Monthly Archives: August 2020

Macro Briefing | 31 August 2020

FDA to expedite coronavirus vaccine before phase three trials end: CNBC
One dead in clash between Trump supporters and Oregon protesters: AP
Dems consider response after US intel chief ends election security briefings: USAT
Belarus protests continue, calling for president to step down: BBC
Does the Fed have the tools to carry out its new monetary policy? WSJ
Buffett’s Berkshire Hathaway buys stakes in Japanese trading firms: CNBC
US consumer spending growth slowed in July, rising for 3rd straight month: CNBC

Book Bits | 29 August 2020

2030: How Today’s Biggest Trends Will Collide and Reshape the Future of Everything
Mauro F. Guillen
Review via Eurasia Review
“Ideas are like rabbits. You get a couple and learn how to handle them, and pretty soon you have a dozen.” This John Steinbeck quote, featured in the concluding chapter of Mauro F. Guillen’s 2030: How Today’s Biggest Trends Will Collide and Reshape the Future of Everything, is quite apt. 2030 is full of hypotheses and projections about, well, the state of the world in the year 2030. The most obvious place to start would be shifting demographics. The book spends much of its time writing about how the human population will look vastly different by 2030.

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The ETF Portfolio Strategist: Risk-On Rolls On

Another week, another risk-on rally. US stocks continued to be a leader this week in global markets. SPDR S&P 500 (SPY) surged 3.3% at the close of the trading week (Aug. 28), marking the fund’s fifth straight weekly advance. Bonds, however, hit a rough patch. Vanguard Total US Bond Market (BND) fell 0.6% this week – the second weekly loss in the past three.

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Research Review | 28 August 2020 | Portfolio Strategy

Fire Sale Risk and Expected Stock Returns
George O. Aragon (Arizona State U.) and Min S. Kim (Michigan State U.)
July 29, 2020
We measure a stock’s exposure to fire sale risk through its ownership links to equity mutual funds that experience outflows during periods of systematic outflows from the fund industry. We find that more exposed stocks earn higher average returns: a portfolio that buys (shorts) stocks with the highest (lowest) exposure outperforms by 3-7% per annum. Our findings cannot be explained by several known determinants of average returns and are consistent with the ex-ante pricing of the risk of future fire sales. We conclude that stocks’ exposures to risks inherited from the constraints of shareholders have important implications for stock prices.

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Macro Briefing | 28 August 2020

Putin warns protesters in Belarus that Russia may intervene: NYT
Japan’s Prime Minister Abe resigns due to health issues: Reuters
Fed’s new inflation policy is greeted with skepticism by some analysts: BBG
Key moments from Trump’s speech on accepting Republican nomination: CNBC
US consumer spending likely increased in today’s upcoming July report: WSJ
Pending homes sales in US rise for third straight month in July: Reuters
Eurozone’s economic sentiment improves for third month in August: Reuters
German consumer morale slips, raising questions about recovery trend: Reuters
KC Fed Mfg Index up moderately in August, improves over June and July: KCF
US Q2 GDP loss revised up slightly to still-deep annualized 31.7% loss: MW
US jobless claims increased 1-million plus for a second week: CNBC

Macro Briefing | 27 August 2020

Hurricane Laura pounds coasts of Texas and Louisiana: USAT
US and Russian military vehicles collide in Syria, injuring US troops: BBC
Turkey to hold military drills in contested area of eastern Mediterranean: Reuters
Another currency crisis stalks Turkey’s economy: NYT
Fed expected to change policy to fight low inflation: CNBC
Fed’s inflation hawk isn’t opposed to letting inflation rise above 2% target: BBG
US durable goods orders continued to rebound at a strong rate in July: MW

Macro Briefing | 26 August 2020

Violent demonstrations in Kenosha, Wisconsin continue for third night: CNN
Hurricane Laura begins to pound Louisiana and Texas coasts: CBS
China says US spy plane disrupted its military exercises: CNN
Economic decoupling of US and China unlikely, says former IMF official: CNBC
Two Hong Kong opposition lawmakers arrested over anti-gov’t protests: BBC
Will proposed cuts in airline workers force an extension of US stimulus? NYT
The Fed may hold its target interest rate at or near zero for years: BBG
World trade rebounded in June with “strong catch-up growth of 7.6%” vs. May: CPB
US home prices rose 4.3% in June vs. year-ago level: CNBC
New home sales in US surged in July, reaching highest level since 2006: MW
Richmond Fed Mfg Index continues to strengthen in August: RF
US Consumer Confidence Index slips to 6-year low in August: MW