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First Eagle 4Q20 Market Overview: Turn, Turn, Turn

First Eagle Investment Management’s market overview for the fourth quarter ended December 2020, discussing gold as a potential hedge. Q4 2020 hedge fund letters, conferences and more Key Takeaways Though 2020 was a generationally poor period for value…

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First Eagle Investment Management’s market overview for the fourth quarter ended December 2020, discussing gold as a potential hedge.

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Q4 2020 hedge fund letters, conferences and more

Key Takeaways

  • Though 2020 was a generationally poor period for value indexes relative to growth, hopes that the worst of the Covid-19 recession was behind us helped fuel a fourth quarter rebound in the mature, physical components of the economy most directly impacted by pandemic lockdowns.
  • While the massive monetary policy response to the onset of Covid-19 appears to have cushioned the pandemic’s economic impact, it did so at the expense of growing monetary, fiscal and trade imbalances. The ongoing illusion of macro stability serves as a headwind to longer-term productivity and suggests potentially lower real returns for markets in general.
  • At First Eagle, we orient our true north around the potential creation of resilient wealth in a complex world. The quality and diversity of our stock holdings, complemented in many of our portfolios by gold as a potential hedge, gives us conviction within an unpredictable and unprecedented landscape.

Views expressed are as of January 7, 2021.

Portfolios Complimented By Gold As A Potential Hedge

Generally strong returns across financial markets in the fourth quarter capped off a year that few could have predicted. While risk assets continued their improbable sprint back from the depths of the Covid-19 selloff, market leadership shifted in the final stanza of the year. Though large, tech-related US companies had dominated index performance during the massive recovery that began in late March, the persistence of the “reflation” trade that emerged in September inspired a rotation into segments of the global equity markets that had lagged for much of the year. For example, the fourth quarter saw the outperformance of value over growth, small stocks over large, and international developed and emerging markets over the US.

Despite what ultimately was a successful year for asset returns broadly, we believe expectations moving forward should be tempered given pockets of rich valuations amid a range of structural risks. In our view, portfolios composed of soundly valued businesses complimented by gold as a potential hedge are a prudent way to participate in possible market upside while enduring the periods of distress we may encounter.

Equity Market Laggards Move to the Fore

While 2020 as a whole was a generationally difficult year for value investors, signs of a reflation trade that emerged in September persisted through year-end, driving the outperformance of value both globally (15.7% for the MSCI World Value versus 12.5% for MSCI World Growth) and within the US (16.3% for Russell 1000 Value versus 11.4% for Russell 1000 Growth) during the fourth quarter. Similarly, the full year underperformance of international stocks was pared back somewhat, as the MSCI EAFE Index outpaced the S&P 500 Index 16.0% to 12.1%, due in part to a weakening US dollar.1

Of course, the 12-month picture tells a much different story in a year when lockdowns drove the virtual economy up and the real economy down. While the MSCI World Index was up 15.9%, the growth component returned 33.8% compared to a 1.2% decline in value; this 35% spread almost defies belief given that the growth and value indexes have a long-term historical correlation in excess of 0.9. Spreads between growth and value were similar in the US, as the Russell 1000 Growth Index posted a 38.5% return during 2020 compared to the 2.8% return of the Russell 1000 Value Index.2

The pandemic provoked a near shutdown of the more mature, physical components of the economy—such as commodities, manufacturing and real estate—including those companies that tend to populate value indexes. In contrast, the pandemic-driven shift online for both business and personal commerce accelerated preexisting trends and provided a significant boost to the revenue and cash flows of new economy growth stocks with strong online presence. Despite the impressive business results posted by certain elements within the growth space, overall index performance in 2020 was driven primarily by multiple expansion. By year-end, the enterprise value/EBIT ratio of the MSCI World Growth Index relative to the MSCI World Value Index stood at the highest level since 2000.3

As long-term investors, we think it is important to take the right message from the strong broad market returns of 2020. As we’ve often cautioned, extrapolating trends is a risky way to commit capital, particularly when these trends reflect an extraordinary operating environment like that of 2020. Some of the factors that led to the extreme gap in valuation between growth and value last year have a natural elasticity to them and are likely to revert. The arrival of vaccines suggests there is a plausible path for economies to reopen within the next 12 months, to the potential benefit of the companies most directly impacted by 2020’s lockdowns—mature businesses operating in the physical economy. Further, more-normal conditions may make it difficult for certain growth stocks to maintain lofty valuation multiples as year-over-year sales and earnings growth comparisons become more challenging in 2021.

