Articles by Jia Liu, PhD
Stocks are well known for their high volatility. Stocks respond to financial, economic, and political events in real time. The recent Brexit vote, for example, caused a sharp drop in stock prices. But the U.S. stock market was able to rebound in several days. Going forward, it is certain that stock markets will be sensitive to events like the upcoming Federal Open Market Committee meeting (July 26-27), the ongoing presidential election, oil shocks, and so on. But it is far from certain whether we can predict future stock returns. However, an index, called VIX, may surprise investors.
The disappointing performance of the global financial markets this year has left many investors looking for better opportunities. Therefore, an investment like Bitcoin may catch their eyes. After all, its price has jumped from about $430 in January to about $660 today (July 14), a growth rate of slightly more than 50 percent
The Labor Market Conditions Index has fallen into negative territory, and continued to fall since January this year. This indicates that the labor market may be worse as a whole than the individual measures show. The disappointing May jobs report may be not an outlier, but may instead be starting to capture a worsening labor market.
People predict future inflation in many decisions they make, from taking out a car loan or a mortgage, to deciding whether to put money in CDs, bonds, or stocks. Future inflation is also important for the expected profitability of business investment projects.
When governments spend more money than they bring in, they create budget deficits.
The market strongly expected that the Fed would hold interest rates steady in its April meeting. The result was consistent with public expectation. Now the bigger question is whether a rate increase will occur in June, the next FOMC meeting with a news conference and a release of economic projections.
Consumer prices in March, released today, showed weaker-than-expected growth. The headline Consumer Price Index rose 0.1 percent in March from February. Even though it is the fastest monthly growth since December 2015, it was lower than economists’ expectations.