Monthly Archives: February 2018

US Business Cycle Risk Report | 28 February 2018

Jerome Powell, the newly installed chairman of the Federal Reserve, advised in his public debut as head of the central bank that “there’s always a risk of a recession at any point in time, but I don’t see it as at all high at the moment.” Instead, he told the House Financial Services Committee that “I would expect the next two years on the current path to be good years for the economy.”
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Macro Briefing: 28 February 2018

UN report: N. Korea ‘providing materials’ for Syria chemical weapons: BBC
Fed Chair Powell hints at more than 3 rate hikes this year: CNBC
Global stocks continue to fall after Powell’s comments: Bloomberg
Can the low jobless rate in US continue to fall? No one knows: NY Times
US durable goods orders fell 3.7% in Jan and biz inv slumped again: MW 
US Trade deficit widens in Jan, hinting at more pressure on Q1 GDP: MW
GDPNow estimate of US Q1 GDP growth drops to 2.6%: Atlanta Fed
Wholesale inventories for Jan rise 0.4% in US: CNBC
US house prices still rising, but signs of softer pace emerging: HousingWire 
Richmond Fed Mfg Index rises to 2nd highest level on record: Bond Buyer
How did low-vol strategies fare in recent market turbulence? Wealth Mgt
Treasury yields rise after Fed chair’s testimony in House: Reuters

Macro Briefing: 27 February 2018

IEA: US to overtake Russia as world’s largest oil producer in 2019: Reuters
Gun control efforts face headwinds in Senate: Politico
What to watch for in today’s testimony by Fed Chair Powell: MarketWatch
Global stocks rise to 3-week highs ahead of Fed chief’s debut in Congress: Reuters
St Louis Fed President is”concerned that [rate hikes go] too far too fast”: Reuters
Fed’s Quarles: “I am fairly optimistic about… the economy”: CNBC
US economy expanded at a slightly softer pace in January: Chicago Fed
IRS forces Coinbase, a cryptocurrency broker, to report records: Digital Trends
Dallas Fed: mfg business activity at highest level since 2005: San Antonio Exp News
New home sales in US fell to a 5-month low in Dec: CNBC

Macro Briefing: 26 February 2018

China lays groundwork for Xi Jinping to hold presidency indefinitely: WaPo
Mexico’s president cancels White House visit after call with Trump: LA Times
Treasury yields dip ahead of new Fed chief’s first congressional testimony: MW
Peter Navarro, a trade skeptic in the White House, is promoted: NY Times
Buffett: patience is required in a world of high-priced equities: Bloomberg
Firmer pricing for transport costs point to another inflation factor: Reuters
Data breaches reach an all-time high in 2017: Thales
US flu season is the worst since 2009-2010: FiveThirtyEight
Is factor allocation superior to conventional asset allocation? Alpha Architect
Relative strength in junk bonds may be positive sign for stocks: FMD Capital
Bridgewater’s short on European equities goes into overdrive: Barron’s
US financial stress level ticks lower for first time in five weeks: St. Louis Fed

Book Bits | 24 February 2018

It’s Better Than It Looks: Reasons for Optimism in an Age of Fear
By Gregg Easterbrook
Summary via publisher (Public Affairs)
Is civilization teetering on the edge of a cliff? Or are we just climbing higher than ever? Most people who read the news would tell you that 2017 is one of the worst years in recent memory. We’re facing a series of deeply troubling, even existential problems: fascism, terrorism, environmental collapse, racial and economic inequality, and more. Yet this narrative misses something important: by almost every meaningful measure, the modern world is better than it ever has been. In the United States, disease, crime, discrimination, and most forms of pollution are in long-term decline, while longevity and education keep rising and economic indicators are better than in any past generation. Worldwide, malnutrition and extreme poverty are at historic lows, and the risk of dying by war or violence is the lowest in human history. It’s not a coincidence that we’re confused–our perspectives on the world are blurred by the rise of social media, the machinations of politicians, and our own biases.
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Tech Sector Momentum Still Dominates After Market Turbulence

The surge in market volatility earlier this month took a toll far and wide, but tech’s leadership endures, based on a set of sector ETFs. A fund that holds a diversified mix of technology shares is trading below its recent highs, but the sector has largely bounced back from the early February correction and continues to dominate in the year-over-year column vs. the rest of the field.
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Macro Briefing: 23 February 2018

US set to impose more sanctions on N. Korea: Reuters
Blackrock says it will talk with gunmakers about Florida shooting: Reuters
FCC officially publishes regs that will repeal net neutrality rules in April: Engadget
US jobless claims last week fell to 2nd lowest level since the recession: MW 
Leading Economic Index for US rose in Jan, signaling “robust” growth: Conf. Board
US inflation trend probably ticked up in Feb, according to alt-data estimate: WSJ
Private data suggests China’s economic growth is slowing: Asia Times
Avg college endowment fund lagged stock/bond mix over last decade: NY Times
S&P 500 forward earnings estimates surging in 2018: Yardeni Research