Low discount rates also have heightened the appeal of more speculative names, as investors see less opportunity risk in taking a flyer on investments that may pay big rewards down the line—or nothing at all. Frankly, we are concerned about the signs of speculative froth we see in paradoxically low credit spreads, in the torrid initial public offering market (including offerings of special-purpose acquisition companies, or SPACS) and in the many “concept” stocks that trade at valuations divorced not just from the reality of their current cash flows or revenue but also from any plausible expectation for five years from now.

Yellow Signals Ahead?

We believe it may be possible that market and monetary dynamics have reached a pivot point and that we could be heading into a period of significant risk for investors. If we analyze the pattern of money supply over the past 50 years—from the dissolution of the Bretton Woods agreement in 1971, to the deflationary impact of China’s entry in the global economy in the 1990s to any number of economic dislocations from such events as the dot-com bubble, the global financial crisis and Covid-19—we see a significant transition. While currency and government debt had once been exogenously constrained by either a link to gold or by a tough, independent central bank, it now is endogenously created to support fiscal deficits and private sector recapitalization, seemingly without fear of repercussion. This may seem like a free lunch, but there is no free lunch in economics.

With relatively fixed money supply, business cycles can be deeper, restructuring harsher and inequality greater, but there is less inflation and limited fiscal and trade imbalances, and longer-term productivity growth tends to be higher as a result. Without such constraints, short-term cycles are cushioned—as we saw most recently during the onset of Covid-19—but at the expense of growing monetary, fiscal and trade imbalances, all of which act as headwinds to longer-term productivity. These conditions ultimately may be realized in the form of a global bifurcation between regions with strong currencies and trade surpluses—like Japan and Europe and potentially even China in the years ahead—that may face deflation risk, and weak-currency, trade-deficit regions—like the US and the UK—that may be subject to stagflation risk. Net net, current policy dynamics offer the illusion of macro stability but also the potential for structurally lower real returns for markets in general and lower real productivity growth.

Maintaining Our True North

Though the dollar was strong early in 2020 as investors sought perceived currency “safe havens,” it has weakened steadily once risk assets began to rebound in late March and real interest rates—the difference between nominal rates and inflation—headed south. As the Fed slashed its policy rate to near zero, interest rate differentials between the US and other nations shrank, diminishing the appeal of the dollar carry trade. Meanwhile, through its embrace of an inflation-averaging framework rather than a hard 2% target, the central bank is likely to let the economy run hot to make up for many years of subtarget inflation. We think the combination of a weaker dollar and lower-multiple international equity markets creates a more favorable backdrop for us as global investors.

Gold also proved to be a useful hedge against the economic shock and the concurrent monetary debasement we witnessed in 2020. Gold hit a new high in nominal US dollars during the year, reflective of lower real interest rates and a weaker dollar. We don’t have a directional view on gold, but it is important to set realistic expectations for 2021. A stronger-than-expected recovery could inspire more-hawkish rhetoric from the Fed and lead to a stronger dollar and a backup in bond yields, likely impairing the value of gold. Having said that, we are maintaining a somewhat larger-than-average allocation to gold as a potential hedge to help chart a resilient course through a complex environment characterized by such destabilizing factors as lofty equity market valuations, high sovereign debt levels and global and local political instability. With sovereign rates likely to remain near zero as the money supply continues to grow unabated, cash is a less-appealing alternative to gold, especially if central bank efforts to promote inflation are successful. Finally, we are mindful of the new strains of Covid that have been emerging alongside the original strain whose impact has worsened through the winter.

True north for us remains the quest for sound real returns against the backdrop of a complex, unpredictable world. The rearview mirror shows a pattern of sound, resilient real returns for our strategies, which have neither been as weak as distressed markets nor as strong as the pockets of maximum speculative interest. The forward view is one where expectations for broader asset returns should be tempered, given high valuations and/or low yields amid structural risks from sovereign debt levels to geopolitics, monetary experimentalism and the ongoing pandemic. The quality and diversity of our stock holdings gives us conviction in this environment. Some participate in the new economy, some stand to benefit from a recovery of the more mature physical economy, and some are simply grind-it-out cash-flow-generative businesses—but all are quality companies at prices we consider sound.

