The US economic profile hit some turbulence in yesterday’s updates on retail sales and consumer inflation in January. The surprisingly soft spending data suggest that the macro trend has moderated in the kickoff to 2018 while pricing pressure can no longer be counted on to remain unusually low. Reviewing the latest reports in terms of annual changes raises fresh concerns for the months ahead, but it’s still premature read the updates as clear warning signs for the economy.
Shooting at Florida high school claims 17 victims: Sun Sentinel
S. Africa’s president resigns, leaving a challenge for successor: Bloomberg
US consumer inflation up more than expected in January: Reuters
US retail spending was broadly lower in January: USA Today
Weak retail sales and higher inflation may overstate macro headwinds: Bloomberg
BofA Merrill Lynch survey: 70% of fund managers see trouble ahead: MarketWatch
Dec US business inventories increased more than expected: MarketWatch
Businesses’ Year-Ahead Inflation Expectations Hold Steady: Atlanta Fed
Revised data shows Eurozone Q4 GDP growth was strong at 0.6%: RTT
GDPNow estimate for US Q1 growth decelerates to 3.2%: Atlanta Fed
The Treasury’s market’s implied inflation forecast last week reached the highest level since 2014, reflecting growing concern that pricing pressure is heating up. But the reflation trade has cooled this week, providing support for some analysts who argue that inflation fears are exaggerated. A reality check is due to arrive in today’s January update on the Consumer Price Index (CPI).
US forces killed dozens of Russian mercenaries in Syria last week: Bloomberg
US intelligence agencies: Russia may interfere in Nov election: Reuters
Cleveland Fed’s Mester could be the Fed’s next vice chair: WSJ
US small business optimism rose more than forecast in Jan: Bloomberg
Is Wall Street’s inflation fear overblown? MarketWatch
Japan’s current expansion is the longest since the 1980s: Reuters
California is booming, but is also preparing for the next recession: NY Times
Weak recovery due to low productivity growth, falling labor participation: SF Fed
The recent spike in stock market volatility has dented the momentum factor’s powerful bull run, but the strategy continues to reign supreme over its main competitors in the US equity factor space, based on a set of proxy ETFs.
Trump’s infrastructure plan receives mixed reviews in Congress: The Hill
White House budget allows for hefty increases in federal deficit: NY Times
China may impose anti-dumping duties amid trade tensions: AP
Will US economic growth reduce the risk of bear market in stocks? Reuters
Turmoil in US markets and fiscal policy inspire broader int’l allocation: Reuters
US Treasury runs $49 bill. budget surplus, down slightly from year ago: MW
Goldman Sachs predicts 10-year Treasury will rise to 3.5%: Bloomberg
10-year yield continued rising on Monday, reaching 2.86% — a new 4-year high:
Red ink continued to spill across all the major asset classes last week, based on a set of exchange-traded products. The declines mark the second straight week of across-the-board selling.
Trump will roll out $1.5 trillion infrastructure plan on Monday: Politico
US budget director: rates may “spike” due to jump in budget deficit: Bloomberg
Vice President Pence raises possibility of US-North Korea talks: Reuters
White House staff roiled by domestic abuse allegations: The Hill
Is the UK considering a second Brexit vote? NY Times
US wholesale trade inventories rise more than expected in Dec: RTT
Capital Group Chairman and CEO: return of volatility is healthy: Capital Group
The era of big US deficits is back: NY Times
● Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts
By Annie Duke
Summary via publisher (Portfolio)
Annie Duke, a former World Series of Poker champion turned business consultant, draws on examples from business, sports, politics, and (of course) poker to share tools anyone can use to embrace uncertainty and make better decisions. For most people, it’s difficult to say “I’m not sure” in a world that values and, even, rewards the appearance of certainty. But professional poker players are comfortable with the fact that great decisions don’t always lead to great outcomes and bad decisions don’t always lead to bad outcomes.
The latest plunge in the US stock market left the S&P 500’s drawdown at a bit more than 10%. That’s the amount of red ink that brings usually out the “correction” label. The latest slide has also inspired fresh chatter about the possibility that a bear market is near, which is widely defined as a drop of 20%-plus.