Macro Briefing: 15 April 2019

Mueller report set for public release this week: Bloomberg
EU set to start delayed trade talks with US: Reuters
Signs of a US-China trade deal help lift Asian stocks: MW
Outlook improves for China’s economy: CNBC
Former central bankers: Trump’s attacks threaten Fed’s independence: WSJ
A thicket of politics and economics await Fed Chairman Powell: NY Times
Will the arrival of spring provide a boost to US economic growth? MW
Rising fuel prices drive US import prices higher for third month in March: CNBC
US Consumer Sentiment Index eased in April; first slide in 3 months: Bloomberg

Book Bits | 13 April 2019

Big Business:
A Love Letter to an American Anti-Hero

By Tyler Cowen
Review via Reason
Could it be that you are getting a better deal from big technology companies than you realize? George Mason University economist Tyler Cowen thinks so, and he has penned a new book to convince you that you should love big businesses as much as he does.
It’s called Big Business: A Love Letter to An American Anti-Hero, and it indeed sings the praises of today’s bêtes noires. In true Cowenesque fashion, the book starts out with a markedly contrarian premise that by the last page seems so evident that you wonder why it first felt outlandish at all. Even the most dogged big business critic may feel just a little tenderer towards today’s titans by the end (whether they want to admit it or not).
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Research Review | 12 April 2019 | Portfolio Management

Strategic Rebalancing
Nicolas Granger (Man AHL), et al.
April 3, 2019
A mechanical rebalancing strategy, such as a monthly or quarterly reallocation towards fixed portfolio weights, is an active strategy. Winning asset classes are sold and losers are bought. During crises, when markets are often trending, this can lead to substantially larger drawdowns than a buy-and-hold strategy. Our paper shows that the negative convexity induced by rebalancing can be substantially mitigated, taking the popular 60-40 stock-bond portfolio as our use case. One alternative is an allocation to a trend-following strategy. The positive convexity of this overlay tends to counter the impact on drawdowns of the mechanical rebalancing strategy. The second alternative we call strategic rebalancing, which uses smart rebalancing timing based on trend-following signals – without a direct allocation to a trend-following strategy. For example, if the trend-following model suggests that stock markets are in a negative trend, rebalancing is delayed.
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Macro Briefing: 12 April 2019

Fed has become too dovish, says Allianz’s chief economic advisor: CNBC
Herman Cain’s prospects for joining Fed lose key GOP support: Fox
Eurozone industrial output falls less than forecast in February: Reuters
China’s exports rebounded in March as imports fell more than expected: Reuters
Credit growth revives in China, suggesting firmer economic growth: Bloomberg
Investors consider the rising risk of an earnings recession: MW
US wholesale prices rose sharply in March, driven by higher gasoline prices: MW
US jobless claims fell below 200,000 last week for first time since 1969: CNBC

Macro Briefing: 11 April 2019

WikiLeaks co-founder Julian Assange reportedly arrested in London: CNBC
Treasury misses deadline for sending Trump’s tax returns to Congress: Politico
US and China agree to trade deal enforcement offices: Reuters
EU allows UK to delay Brexit until Oct 31: BBC
China’s consumer inflation rose sharply in March: CNBC
Fed minutes: economy could move interest rates in ‘either direction’: BR
Asset-management firm Guggenheim expects next recession will be mild: MW
Businesses expect inflation will hold steady at 1.9% annual pace: Atlanta Fed
US consumer inflation popped in March, but core 1yr trend slipped to 13-mo low:

Macro Briefing: 10 April 2019

Israeli Prime Minister Benjamin Netanyahu wins re-election in close race: Reuters
US sends warship to disputed area in S. China Sea in signal to Beijing: Bloomberg
Europe Union expected to grant extension to UK for Brexit deadline: CNBC
Trump to sign exec. order to stop states from blocking oil pipelines: CNBC
Barr says he’ll publicly release Mueller report within a week: WSJ
ECB expected to remain cautious in today’s policy decision: Bloomberg
Senate Republicans tell Trump to drop Cain’s nomination to Fed: Politico
US small business optimism holds at ‘historically strong level’ in March: NFIB
Job openings in US fell to 11-month low in February: CNBC

Will The US Economic Expansion Keep The Bull Market Humming?

The US stock market continued to defy gravity and edged up on Monday. The S&P 500 posted its eighth straight daily gain, marking its longest rally since 2017. Meanwhile, another milestone for the market’s bullish momentum is unfolding, based on the length of the increase in equity prices since the end of the last recession. Assuming that the current economic expansion continues through June, the current post-recession rally for the S&P 500 is on track for a record-setting endurance run.
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Macro Briefing: 9 April 2019

US may add new tariffs on EU goods in response to Airbus subsidies: Reuters
Federal judge blocks Trump policy of forcing asylum-seekers to wait in Mexico: Fox
UK’s May to meet with leaders of France and Germany re: Brexit on Tues: MW
Cases of measles recorded in US rose 100% last week: USA Today
Fed says monetary tightening isn’t squeezing economy: CNBC
US factory orders fell in Feb–fourth slide in last five months: MW
US stocks market (S&P 500) up for an eighth straight session: MW