Our approach to value investment begins with defining the character of a business before assessing its price. We believe owning soundly valued, real businesses and a potential hedge in gold is a prudent way to participate in the monetary melt up we are witnessing while fortifying against the pockets of distress that we will likely encounter.

The post First Eagle 4Q20 Market Overview: Turn, Turn, Turn appeared first on ValueWalk.

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Red Candle In The Wind

Red Candle In The Wind

By Benjamin PIcton of Rabobank

February non-farm payrolls superficially exceeded market expectations on Friday by…

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Red Candle In The Wind

By Benjamin PIcton of Rabobank

February non-farm payrolls superficially exceeded market expectations on Friday by printing at 275,000 against a consensus call of 200,000. We say superficially, because the downward revisions to prior months totalled 167,000 for December and January, taking the total change in employed persons well below the implied forecast, and helping the unemployment rate to pop two-ticks to 3.9%. The U6 underemployment rate also rose from 7.2% to 7.3%, while average hourly earnings growth fell to 0.2% m-o-m and average weekly hours worked languished at 34.3, equalling pre-pandemic lows.

Undeterred by the devil in the detail, the algos sprang into action once exchanges opened. Market darling NVIDIA hit a new intraday high of $974 before (presumably) the humans took over and sold the stock down more than 10% to close at $875.28. If our suspicions are correct that it was the AIs buying before the humans started selling (no doubt triggering trailing stops on the way down), the irony is not lost on us.

The 1-day chart for NVIDIA now makes for interesting viewing, because the red candle posted on Friday presents quite a strong bearish engulfing signal. Volume traded on the day was almost double the 15-day simple moving average, and similar price action is observable on the 1-day charts for both Intel and AMD. Regular readers will be aware that we have expressed incredulity in the past about the durability the AI thematic melt-up, so it will be interesting to see whether Friday’s sell off is just a profit-taking blip, or a genuine trend reversal.

AI equities aside, this week ought to be important for markets because the BTFP program expires today. That means that the Fed will no longer be loaning cash to the banking system in exchange for collateral pledged at-par. The KBW Regional Banking index has so far taken this in its stride and is trading 30% above the lows established during the mini banking crisis of this time last year, but the Fed’s liquidity facility was effectively an exercise in can-kicking that makes regional banks a sector of the market worth paying attention to in the weeks ahead. Even here in Sydney, regulators are warning of external risks posed to the banking sector from scheduled refinancing of commercial real estate loans following sharp falls in valuations.

Markets are sending signals in other sectors, too. Gold closed at a new record-high of $2178/oz on Friday after trading above $2200/oz briefly. Gold has been going ballistic since the Friday before last, posting gains even on days where 2-year Treasury yields have risen. Gold bugs are buying as real yields fall from the October highs and inflation breakevens creep higher. This is particularly interesting as gold ETFs have been recording net outflows; suggesting that price gains aren’t being driven by a retail pile-in. Are gold buyers now betting on a stagflationary outcome where the Fed cuts without inflation being anchored at the 2% target? The price action around the US CPI release tomorrow ought to be illuminating.

Leaving the day-to-day movements to one side, we are also seeing further signs of structural change at the macro level. The UK budget last week included a provision for the creation of a British ISA. That is, an Individual Savings Account that provides tax breaks to savers who invest their money in the stock of British companies. This follows moves last year to encourage pension funds to head up the risk curve by allocating 5% of their capital to unlisted investments.

As a Hail Mary option for a government cruising toward an electoral drubbing it’s a curious choice, but it’s worth highlighting as cash-strapped governments increasingly see private savings pools as a funding solution for their spending priorities.

Of course, the UK is not alone in making creeping moves towards financial repression. In contrast to announcements today of increased trade liberalisation, Australian Treasurer Jim Chalmers has in the recent past flagged his interest in tapping private pension savings to fund state spending priorities, including defence, public housing and renewable energy projects. Both the UK and Australia appear intent on finding ways to open up the lungs of their economies, but government wants more say in directing private capital flows for state goals.

So, how far is the blurring of the lines between free markets and state planning likely to go? Given the immense and varied budgetary (and security) pressures that governments are facing, could we see a re-up of WWII-era Victory bonds, where private investors are encouraged to do their patriotic duty by directly financing government at negative real rates?

That would really light a fire under the gold market.

