The Week in Charts (06/13/24)

The most important charts and themes in markets, including...
00:00 Intro
00:37 Topics
02:04 The Cumulative vs. Current Inflation Debate
15:30 Is Rising Unemployment Signaling Recession
25:53 Powell is Watching the Week in Charts?
34:41 The Best Start to a Presidential Election Year Ever
37:08 Secular Trends Getting Stretched
41:24 The Path to Prosperity
Video

I kinda of liked the old way better, having learned how to use a card printer while spending summers at a filling station working my way through college (60s). You had to apply a little bit of elbow-grease to the process. There was a “knack” to it. Felt like you had accomplished something.
ISTM we wrote in the amounts by hand. Customer signed. The business kept the more rigid top (bottom?) copy and a thin paper carbon copy went to the customer.
BTW - Service was superior. We pumped the gas, washed the windshield, checked the engine oil. At the customer’s request we checked the air pressure in all 4 tires and added air when needed. All for free. And the gas price was normally between 30-35 cents a gallon.

Does anyone sign the back of credit cards these days?

I bet you could sign "Mickey Mouse" every time you're asked to sign and never get questioned. Nobody ever looks at them. Total waste of time. IMHO

In the past I've signed my credit card. 'Sign Here', 'Ask For Signature', and one time 'Alfred E Neuman.' At no time did anyone challenge the signature even when they quickly flipped the card over to see "if it had been signed."

@hank

Fido has an issue where you get a pop-up when you sell a fund saying “If you think you may be entitled to a fee wavier

I don't consider this as 'bad; but that the company trying to be helpful, no?.

Umm. Yes. I guess. Their online trading platform directs you to call and confirm what you already know. Like I said, if selling from 1 or 2 funds I’ve learned to ignore it. You can easily pull up your history and see if you owe an early redemption fee. In this case, I pulled from 5 different funds and was reluctant not to follow the instructions. I didn’t feel when I called, however, that they really wanted me to call. I thought they seemed a bit irked that I called re such a mundane issue. But - I might be wrong on that.
Maybe when they get AI, their online system will know whether or not a sale will incur a fee and they won’t need to waste your time and theirs calling every time you sell a fund.

https://www.sec.gov/Archives/edgar/data/720309/000119312524160798/d844723d497.htm
497 1 d844723d497.htm AMG FUNDS III
Filed pursuant to Rule 497(e)
File Nos. 002-84012 and 811-03752
AMG FUNDS III
AMG GW&K High Income Fund
Supplement dated June 13, 2024 to the Prospectus and Statement of Additional Information,
each dated May 1, 2024
The following information supplements and supersedes any information to the contrary relating to AMG GW&K High Income Fund (the “Fund”), a series of AMG Funds III (the “Trust”), contained in the Fund’s Prospectus and Statement of Additional Information, dated as noted above.
The Board of Trustees of the Trust has approved a plan to liquidate and terminate the Fund (the “Liquidation”), which is expected to occur on or about September 11, 2024 (the “Liquidation Date”). Effective on or about June 14, 2024, it is expected that the Fund will begin selling its portfolio investments and will invest the proceeds in cash and cash equivalents, in anticipation of the Liquidation. Proceeds of the Liquidation are expected to be distributed to shareholders of the Fund promptly following the Liquidation Date in full redemption of each shareholder’s shares of the Fund.
Effective immediately following the close of business on June 13, 2024, the Fund will no longer accept investments, except for investments made through existing asset allocation programs investing in the Fund, and shares purchased pursuant to automatic investment programs, such as automatic investments through 401(k) plans and reinvestments of any dividends and distributions. Those shareholders investing in the Fund through one of the exceptions described above may continue to purchase shares of the Fund provided that such transactions settle prior to the Liquidation Date.
A letter will be sent to shareholders who hold shares directly with the Fund (“Direct Shareholders”) setting forth the various options and instructions with respect to the Liquidation and the distribution of Direct Shareholders’ redemption proceeds. Any Direct Shareholder may elect to have redemption proceeds sent to them via check. Direct Shareholders may also elect to exchange their Fund shares into the same share class of any other fund in the AMG Funds family of funds that is open to new investors (subject to minimum initial investment requirements as described in such fund’s prospectus). Shareholders who hold their shares in the Fund through a financial intermediary should contact their financial representative to discuss their options with respect to the Liquidation and the distribution of such shareholders’ redemption proceeds.
The Fund intends to distribute its accumulated net capital gains and net investment income, if any, to shareholders of record of the Fund as of the close of business on June 17, 2024; these distributions may be taxable to shareholders who do not hold their shares in a tax-advantaged account such as an IRA or 401(k).
PLEASE KEEP THIS SUPPLEMENT FOR FUTURE REFERENCE

