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US economy defies recession fears with strong second-quarter performance
July 27, 2023--Second-quarter GDP increases at 2.4% rate
Consumer spending slows, but pace still solid
Business investment picks up on equipment rebound
Weekly jobless claims fall 7,000 to 221,000
The U.S. economy grew faster than expected in the second quarter as a resilient labor market supported consumer spending, while businesses boosted investment in equipment and built more factories, potentially keeping a much-feared recession at bay.
Despite the broad-based acceleration in growth reported by the Commerce Department on Thursday, inflation subsided considerably last quarter, with one of the key measures tracked by the Federal Reserve for its 2% target posting its slowest increase in more than two years.
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Source: reuters.com
CBO-An Update to the Economic Outlook: 2023 to 2025
Summary
In CBO's latest projections, economic growth slows and then picks up over the 2023-2025 period. That initial slowdown in economic growth drives up unemployment. Inflation continues to gradually decline.
The Congressional Budget Office periodically updates its economic forecast to ensure that its projections reflect recent economic developments and current law.
This report provides details about CBO's most recent projections of the economy through 2025, which reflect economic developments as of June 22, 2023.
Over the 2023-2025 period, in CBO's latest projections:
Economic growth slows and then picks up. The growth of real (inflation-adjusted) gross domestic product (GDP) slows to a 0.4 percent annual rate during the second half of 2023; for the year as a whole, real GDP increases by 0.9 percent. After 2023, growth accelerates as monetary policy eases. Real GDP increases by 1.5 percent in 2024 and by 2.4 percent in 2025.
That initial slowdown in economic growth drives up unemployment. The unemployment rate reaches 4.1 percent by the end of 2023 and 4.7 percent by the end of 2024 before falling slightly, to 4.5 percent, in 2025. Payroll employment declines by an average of 10,000 jobs per month in 2024 and rises by an average of 6,000 jobs per month in 2025.
Inflation continues to gradually decline. Growth in the price index for personal consumption expenditures (PCE) slows from 3.3 percent in 2023 to 2.6 percent in 2024 and 2.2 percent in 2025.
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Source: CBO (Congressional Budget Office)
SEC Proposes New Requirements to Address Risks to Investors From Conflicts of Interest Associated With the Use of Predictive Data Analytics by Broker-Dealers and Investment Advisers
July 26, 2023--The Securities and Exchange Commission today proposed new rules that would require broker-dealers and investment advisers (collectively, "firms") to take certain steps to address conflicts of interest associated with their use of predictive data analytics and similar technologies to interact with investors to prevent firms from placing their interests ahead of investors' interests.
"We live in an historic, transformational age with regard to predictive data analytics, and the use of artificial intelligence," said SEC Chair Gary Gensler. "Today's predictive data analytics models provide an increasing ability to make predictions about each of us as individuals. This raises possibilities that conflicts may arise to the extent that advisers or brokers are optimizing to place their interests ahead of their investors' interests. When offering advice or recommendations, firms are obligated to eliminate or otherwise address any conflicts of interest and not put their own interests ahead of their investors' interests.
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Source: SEC.gov
Fed Raises Interest Rates to 22-Year High, Leaves Door Open for More
July 26, 2023--Powell says further rate increases will depend on data
Fed to consider 'extent of additional policy firming'
The Federal Reserve resumed raising interest rates and Chair Jerome Powell left open the possibility of further hikes, which he emphasized will depend on incoming data that has recently signaled a resilient US economy.
After pausing rate increases in June, policymakers lifted borrowing costs again at their policy meeting on Wednesday for the 11th time since March 2022 to curb inflation. The quarter percentage-point hike, a unanimous decision, boosted the target range for the Fed's benchmark federal funds rate to 5.25% to 5.5%, the highest level in 22 years.
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Source: bloomberg.com
Federal Reserve issues FOMC statement
July 26, 2023--Recent indicators suggest that economic activity has been expanding at a moderate pace. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated.
The U.S. banking system is sound and resilient. Tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain. The Committee remains highly attentive to inflation risks.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 5-¼ to 5-½. The Committee will continue to assess additional information and its implications for monetary policy. In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans. The Committee is strongly committed to returning inflation to its 2 percent objective.