Tyler Durden Mon, 03/11/2024 - 19:00

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Trump “Clearly Hasn’t Learned From His COVID-Era Mistakes”, RFK Jr. Says

Trump "Clearly Hasn’t Learned From His COVID-Era Mistakes", RFK Jr. Says

Authored by Jeff Louderback via The Epoch Times (emphasis ours),

President…

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Trump "Clearly Hasn't Learned From His COVID-Era Mistakes", RFK Jr. Says

Authored by Jeff Louderback via The Epoch Times (emphasis ours),

President Joe Biden claimed that COVID vaccines are now helping cancer patients during his State of the Union address on March 7, but it was a response on Truth Social from former President Donald Trump that drew the ire of independent presidential candidate Robert F. Kennedy Jr.

Robert F. Kennedy Jr. holds a voter rally in Grand Rapids, Mich., on Feb. 10, 2024. (Mitch Ranger for The Epoch Times)

During the address, President Biden said: “The pandemic no longer controls our lives. The vaccines that saved us from COVID are now being used to help beat cancer, turning setback into comeback. That’s what America does.”

President Trump wrote: “The Pandemic no longer controls our lives. The VACCINES that saved us from COVID are now being used to help beat cancer—turning setback into comeback. YOU’RE WELCOME JOE. NINE-MONTH APPROVAL TIME VS. 12 YEARS THAT IT WOULD HAVE TAKEN YOU.”

An outspoken critic of President Trump’s COVID response, and the Operation Warp Speed program that escalated the availability of COVID vaccines, Mr. Kennedy said on X, formerly known as Twitter, that “Donald Trump clearly hasn’t learned from his COVID-era mistakes.”

“He fails to recognize how ineffective his warp speed vaccine is as the ninth shot is being recommended to seniors. Even more troubling is the documented harm being caused by the shot to so many innocent children and adults who are suffering myocarditis, pericarditis, and brain inflammation,” Mr. Kennedy remarked.

“This has been confirmed by a CDC-funded study of 99 million people. Instead of bragging about its speedy approval, we should be honestly and transparently debating the abundant evidence that this vaccine may have caused more harm than good.

“I look forward to debating both Trump and Biden on Sept. 16 in San Marcos, Texas.”

Mr. Kennedy announced in April 2023 that he would challenge President Biden for the 2024 Democratic Party presidential nomination before declaring his run as an independent last October, claiming that the Democrat National Committee was “rigging the primary.”

Since the early stages of his campaign, Mr. Kennedy has generated more support than pundits expected from conservatives, moderates, and independents resulting in speculation that he could take votes away from President Trump.

Many Republicans continue to seek a reckoning over the government-imposed pandemic lockdowns and vaccine mandates.

President Trump’s defense of Operation Warp Speed, the program he rolled out in May 2020 to spur the development and distribution of COVID-19 vaccines amid the pandemic, remains a sticking point for some of his supporters.

Vice President Mike Pence (L) and President Donald Trump deliver an update on Operation Warp Speed in the Rose Garden of the White House in Washington on Nov. 13, 2020. (Mandel Ngan/AFP via Getty Images)

Operation Warp Speed featured a partnership between the government, the military, and the private sector, with the government paying for millions of vaccine doses to be produced.

President Trump released a statement in March 2021 saying: “I hope everyone remembers when they’re getting the COVID-19 Vaccine, that if I wasn’t President, you wouldn’t be getting that beautiful ‘shot’ for 5 years, at best, and probably wouldn’t be getting it at all. I hope everyone remembers!”

President Trump said about the COVID-19 vaccine in an interview on Fox News in March 2021: “It works incredibly well. Ninety-five percent, maybe even more than that. I would recommend it, and I would recommend it to a lot of people that don’t want to get it and a lot of those people voted for me, frankly.

“But again, we have our freedoms and we have to live by that and I agree with that also. But it’s a great vaccine, it’s a safe vaccine, and it’s something that works.”

On many occasions, President Trump has said that he is not in favor of vaccine mandates.

An environmental attorney, Mr. Kennedy founded Children’s Health Defense, a nonprofit that aims to end childhood health epidemics by promoting vaccine safeguards, among other initiatives.

Last year, Mr. Kennedy told podcaster Joe Rogan that ivermectin was suppressed by the FDA so that the COVID-19 vaccines could be granted emergency use authorization.

He has criticized Big Pharma, vaccine safety, and government mandates for years.

Since launching his presidential campaign, Mr. Kennedy has made his stances on the COVID-19 vaccines, and vaccines in general, a frequent talking point.