https://www.sec.gov/Archives/edgar/data/879947/000119312524160793/d849966d497.htm
497 1 d849966d497.htm AMG FUNDS II
Filed pursuant to Rule 497(e)
File Nos. 033-43089 and 811-06431
AMG FUNDS II
AMG GW&K Enhanced Core Bond ESG Fund
Supplement dated June 13, 2024 to the Prospectus and Statement of Additional Information,
each dated May 1, 2024
The following information supplements and supersedes any information to the contrary relating to AMG GW&K Enhanced Core Bond ESG Fund (the “Fund”), a series of AMG Funds II (the “Trust”), contained in the Fund’s Prospectus and Statement of Additional Information, dated as noted above.
The Board of Trustees of the Trust has approved a plan to liquidate and terminate the Fund (the “Liquidation”), which is expected to occur on or about September 11, 2024 (the “Liquidation Date”). Effective on or about June 14, 2024, it is expected that the Fund will begin selling its portfolio investments and will invest the proceeds in cash and cash equivalents, in anticipation of the Liquidation. Proceeds of the Liquidation are expected to be distributed to shareholders of the Fund promptly following the Liquidation Date in full redemption of each shareholder’s shares of the Fund.
Effective immediately following the close of business on June 13, 2024, the Fund will no longer accept investments, except for investments made through existing asset allocation programs investing in the Fund, and shares purchased pursuant to automatic investment programs, such as automatic investments through 401(k) plans and reinvestments of any dividends and distributions. Those shareholders investing in the Fund through one of the exceptions described above may continue to purchase shares of the Fund provided that such transactions settle prior to the Liquidation Date.
A letter will be sent to shareholders who hold shares directly with the Fund (“Direct Shareholders”) setting forth the various options and instructions with respect to the Liquidation and the distribution of Direct Shareholders’ redemption proceeds. Any Direct Shareholder may elect to have redemption proceeds sent to them via check. Direct Shareholders may also elect to exchange their Fund shares into the same share class of any other fund in the AMG Funds family of funds that is open to new investors (subject to minimum initial investment requirements as described in such fund’s prospectus). Shareholders who hold their shares in the Fund through a financial intermediary should contact their financial representative to discuss their options with respect to the Liquidation and the distribution of such shareholders’ redemption proceeds.
The Fund intends to distribute its accumulated net capital gains and net investment income, if any, to shareholders of record of the Fund as of the close of business on June 17, 2024; these distributions may be taxable to shareholders who do not hold their shares in a tax-advantaged account such as an IRA or 401(k).
PLEASE KEEP THIS SUPPLEMENT FOR FUTURE REFERENCE

