Managing Expectations Down

This week’s initial peek at the March economic profile for the US via Markit’s survey data for manufacturing delivered upbeat news, which takes some of the edge off for expecting trouble. Later today we’ll see the equivalent for the services sector. Economists via’s consensus forecast are anticipating that the PMI Services Index will hold on to recent gains, in which case we’ll have a new clue for expecting brisk growth for this corner of the economy. But while the tail-end of the first-quarter is showing mild signs of revival, the outlook for Q1 GDP continues to stumble.
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US REITs Retain Their Lead As Commodities Trend Lower
ETF Performance Review: Major Asset Classes | 24 Mar 2015

US Real estate investment trusts (REITs) are still firmly in the lead among the major asset classes for the trailing one-year period. The Vanguard REIT (VNQ) has gained a hefty 28.6% on a total return basis through yesterday (Mar. 24) over the past 250 trading days (aka the one-year performance window). For the moment, no other broadly defined asset group comes close to that red-hot record.
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Initial Guidance | 25 March 2015

● New-home sales in US soar to 7-year high in Feb | USA Today
● U.S. consumer prices rebound, underlying inflation firming | Reuters
● US Manufacturing PMI hits five-month high in March | Markit
● French Business Confidence Weakens In March, But Near Long-Term Avg | RTT
● Germnay’s Ifo Business Climate Index Edges Upwards | Ifo
● Oil prices dip as China’s strategic reserves fill, U.S. stocks balloon | Reuters

US Manufacturing Activity Perks Up In March

The case for expecting trouble for the US economy looks a bit weaker in light of today’s update on manufacturing activity in March. Markit’s flash estimate of its purchasing managers index (PMI) for this cyclically sensitive sector ticked higher for this month. Score one for the optimists who say that the recent run of soft numbers is only a temporary affair born of a harsh winter.
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First, Do No Harm

It’s only natural that investors have a preference for focusing on the positive. Everyone wants to earn higher returns and excel in all things financial. But for most folks, there’s more opportunity on the negative side of money management: reducing if not eliminating the mistakes. It’s easier to add value by pinching errors vs. trying to emulate Warren Buffett. But this subtle but powerful truism is too often overlooked, which probably explains why market-trailing returns are the rule rather than the exception.
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Initial Guidance | 24 March 2015

● US existing-home sales rise 1.2% in February | USA Today
● Chicago Fed: US economic growth slows in February |
● PMI: Eurozone growth gathers momentum, near 4-year high | Markit
● PMI: German private sector output rises at strongest rate in 8 months | Markit
● PMI: French output rises for 2nd successive month in March | Markit
● PMI: China’s factory output contracts, touching 11-mo low | Markit
● PMI: Japan’s production growth slows to weakest since Oct 2014 | Markit

Chicago Fed: US Growth Decelerates To 12-Month Low In February

The US economy expanded at the slowest rate in a year in February, according to this morning’s update of the Chicago Fed National Activity Index. The three-month moving average of this business cycle benchmark (CFNAI-MA3) decelerated to -0.08 last month vs. +0.26 in January. Last month’s pace is the slowest reading since Feb. 2014 for the CFNAI-MA3 data. As a result, the US economic trend slipped to a slightly below-trend pace for the first time in 12 months.
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