“I would argue that the science is very clear right now that they [vaccines] caused a lot more problems than they averted,” Mr. Kennedy said on Piers Morgan Uncensored last April.

“And if you look at the countries that did not vaccinate, they had the lowest death rates, they had the lowest COVID and infection rates.”

Additional data show a “direct correlation” between excess deaths and high vaccination rates in developed countries, he said.

President Trump and Mr. Kennedy have similar views on topics like protecting the U.S.-Mexico border and ending the Russia-Ukraine war.

COVID-19 is the topic where Mr. Kennedy and President Trump seem to differ the most.

Former President Donald Trump intended to “drain the swamp” when he took office in 2017, but he was “intimidated by bureaucrats” at federal agencies and did not accomplish that objective, Mr. Kennedy said on Feb. 5.

Speaking at a voter rally in Tucson, where he collected signatures to get on the Arizona ballot, the independent presidential candidate said President Trump was “earnest” when he vowed to “drain the swamp,” but it was “business as usual” during his term.

John Bolton, who President Trump appointed as a national security adviser, is “the template for a swamp creature,” Mr. Kennedy said.

Scott Gottlieb, who President Trump named to run the FDA, “was Pfizer’s business partner” and eventually returned to Pfizer, Mr. Kennedy said.

Mr. Kennedy said that President Trump had more lobbyists running federal agencies than any president in U.S. history.

“You can’t reform them when you’ve got the swamp creatures running them, and I’m not going to do that. I’m going to do something different,” Mr. Kennedy said.

During the COVID-19 pandemic, President Trump “did not ask the questions that he should have,” he believes.

President Trump “knew that lockdowns were wrong” and then “agreed to lockdowns,” Mr. Kennedy said.

He also “knew that hydroxychloroquine worked, he said it,” Mr. Kennedy explained, adding that he was eventually “rolled over” by Dr. Anthony Fauci and his advisers.

President Donald Trump greets the crowd before he leaves at the Operation Warp Speed Vaccine Summit in Washington on Dec. 8, 2020. (Tasos Katopodis/Getty Images)

MaryJo Perry, a longtime advocate for vaccine choice and a Trump supporter, thinks votes will be at a premium come Election Day, particularly because the independent and third-party field is becoming more competitive.

Ms. Perry, president of Mississippi Parents for Vaccine Rights, believes advocates for medical freedom could determine who is ultimately president.

She believes that Mr. Kennedy is “pulling votes from Trump” because of the former president’s stance on the vaccines.

“People care about medical freedom. It’s an important issue here in Mississippi, and across the country,” Ms. Perry told The Epoch Times.

“Trump should admit he was wrong about Operation Warp Speed and that COVID vaccines have been dangerous. That would make a difference among people he has offended.”

President Trump won’t lose enough votes to Mr. Kennedy about Operation Warp Speed and COVID vaccines to have a significant impact on the election, Ohio Republican strategist Wes Farno told The Epoch Times.

President Trump won in Ohio by eight percentage points in both 2016 and 2020. The Ohio Republican Party endorsed President Trump for the nomination in 2024.

“The positives of a Trump presidency far outweigh the negatives,” Mr. Farno said. “People are more concerned about their wallet and the economy.

“They are asking themselves if they were better off during President Trump’s term compared to since President Biden took office. The answer to that question is obvious because many Americans are struggling to afford groceries, gas, mortgages, and rent payments.

“America needs President Trump.”

Multiple national polls back Mr. Farno’s view.

As of March 6, the RealClearPolitics average of polls indicates that President Trump has 41.8 percent support in a five-way race that includes President Biden (38.4 percent), Mr. Kennedy (12.7 percent), independent Cornel West (2.6 percent), and Green Party nominee Jill Stein (1.7 percent).

A Pew Research Center study conducted among 10,133 U.S. adults from Feb. 7 to Feb. 11 showed that Democrats and Democrat-leaning independents (42 percent) are more likely than Republicans and GOP-leaning independents (15 percent) to say they have received an updated COVID vaccine.

The poll also reported that just 28 percent of adults say they have received the updated COVID inoculation.

The peer-reviewed multinational study of more than 99 million vaccinated people that Mr. Kennedy referenced in his X post on March 7 was published in the Vaccine journal on Feb. 12.

It aimed to evaluate the risk of 13 adverse events of special interest (AESI) following COVID-19 vaccination. The AESIs spanned three categories—neurological, hematologic (blood), and cardiovascular.