https://www.sec.gov/Archives/edgar/data/912036/000119312524160800/d807981d497.htm
497 1 d807981d497.htm AMG FUNDS IV
Filed pursuant to Rule 497(e)
File Nos. 033-68666 and 811-08004
AMG FUNDS IV
AMG Beutel Goodman International Equity Fund
Supplement dated June 13, 2024 to the Prospectus and Statement of Additional Information,
each dated March 1, 2024
The following information supplements and supersedes any information to the contrary relating to AMG Beutel Goodman International Equity Fund (the “Fund”), a series of AMG Funds IV (the “Trust”), contained in the Fund’s Prospectus and Statement of Additional Information, dated as noted above.
The Board of Trustees of the Trust has approved a plan to liquidate and terminate the Fund (the “Liquidation”), which is expected to occur on or about September 11, 2024 (the “Liquidation Date”). Effective on or about June 14, 2024, it is expected that the Fund will begin selling its portfolio investments and will invest the proceeds in cash and cash equivalents, in anticipation of the Liquidation. Proceeds of the Liquidation are expected to be distributed to shareholders of the Fund promptly following the Liquidation Date in full redemption of each shareholder’s shares of the Fund.
Effective immediately following the close of business on June 13, 2024, the Fund will no longer accept investments, except for investments made through existing asset allocation programs investing in the Fund, and shares purchased pursuant to automatic investment programs, such as automatic investments through 401(k) plans and reinvestments of any dividends and distributions. Those shareholders investing in the Fund through one of the exceptions described above may continue to purchase shares of the Fund provided that such transactions settle prior to the Liquidation Date.
A letter will be sent to shareholders who hold shares directly with the Fund (“Direct Shareholders”) setting forth the various options and instructions with respect to the Liquidation and the distribution of Direct Shareholders’ redemption proceeds. Any Direct Shareholder may elect to have redemption proceeds sent to them via check. Direct Shareholders may also elect to exchange their Fund shares into the same share class of any other fund in the AMG Funds family of funds that is open to new investors (subject to minimum initial investment requirements as described in such fund’s prospectus). Shareholders who hold their shares in the Fund through a financial intermediary should contact their financial representative to discuss their options with respect to the Liquidation and the distribution of such shareholders’ redemption proceeds.
The Fund intends to distribute its accumulated net capital gains and net investment income, if any, to shareholders of record of the Fund as of the close of business on June 17, 2024; these distributions may be taxable to shareholders who do not hold their shares in a tax-advantaged account such as an IRA or 401(k).
PLEASE KEEP THIS SUPPLEMENT FOR FUTURE REFERENCE

Rarely use chat. Too easy to bump the ipad’s screen and have everything disappear. Plus - typing fast I make a lot of embarrassing mistakes. True, you can take screen shots and have a record. Fido has an issue where you get a pop-up when you sell a fund saying “If you think you may be entitled to a fee wavier, cancel this transaction and call (this number).” I’ve pretty much learned to ignore it. But when selling from several different funds to raise cash recently the message kept coming up - 5 times as I recall. So I called. Longest hold ever at Fido. 10-15 minutes. Finally a guy picked up and said I was good to sell (without any fees) and that the message simply means “exercise due diligence.” Obviously, that’s not what it says.

Schwab website seems to breakdown more often these days. In my accounts the cumulative Day's change today, at the top of the positions page, is more than +50%. But the actual change is correctly negative.
Yesterday, they had log in issues. I could not log in and when I called their telephone number to get help, there was a recording about log in issues.
Getting AUM is fine but the organization has to be built for it. When eyes are bigger than the stomach, there can be health consequences.
P.S.: Think or Swim login probably was fine.

Took a few times to look and re-look. "Who's gonna buy donuts for everyone?" Looks like I'm the guy. I could not figure out the discrepancy between Schwab and my own Morningstar list. Harumph. What's going on?
A-ha! WBALX pays in JUNE and December. Wife's Trad-IRA. Now she owns more shares. THAT'S the ticket. Ok, jelly? Chocolate? What's your pleasure? ($0.1515 div/share on 12 June, '24.)

UK. 0.36%
Dev. Europe 4.88%
Dev. Asia 0.3%
5.54% foreign. Not by choice. My fund managers put my money there. So, I'm very limited re foreign stuff. But 41% in bonds. YIELD on full portfolio is 4.05%. Liking that. Age 70 is coming in late July. Holding very small bites in Canada and Luxembourg, single stocks.

