is a sentiment that waiting for more data before making decisions would be prudent, especially with the expectation of receiving substantial information in Q1 of 2026 [4][6] Labor Market Analysis - The labor market shows signs of stability, with low layoff rates and a rising job openings rate, which are characteristics of a strong job market rather than a recession [7][8] - Despite some cooling in the hiring rate, the overall job market indicators suggest that it is not in a state of decline, providing confidence in the economic outlook [7][8] Decision-Making Considerations - The company suggests that a more cautious approach to rate cuts is warranted until there is clear evidence that inflation is decreasing [9]