The study reviewed data collected from more than 99 million vaccinated people from eight nations—Argentina, Australia, Canada, Denmark, Finland, France, New Zealand, and Scotland—looking at risks up to 42 days after getting the shots.

Three vaccines—Pfizer and Moderna’s mRNA vaccines as well as AstraZeneca’s viral vector jab—were examined in the study.

Researchers found higher-than-expected cases that they deemed met the threshold to be potential safety signals for multiple AESIs, including for Guillain-Barre syndrome (GBS), cerebral venous sinus thrombosis (CVST), myocarditis, and pericarditis.

A safety signal refers to information that could suggest a potential risk or harm that may be associated with a medical product.

The study identified higher incidences of neurological, cardiovascular, and blood disorder complications than what the researchers expected.

President Trump’s role in Operation Warp Speed, and his continued praise of the COVID vaccine, remains a concern for some voters, including those who still support him.

Krista Cobb is a 40-year-old mother in western Ohio. She voted for President Trump in 2020 and said she would cast her vote for him this November, but she was stunned when she saw his response to President Biden about the COVID-19 vaccine during the State of the Union address.

I love President Trump and support his policies, but at this point, he has to know they [advisers and health officials] lied about the shot,” Ms. Cobb told The Epoch Times.

“If he continues to promote it, especially after all of the hearings they’ve had about it in Congress, the side effects, and cover-ups on Capitol Hill, at what point does he become the same as the people who have lied?” Ms. Cobb added.

“I think he should distance himself from talk about Operation Warp Speed and even admit that he was wrong—that the vaccines have not had the impact he was told they would have. If he did that, people would respect him even more.”

Tyler Durden Mon, 03/11/2024 - 17:00

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There will soon be one million seats on this popular Amtrak route

“More people are taking the train than ever before,” says Amtrak’s Executive Vice President.

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While the size of the United States makes it hard for it to compete with the inter-city train access available in places like Japan and many European countries, Amtrak trains are a very popular transportation option in certain pockets of the country — so much so that the country’s national railway company is expanding its Northeast Corridor by more than one million seats.

Related: This is what it's like to take a 19-hour train from New York to Chicago

Running from Boston all the way south to Washington, D.C., the route is one of the most popular as it passes through the most densely populated part of the country and serves as a commuter train for those who need to go between East Coast cities such as New York and Philadelphia for business.

Veronika Bondarenko captured this photo of New York’s Moynihan Train Hall. 

Veronika Bondarenko

Amtrak launches new routes, promises travelers ‘additional travel options’

Earlier this month, Amtrak announced that it was adding four additional Northeastern routes to its schedule — two more routes between New York’s Penn Station and Union Station in Washington, D.C. on the weekend, a new early-morning weekday route between New York and Philadelphia’s William H. Gray III 30th Street Station and a weekend route between Philadelphia and Boston’s South Station.

More Travel:

According to Amtrak, these additions will increase Northeast Corridor’s service by 20% on the weekdays and 10% on the weekends for a total of one million additional seats when counted by how many will ride the corridor over the year.

“More people are taking the train than ever before and we’re proud to offer our customers additional travel options when they ride with us on the Northeast Regional,” Amtrak Executive Vice President and Chief Commercial Officer Eliot Hamlisch said in a statement on the new routes. “The Northeast Regional gets you where you want to go comfortably, conveniently and sustainably as you breeze past traffic on I-95 for a more enjoyable travel experience.”

Here are some of the other Amtrak changes you can expect to see

Amtrak also said that, in the 2023 financial year, the Northeast Corridor had nearly 9.2 million riders — 8% more than it had pre-pandemic and a 29% increase from 2022. The higher demand, particularly during both off-peak hours and the time when many business travelers use to get to work, is pushing Amtrak to invest into this corridor in particular.

To reach more customers, Amtrak has also made several changes to both its routes and pricing system. In the fall of 2023, it introduced a type of new “Night Owl Fare” — if traveling during very late or very early hours, one can go between cities like New York and Philadelphia or Philadelphia and Washington. D.C. for $5 to $15.

As travel on the same routes during peak hours can reach as much as $300, this was a deliberate move to reach those who have the flexibility of time and might have otherwise preferred more affordable methods of transportation such as the bus. After seeing strong uptake, Amtrak added this type of fare to more Boston routes.

The largest distances, such as the ones between Boston and New York or New York and Washington, are available at the lowest rate for $20.

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