"...The SEC under Chair Gary Gensler has been tightening its grip on private funds, and the rules were aimed at bringing increased transparency to a burgeoning industry known for its opaque and complex layers of fees..."
5th Circuit Court of Appeals. New Orleans. Full of feces. Idiots.

AAII Sentiment Survey, 6/12/24
BULLISH remained the top sentiment (44.6%, above average) & bearish became the bottom sentiment (25.7%, below average); neutral became the middle sentiment (29.7%, below average); Bull-Bear Spread was +18.9% (above average). Investor concerns: Elections, budget, inflation, economy, the Fed, dollar, Russia-Ukraine (120+ weeks), Israel-Hamas (35+ weeks), geopolitical. For the Survey week (Th-Wed), stocks mixed (growth up, cyclicals down), bonds flat, oil up, gold down, dollar up. Fed funds remain at 5.25-5.50%; lack of confidence in improvement in inflation. #AAII #Sentiment #Markets
https://ybbpersonalfinance.proboards.com/post/1513/thread

Low Tech, I think that the other members are saying that the interest rate that you are getting today on your MM funds might not (and probably won't if you look at the past) last forever. In that case, what would your alternative plans be?

I'm a buy-and-holder, but that doesn't mean the same thing forever. Here's the key: "Conditions change."
As things are now, you could put $1M in a money fund and get over $50k a year in interest with no price fluctuation. A few years ago that wouldn't work. A few years from now that may not work either, or it could go up even more, a lot more.

+1

Low Tech, I think that the other members are saying that the interest rate that you are getting today on your MM funds might not (and probably won't if you look at the past) last forever. In that case, what would your alternative plans be?

I already answered that three posts above yours. Is everybody here illiterate? And several posts above that I said: "Conditions will surely change -- but we don't know when or in which direction -- adjust as necessary."
I'm a buy-and-holder, but that doesn't mean the same thing forever. Here's the key: "Conditions change."
As things are now, you could put $1M in a money fund and get over $50k a year in interest with no price fluctuation. A few years ago that wouldn't work. A few years from now that may not work either, or it could go up even more, a lot more.

Often a brokerage will allow an investor to transfer in shares of a fund that cannot be opened at the brokerage. In the past I've transferred to Merrill Vanguard Admiral shares and institutional shares of a fund in another family. Neither of these could be opened at Merrill directly. Call Merrill and ask.
With respect to FSEAX, my Merrill account shows that it is available for subsequent purchases (only). So Merrill can hold these shares and once you transfer them in you would be able to add to your position. (But why, since you'd pay a transaction fee to do that?)
As far as cash transfers go, I assume you are thinking of short term bond ETFs (e.g. ICSH) as "cash equivalents". There are no MMF ETFs yet. See
https://mutualfundobserver.com/discuss/discussion/62359/money-market-etf
I suppose what you're suggesting would work. Though you risk market loss. You could eliminate that risk by picking up Treasuries on the secondary market that mature in a few days (or a couple of weeks to be safe with the transfer speed). If you have enough cash ($1M) to buy institutional shares of a Fidelity MMF, you might be able to transfer that in kind (just speculating here - check with Merrill).
FYI: it costs $29.95 at Merrill to buy Treasuries at auction.
You could also simply transfer the cash via EFT (takes about a day) or a wire (same day).
ACAT transfers from Fidelity to Merrill usually go extremely quickly. The one I initiated yesterday has already been processed by Fidelity. The actual security transfer should take a couple of days. However, the one I initiated Monday is in limbo. Merrill rep says that it is proceeding normally even though their website says that it has been cancelled.

