The Week Ahead – Dr. Evil

Investments & Economy The Week Ahead Grow

The Week Ahead – Dr. Evil

Andrew Chan, CAIA, Co-Chief Investment Officer

| 8/6/18 7:43 AM

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Welcome to “The Week Ahead” where we take a moment to provide our thoughts on what we can expect in markets and the economy during the upcoming week.

Can you believe Austin Powers: International Man of Mystery is now over two decades old? For those who don’t know, the film’s antagonist Dr. Evil was frozen for thirty years and, when he is thawed out, he’s back to his villainous ways. At one point he conspires to hold the world hostage for $1 million, at which all of the world’s leaders begin laughing at the paltry sum. Poor Dr. Evil didn’t understand the power of inflation and the growth of the global economy!

Meanwhile, here in 2018 another company has finally crossed the $1 trillion dollar market cap threshold. Back in 2007, PetroChina briefly broke that barrier before the Great Financial Crisis and the collapse of oil occurred. This past week Apple broke through that threshold. To put things in perspective, the total market cap for U.S. equity markets today is $31 trillion. Japan just recently took back the #2 spot, coming in at $6.17 trillion. Meanwhile, China checks in at #3 at $6.09 trillion (amazingly, China first broke the $1 trillion level back in 2006!).

After a data heavy week, the week ahead will be much quieter, with two readings for inflation via PPI and CPI. Expectations are a small increase to both readings as current survey data reflects manufacturers dealing with rising input costs as well as supply chain constraints. With Core PCE growing 0.1% in June, one would expect a similar positive move with Core CPI. With last week’s continued strong employment report (the unemployment rate ticking down to 3.9%), it looks the like Fed is on course to hike at next month’s FOMC meeting.

Data deck for August 4-August 10:

Date	Indicator	Period
August 7	JOLTS Job Openings	June
August 7	Consumer Credit	June
August 9	Initial Jobless Claims	----
August 9	Producer Price Index	July
August 9	Wholesale Inventories	June
August 10	Consumer Price Index	July
August 10	Monthly Budget Statement	July

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Andrew Chan, CAIA, Co-Chief Investment Officer

About the Author

Andrew Chan, CAIA, Co-Chief Investment Officer

Mr. Chan co-leads the strategic investment committee and is responsible for overseeing First Foundation Advisor’s investment solutions platform which includes conducting investment manager research for both traditional and alternative investments as well as asset allocation guidance for portfolio construction. As a member of the investment committee, he provides market commentary and investment insights to clients. Additionally, Mr. Chan serves as a senior executive on the business strategy committee providing guidance on firm wide initiatives. With over 15 years of wealth management experience, Mr. Chan has played key roles across various aspects of investment and wealth management. Prior to joining First Foundation Advisors, Mr. Chan was most recently a portfolio manager at U.S. Trust where, in addition to his daily responsibilities, he served on numerous national committees including the investment manager committee, the portfolio model committee, and the strategic technology committee. He also served on the in-house strategic consultant committee reporting directly to the President of U.S. Trust. Mr. Chan is a graduate of the Wharton School Executive Program on Investment Management and holds a Bachelor of Arts degree in Business Administration from the University of California, Riverside. He is a Chartered Alternative Investment Analyst (CAIA). Mr. Chan has previously served as an exam working group member and as an exam grader for CAIA. A member of the CAIA SoCal Executive Board since 2015, Mr. Chan has served as executive chapter head since 2017. Read more