Macroeconomics of Rising Interest Rates

The prospect of a Federal Reserve rate hike is driving up the US dollar. The rising US dollar has a significant impact on the US economy and thus stock market. It’s important that traders understand the implications of a rising US dollar from a macroeconomic perspective.
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Question On Dividend Paying Income Fund

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Guess Who Is On Trump’s Economic Team, SWEET!

Do you remember when the WSJ, CNN, CNBC, NBC, ABC, CBS, Bloomberg, Forbes, and Reuters ran stories at the start of the year about how no one even knows who was advising Trump on economic matters? They even went as far to say that Trump had no support of any economists.
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Macroeconomics Of Rent Control

California, New Jersey, and New York have the most cities with rent control. Sanctuary cities in California like San Francisco and Los Angeles have some of the toughest rent controls. Rent controls hurt the local economy and make rental unit availability worse. Aggregate deadweight loss from rent controls across the country negatively impacts the US economy and hence stock market. Let’s examine what happens with rent control from a macroeconomics perspective.

In a free, non-rent controlled market, the price of rent is established by the market where the supply and demand curves cross.
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Inflation Expectations On The Rise Shifts Aggregate Demand Outward

Inflationary expectations are the expectations that consumers have concerning future inflation. If buyers expect higher prices in the future, they increase their demand in the present. This shifts the aggregate demand curve outward (to the right) which is good for the economy. For example, if the price of a house is expected to be higher next year, consumers decide not to wait, but to buy now. The increase in inflationary expectations causes an increase in consumption expenditures and subsequently an increase in aggregate demand.
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Great Panther Silver Exploding Twiggs Money Flow

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US Jobs and Holiday Hiring Stronger This Year

Temporary holiday season hiring in the US is stronger this year than in previous years. Employers having a higher demand for temp workers for the holiday season is a bullish signal for the US economy.

The WSJ writes

“Five years ago we could find a lot of professional-level people that didn’t have a job,” said Kelly Purves, vice president of BevMo human resources. “Now there’s a lot less people in that position.”

I don’t think that stronger holiday season demand for temporary workers is going to impact whether the Federal Reserve hikes rates in December. I think the bigger news is just how tight this labor market is. I’m hearing more and more from employers that it’s hard to find good help these days. Anyone who wanted a job and has talent has already been hired.

Microeconomics and Taxation

Most government revenue comes from the taxation of transactions and labor. Taxes impact both the supply and demand curves. Taxes cause a buyer to pay more for something and suppliers to receive less. The loss of value for both buyers and sellers is called the deadweight loss of taxation. Taxation has an enormous impact on the economy and thus stock market. Traders and investors need to understand the effects that taxation has on the economy and thus stock market. We will examine deadweight loss from a microeconomics perspective, ending with a macroeconomics viewpoint.

In a market without taxation, we will say that a package of socks will sell at a fair market price of $14. This $14 equilibrium price is set where the supply and demand curves cross.
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