The Independent Market Observer

Brad McMillan, CFA, CAIA, MAI

Brad McMillan, CFA®, CAIA, MAI, is chief investment officer at Commonwealth Financial Network®, member FINRA/SIPC, the nation's largest privately held Registered Investment Adviser–independent broker/dealer. As CIO, Brad chairs the investment committee and is the primary spokesperson for Commonwealth’s investment divisions. Brad received his BA from Dartmouth College, an MS from MIT, and an MS from Boston College. He has worked as a real estate developer, consultant, and lender; as an investment analyst, manager, and consultant; and as a start-up executive. His professional qualifications include designated membership in the Appraisal Institute (MAI), the CFA Institute, and the CAIA Association. Brad speaks around the country on investment issues and writes for industry publications, as well as for this blog.
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Recent Posts

Market Thoughts for July 2021 [Video]

July 2, 2021

June was a mixed month for the markets. In the U.S., the Nasdaq and the S&P 500 were up, but the Dow ticked down. We saw the same trend internationally, with developed markets falling even as emerging markets moved ahead. On the economic front, business confidence remains at or close to all-time highs. Still, the problems of success (labor shortages and supply chain issues) loom large.

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Demographics and the Labor Market—It’s the Boomers’ Fault

June 30, 2021

Yesterday, we looked closely at how the labor market has changed over the past couple of decades. Briefly, the number of job openings kept growing with the economy, while the number of unemployed people stayed roughly constant. As a result, the number of jobs available per unemployed person hit new highs and the number of excess workers—available workers less the job openings—went into deficit. Before the pandemic, there were more job openings than workers to fill them, for the first time. Currently, although the pandemic changed things temporarily, the labor market is back to worker shortage. As we look ahead to the next decade, will this trend continue?

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Is the Labor Market Really That Tight?

June 29, 2021

So, let’s get back to the labor market discussion we started last week. Today, I want to take a deeper look at the key assumptions we referenced the other day, specifically that there will end up being more workers than jobs. As we discussed then, this has been the case for decades. But, in recent years, that dynamic has been changing as employment rose to new highs and unemployment dropped to multi-decade lows.

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Pandemic Not an Issue for Economy (for Now)

June 25, 2021

With the ongoing improvement in the medical news, this will be the last of the regular coronavirus updates. I had hoped it would also be the end of the need to cover the pandemic as a separate topic. But with the potential rise of the delta variant of COVID and the possibility of new outbreaks, that may not be the case. I will be providing updates as needed in the future.

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Shocks Versus Trends

June 24, 2021

Today, I’ll take a break from focusing on the labor market to look at a related, but shorter-term issue—shocks versus trends. This topic has current relevance, as well as wider applicability, so it is worth thinking through.

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Inflation Versus Wage Growth: 2021 Edition

June 23, 2021

At the start of 2020, I did a piece on inflation versus wage growth where I looked at a bunch of different indicators. The short version of that post is that, for working people, wage growth had generally been higher than inflation over the preceding five years or so.

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Appearance on Fox Business’ Mornings with Maria, June 22, 2021 [Video]

June 23, 2021

Yesterday I appeared on Fox Business’ Mornings with Maria to discuss inflation and the market outlook. Watch the full segment.

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What’s Going on with the Job Market?

June 22, 2021

One of the biggest questions for the economy right now is the job market. The headlines are doing a good job covering the immediate issues—labor shortages, wage increases, and so forth. But the more I look at it, there are a couple of implicit assumptions in how we view the job market that need more consideration. For example, much of the analysis has taken what is going on now as something that is happening without any warning and for no apparent reason. But is that really the case?

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Did the Fed Do a U-Turn?

June 17, 2021

Yesterday, the Fed concluded its regular meeting and came out with the following shocking news: it might start to raise rates in the next two and a half years, instead of the next three years. Markets dropped, interest rates rose, and headlines highlighted the shift in Fed thinking. What’s behind this apparent change in plans? Let’s start by taking a look at what didn’t happen.

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The Dollar (Still) Isn’t Collapsing

June 16, 2021

The strength (or lack thereof) of the dollar is a perennial topic here on the blog. Looking at the past several years, I see “U.S. Dollar Still Failing to Collapse” (November 2015), “Should You Be Worried About the Strong Dollar?” (December 2016), and, after a bit of a hiatus, “The Dollar Is Not Collapsing” (July 2020). There are many other versions, of course. (Notably, I did a whole series on money and the dollar back in 2013.) But the message has consistently been this: exchange rates bounce up and down, but there is no reason to worry.

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