Post-Conference Notes by YBB
Rates are maintained - fed funds 5.25-5.50%, bank reserves rate 5.4%, discount rate 5.5%. Inflation target remains +2% average. Base-effects have caused a slight bump in recent inflation data. Confidence in progress on inflation is low, so higher rates for longer can be expected. Neutral/equilibrium rates is a theoretical concept that is good only in hindsight. Ad-hoc evidence of price reductions is just that.
Treasury QT continues at the reduced level of -$25 billion/mo, but MBS QT remain at -$35 billion/mo.
Monetary policy is restrictive, although economic data remain flat now.
Labor market remains strong, but it isn't overheating.
Housing is weak. The OERs (owners' equivalent rent) remain elevated. There is an overall shortage of houses.
Consumer spending has been rising, so is the consumer debt. Household wealth is also rising. But many consumers are unhappy as lower inflation doesn't mean lower prices.
Banks are in good financial shape.
Dollar is strong, but that is Treasury's responsibility.
Internal review of the Fed will start later in the year.
New SEPs (Summary of Economic Projections) were released.
https://ybbpersonalfinance.proboards.com/post/1512/thread

A Schwab rep called on Monday. We talked about Schwab acquiring a lot of former Vanguard customers and what Schwab can do for them, like waiving Vanguard fund fees. A very open conversation, where I asked for fee waivers and Schwab was amenable within limits (still get charged on most families). I asked about a transfer bonus and he responded without hesitancy - though for one promotion he said he'd have to double check that it was still available. In short, an offer I couldn't refuse.
(The call was from an office 20 miles away. He offered to have someone call from my local office, but I declined since I would use the local office at most quite infrequently.)
I got follow up calls from Schwab on Tues (to confirm offer) and today (to ask if I wanted to open an account now or wait until I'd positioned assets for the transfer). No pressure, but then again I'm going to transfer most of my Vanguard assets there, so what's to press?
FWIW, I'm also looking at Merrill for its current transfer offer (see below) and as a replacement for Vanguard Cash Plus, where I have VUSXX and a bank sweep paying 4.6% (was 4.7%). I like to keep a modest amount in a bank just in case the world collapses or the credit markets freeze up again. Merrill offers institutional class shares of third party MMFs with a $1 min.
I also spoke with Fidelity, who pitched their services as being superior, and specifically highlighted Schwab's poor MMF rates. My response was that at Merrill I can do better than at either Fidelity or Schwab. Mostly we went over ground that's been covered ad nauseum here already.
Merrill transfer bonuses ($1K for $250K transferred, $400 for $100K, $200 for $50K, $100 for $20K).

Unhappy customer: Why I finally took my business from Vanguard to Charles Schwab
https://finance.yahoo.com/news/unhappy-customer-why-i-finally-took-my-business-from-vanguard-to-charles-schwab-180758503.html

I like the idea of looking at NRSRO ratings such as Fitch. Financial institutions will usually give their ratings on their website.
For example, here's Morgan Stanley Bank's ratings. Morgan Stanley has its own credit ratings and separate ratings of its subsidiaries. Scroll past the former to get to the Morgan Stanley Bank ratings.
I also like Weiss (not an NRSRO). From WSJ, May 6, 2010 (subscription required):

Weiss Group LLC, an independent research provider, bought back a financial-institutions rating business it previously sold and intends to apply for the unit to become a "nationally recognized statistical ratings organization," or NRSRO, the group's chairman said.
The unit, Weiss Ratings, produces "financial-safety ratings" for hundreds of U.S. banks and insurance companies and doesn't accept compensation from the companies it rates.
...
The ratings from Weiss are meant to be an indicator of the risk and financial soundness of banks and insurance companies. They are similar to the "financial strength ratings" that NRSROs like Moody's Investors Service and A.M. Best currently provide on financial institutions.

Here's Weiss' rating of Morgan Stanley Bank, and Weiss' page describing its bank ratings in detail.
DepositAccounts rates Morgan Stanley Bank a B+ for health. The single 3* rating that you see is just a subjective rating by a user apparently disappointed with the rate offered on a CD. It has nothing to do with safety, which end users are ill equipped to comment on.
https://www.depositaccounts.com/banks/morgan-stanley-bank-national-association.html#health