Macro Briefing: 11 June 2019

Trump will raise Chinese tariffs if Xi doesn’t meet at G20: Bloomberg
Mnuchin: China is letting its currency weaken to offset tariffs: SCMP
Will more tariffs on China push US into recession? CNBC
California to offer health care to illegal immigrants: BBC
Half brother of N. Korean leader was a CIA source: WSJ
Are the Hong Kong protests the last battle for Chinese democracy? Slate
Swollen rivers are economic headache for US Midwest & South: NY Times
US job openings fell slightly in April as hiring rose to record high: Reuters

Macro Briefing: 10 June 2019

Trump claims victory over Mexico border conflict but is it a mirage? CNN
Revised US-Mexico trade bill’s future uncertain due to politics: Bloomberg
Treasury Sec. Mnuchin defends using security and economics as US policy: CNBC
G-20 finance officials vow to protect global growth: MW
Hong Kong pushes China extradition bill despite protests: Reuters
A Fed rate cut appears likely, but when? Bloomberg
China’s imports fell sharply in May due to soft domestic demand: WSJ
Brexit woes weigh on UK economy, which fell sharply in April: Reuters
China warns tech firms against cooperating with US ban: NY Times
Will fighting economic wars near and far pay off for the US? NY Times
US hiring in May slows to 1.6% annual pace, slowest in over a year:

Book Bits | 8 June 2019

Rockonomics: A Backstage Tour of What the Music Industry Can Teach Us about Economics and Life
By Alan B. Krueger
Review via The New York Times
Mr. Krueger has a “knack of identifying important questions that he could convincingly answer with the data and data-analysis tools at his disposal,” as his former teacher, Lawrence Summers, wrote in a Washington Post op-ed after his death. And while “Rockonomics” does make ample use of data, it is the dozens of interviews Mr. Krueger conducted with industry artists, lawyers and executives that frame its highly personal preoccupations. Rather than just provide a tutorial in media economics, Professor Krueger schools us in the costs and benefits of creativity itself.
The result is a wide-ranging work that touches on topics as diverse as industry structure, personal financial management, income inequality, depression and intellectual property rights. The author’s sparkling intelligence and lively prose make for a thought-provoking and enjoyable read. But the sheer breadth of subjects makes it impossible to fully explore each of them.
Continue reading

US Labor Market Growth Was Surprisingly Weak In May

US companies added just 90,000 workers in May, according to today’s payrolls report from the Labor Department. The soft gain surprised analysts and marks a hefty slowdown from April’s solid 205,000 increase. The deceleration in growth is worrisome, although mostly because it reflects uncertainty about President Trump’s trade war with China and, more recently, Mexico. If and when these battles end, or at least cool, it’s reasonable to assume that the labor market will rebound. Meantime, employers are taking a cautious approach to hiring.

Continue reading

Profiling Monetary Policy’s Influence On The Stock Market

Most investors recognize that central banks are a key driver in the ebb and flow of equity prices through time. But the relationship between interest rates, monetary policy and the stock market is constantly evolving. Some analysts advise that in recent years this link has become unusually influential. As we’ll see, that’s a theory that finds support in the data.

Continue reading

Macro Briefing: 7 June 2019

Trump plans to declare new nat’l emergency to impose tariffs: The Hill
Progress reported in US-Mexico trade talks: Reuters
Strong US job growth expected in today’s update for May: Reuters
Is US recession worry overblown? WSJ
Fed faces challenges in offsetting headwinds from trade conflicts: CNBC
German industrial product fell sharply in April: MW
US imports and exports tumbled in April as trade gap narrowed: Bloomberg
US job cuts surged in May, lifting annual change to +86%: CG&C
Jobless claims in US hold steady at low level: CNBC

Macro Briefing: 6 June 2019

Trump: more progress needed to avert new tariffs on Mexico: BBC
US plans arms package for Taiwain despite China’s protests: Bloomberg
Fed’s Beige Book: US economy expanded at ‘moderate pace’: MW
German factory orders rose more than expected in April: Bloomberg
Are markets overpricing the odds of a Fed rate cut? CNBC
Oil prices slide on weaker economic outlook: NY Times
Global growth slowed to 3-year low in May: IHS Markit
US ISM Non-Mfg Index rose more than expected in May: CNBC
US Services PMI for May reflects slowest growth since 2016: IHS Markit
US private employment growth slowed sharply in May: ADP

Two Yield Spreads Are Better Than One For Business Cycle Analysis

The US recession warnings are flying every which way lately in the wake of an inverted yield curve. The spread on the 10-year less 3-month yields in particular has unleashed a wave of predictions that a new downturn is near. But some analysts point out that another widely followed spread — 10-year less 2-year yields – is still positive, albeit modestly so. What’s an informed investor to do? Wait for both spreads to confirm a recession forecast before betting the farm on contraction.

Continue reading