Stock market traders wishing for rate cuts will be disappointed Published by Hilliard MacBeth on Sep 22, 2023 The U.S. stock market sold off this week after the Federal Reserve announced that rates will have to stay higher for longer. But the stock market should be careful what it wishes for. The record shows clearly that rate cuts are usually bad for the stock... Read more
A Minsky moment for Canada has arrived Published by Hilliard MacBeth on Sep 15, 2023 Canada’s Minsky Moment has arrived, as the demand for new credit slows and a substantial portion of household mortgage borrowers are not paying the interest on their debt, much less repaying the principal. Hyman Minsky was an American economist who focused... Read more
The Bank of Canada pauses but rate cuts are not coming soon Published by Hilliard MacBeth on Sep 08, 2023 The Bank of Canada goes on hold, with no rate hike this week. But those expecting significant interest rate cuts any time soon will be disappointed. The end of the multi-decade period of declining rates passed without much fanfare. But rates in Canada... Read more
Crude oil demand will suffer as transport goes electric Published by Hilliard MacBeth on Sep 01, 2023 While the world’s crude oil consumption will soon start to decline, many investors expect there will be robust demand for crude oil for decades to come. But it is not too early to analyze the impact of declining demand for crude oil when choosing long-term... Read more
Solar energy capacity for electricity production soars worldwide Published by Hilliard MacBeth on Aug 25, 2023 The pace of installations for new solar electricity production continues to surprise everyone, even industry insiders. Close to 400 gigawatts of capacity will be installed worldwide in 2023, with forecasts for as much as 563 gigawatts in 2025. Solar is... Read more
Inflation moderates but still could bite hard Published by Hilliard MacBeth on Aug 18, 2023 Inflation, as measured by the U.S. CPI, moderated in July. The headline measure was recorded as 3.2 percent from a year ago, while the closely watched core CPI was a more troublesome 4.7 percent. Is inflation beaten yet? In the mid-1970s a concentrated... Read more
Deflation risk in China is real Published by Hilliard MacBeth on Aug 11, 2023 The risk of deflation in China is real. A moderating pace of growth, large private sector debts and a slowdown in the crucial property sector suggest lower income, prices and deflation. Is China entering a debt deflation spiral? China has enjoyed a longer-than-four-decades... Read more
Ratings agency downgrades US debt triggering widespread criticism Published by Hilliard MacBeth on Aug 04, 2023 The U.S. government bonds were downgraded a notch by the ratings agency, Fitch. This means the safety of the US treasuries has slipped and there is growing concern about the longer-term outlook for debt. Is the U.S. government at risk of default? Economists... Read more
The Federal Reserve hikes rates again Published by Hilliard MacBeth on Jul 28, 2023 The Federal Reserve hiked interest rates again, to 5.25 percent to 5.5 percent. This is the highest Federal Funds rate in 22 years. The Fed has stated that it is determined to wrestle inflation back under control, which means getting to its 2 percent... Read more
China property market struggles with debt bubble Published by Hilliard MacBeth on Jul 21, 2023 China began a new stage in its multi-year struggle with insolvency among property developers. One of the biggest, China Evergrande, reported losses of US$81 billion this week. Will massive debts of US$207 billion dollars in the property sector drag China... Read more