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Source: federalreserve.gov
TCW to Buy Engine No. 1's ETF Unit in First Deal for CEO Katie Koch
July 25, 2023--Activist investor runs more than $600 million of equity ETFs
Engine No. 1 CEO Jennifer Grancio to join TCW as head of ETFs
TCW Group, the asset manager with a long history of managing bond funds, is expanding into exchange-traded funds with an agreement to buy an ETF business from activist investor Engine No. 1.
The acquisition, the first for new TCW Chief Executive Officer Katie Koch, includes a platform with more than $600 million of US equity ETFs and is expected to be completed in the third quarter, pending shareholder approval. Terms weren't disclosed.
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Source: bloomberg.com
Avantis Investors Launches New Active ETF
July 20, 2023--Avantis Investors, a $27 billion* investment offering from global asset manager American Century Investments, launched a new exchange traded fund (ETF) today. Avantis International Small Cap Equity ETF (AVDS) is now listed on the New York Stock Exchange (NYSE Arca, Inc.) and is the latest addition to Avantis Investors' growing ETF lineup.
"Launching new strategies is fun- especially when it is something clients are asking for," said Avantis Chief Investment Strategist Phil McInnis. "The Avantis International Small Cap Equity ETF compliments the already available Avantis U.S. Small Cap Equity ETF (AVSC). It applies the same principles but now to international markets."
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Source: American Century Investments
Horizons ETFs Launches Three ETFs Tracking the Solactive Equal Weight Canada Banks Index
July 19, 2023--As a very regulated and supervised industry, the Canadian bank sector is recognized for its stability and resilience. In addition to that, Canadian banks are also known for their dividend payments and their diversified business models, both domestically and internationally, which helps mitigate risks.
Solactive is pleased to announce that Horizons ETFs launched three ETFs tracking the Solactive Equal Weight Canada Banks Index. Through an equally weighted methodology, the Solactive Equal Weight Canada Banks Index includes major and regional banks that are listed in the Toronto Stock Exchange Exchange.
The Horizons Equal Weight Banks Index ETF (ticker HBNK) aims to mirror the index's performance without utilizing leverage. The Horizons Enhanced Equal Weight Banks Index ETF (ticker BNKL) seeks to replicate the index's performance 1.25 times (125%). The Horizons Enhanced Equal Weight Canadian Banks Covered Call ETF (ticker BKCL) tracks the index's performance while offering substantial monthly distributions from dividends and call option income. It utilizes a dynamic covered call option writing program to generate income.
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Source: Solactive AG
Panagram Launches Second Actively Managed CLO ETF with Diversified Access to AAA-rated CLO Bonds
July 19, 2023--CLOX seeks consistent return income with limited downside risk
Panagram Structured Asset Management ("Panagram"), a $14.7+ billion credit asset manager specializing in collateralized loan obligations ("CLOs"), announced the launch of its second ETF: Panagram AAA CLO ETF.
CLOX prioritizes capital preservation by investing in AAA-rated CLOs. This sector of the corporate credit market has a long-standing, robust historical track record, with no AAA-rated bond defaults in over 25 years. AAA-rated CLOs have a first priority on the interest and principal from underlying pools of senior secured loans. With CLOX, investors can gain access to a diverse pool of AAA-rated CLO bonds, which can offer higher yields than other similarly rated investments. Additionally, AAA-rated CLO bonds are less correlated to traditional stocks and bonds than other credit assets.
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Source: Panagram Structured Asset Management
ETF Managers Group CEO Samuel Masucci Steps Down Amid SEC Probe And Alleged Conflicts Of Interest
July 18, 2023--ETF Managers Group founder and CEO Samuel Masucci resigned from his role as chief executive and other related positions as part of a settlement with the Securities and Exchange Commission (SEC), which notified him of its decision to bring a civil action stemming from a probe into the company's cannabis exchange-traded fund.
The move comes weeks after ETFMG announced it was selling its ETF lineup to Amplify ETFs in a deal expected to close this year. The firm also recently announced two ETF closures, reported several sources.
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Source: businessinsider.com
