US equities led most markets higher last week, posting the strongest gain among the major asset classes, based on a set of exchange-traded products. Meanwhile, real estate investment trusts (REITs) in the US suffered the biggest weekly loss, extending a slide for this yield-sensitive sector in the wake of rising Treasury yields.
US immigration deal’s prospects fade in wake of Trump comments: Fox
Thousands flee in Philippines on warnings of imminent volcano eruption: CNN
Hawaii issues false alert about missile attack: New York
Euro reaches three-year high against US dollar: Reuters
US retail spending rises 0.4% in Dec, matching expectations: RTT
US core consumer inflation in Dec rises the most in 11 months: Reuters
Nov business inventories in US post biggest rise since Aug: Dow Jones
China’s retail sales expected to match US spending in 2018: WaPo
The US stock jumped to another record high yesterday, providing more fuel to keep the momentum factor sizzling. All the major factor strategies are posting solid one-year returns these days, but momentum’s trend remains a bullish outlier, based on a set of proxy ETFs.
Trump expected to extend sanctions relief to Iran: Reuters
German Chancellor Merkel’s party achieves breakthrough to form gov’t: Reuters
Trump’s crude comments about immigrants trigger int’l reaction: BBC
China-N. Korea trade fell sharply in 2017: CNBC
Citing tax reform, Wal-Mart boosts minimum wage to $11/hr: Bloomberg
Wal-Mart announces it’s closing dozens of its Sam’s Club stores: USA Today
US jobless claims rise to highest level since September: Dow Jones
Producer price inflation in US slips in Dec–first decline since 2016: TheSteet.com
Brent crude briefly tops $70/bbl for first time since 2014: Reuters
We interrupt our regularly scheduled review of markets and economics to consider President Trump’s latest comments on US libel laws. His remarks on Wednesday suggest that the White House will lead a new effort to revise long-standing legal standards that are directly related to the Constitution’s First Amendment rights and freedom of the press – the bedrock of US democracy. The administration doesn’t have the power to rewrite libel laws and it’s doubtful that the Supreme Court will be swayed to revisit the subject. That leaves the possibility of a constitutional amendment to effect any revision, but that’s even more unlikely, if only because introducing legislation through this channel is a long and winding road.
Trump may be preparing to withdraw from Nafta trade pact: Bloomberg
New York City sues big oil over climate change: AP
IRS under pressure to reduce withholding taxes ahead of election: Politico
Trump says US libel laws are a “sham” and vows to “take a strong look”: CNBC
US import prices barely budged in Dec: Dow Jones
Businesses trim year-ahead inflation expectations to 2.0%: Atlanta Fed
Policy change for bond buying by central banks worries investors: NY Times
South Korea plans to ban cryptocurrency trading: Reuters
US wholesale inventories rebounded sharply in December: RTT
What might trigger the next financial crisis and recession? Private debt tops the list, explains Steve Keen, an economics professor who heads the School of Economics, Politics and History at Kingston University. It’s a potent threat, in part because debt has increased since the 2008 financial crisis and interest rates appear poised to trend higher in the years ahead. Yet the risk bound up with private debt is widely underappreciated in the economics profession, Keen explains in his recent book: Can We Avoid Another Financial Crisis? “Even after the [last] crisis, mainstream economists still reject out of hand arguments that the aggregate level and rate of change of debt matters,” he writes. History suggests otherwise, Keen insists, citing the empirical record as proof. The Capital Spectator recently asked Keen for a summary of why debt matters for the business cycle and how the US and other economies currently rank on this critical risk factor.
Federal judge rules in favor of DACA immigration program: The Hill
Trump voices willingness to deal on immigration legislation: Bloomberg
Federal court rules against GOP re: gerrymandering districts: The Atlantic
Iran’s supreme leader calls for revenge against US for recent protests: NY Times
S. Korea’s president cites Trump as factor for new talks with N. Korea: NY Times
World Bank predicts global growth will peak this year: The Telegraph
Job openings in US fall to six-month low in Nov: Reuters
US Small Business Optimism Index remains close to record high in Dec: NFIB
The path to approval of a bitcoin ETF still faces high regulatory hurdles: Reuters
US 10-year Treasury yield rises to 2.55%, a 10-month high: Reuters
US stocks ticked up to another record close yesterday (Jan. 8) – the fifth consecutive trading day with a new high, based on the S&P 500 Index. For much of the last two years, in fact, equities been rising steadily and forging new peaks with remarkably low levels of volatility. How long can the calm endure? No one knows, but it’s a safe bet that at some point the market’s tranquility will end. Low-vol regimes aren’t unusual for the stock market, but they come with a limited shelf life. What are the warning signs that will signal regime shift? Let’s consider some possibilities, including a pair of metrics to monitor the trend that may help us decide when the jig is up.