Early Estimates See Slower-But-Still-Strong Growth For US Q3 GDP

The first official third-quarter report on US GDP is more than two months away, but the preliminary nowcasts point to a softer-but-still-solid gain, based on several estimates compiled by The Capital Spectator. The question is whether escalating trade-war tension and Turkey’s financial crisis that’s roiling emerging markets will take a bite out of the rosy projections for the US?
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Macro Briefing: 14 August 2018

Fed expected to keep raise rates despite economic turmoil in Turkey: Bloomberg
European banks remain under pressure amid Turkey’s currency crisis: Reuters
Strategists outline four paths to resolve Turkey’s financial crisis: MarketWatch
Slower credit growth in China raises economic concern: Bloomberg
US passed a new law that strengthens govt’s hand in foreign business deals: BBC
W. Virginia lawmakers vote to impeach 4 justices on state’s highest court: The Hill
Congressional Budget Office trims forecast for US economic growth: CBO
Vanguard FTSE Emg Markets ETF (VWO) near 1yr low as Turkey’s crisis deepens:

Macro Briefing: 13 August 2018

World equity markets drop to 1-month low amid Turkish currency crisis: Reuters
Turkey begins to bolster financial system after currency plunge: Bloomberg
North and South Korean leaders agree to meet for 3rd time: CNN
Euro falls to 13-month low: Reuters
Indian rupee traded at record low vs. dollar on Monday: CNBC
Vanguard sees US recession risk rising: NY Times
US core inflation up by the most in July in 10 years: Bloomberg
Rising concerns about trade tariffs transcend political parties in US: UoM

Book Bits | 11 August 2018

Dopesick: Dealers, Doctors, and the Drug Company that Addicted America
By Beth Macy
Review via The Seattle Times
The numbers are overwhelming: 63,632 Americans died of a drug overdose in 2016, according to the Centers for Disease Control and Prevention. Almost two-thirds of those deaths were from a prescription or illicit opioid, and the government report was unusually blunt: “America’s overdose epidemic is spreading geographically and increasing across demographic groups.” Drug overdose, Macy writes, “is now the leading cause of death for Americans under the age of fifty, killing more people than guns or car accidents, at a rate higher than the HIV epidemic at its peak.”
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Are Low Equity Sector Correlations A Warning Sign For Stocks?

James Paulsen, chief investment strategist at Leuthold Group, sees trouble brewing in the growing disconnect between US equity sectors. He told CNBC earlier this week that correlations among US equities is unusually low and flashing a warning signal. That’s an especially dangerous sign when the stock market’s valuation is so high. Let’s dig deeper into the topic by crunching correlations on the major sector ETFs along with a broad equity market fund.
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Macro Briefing: 10 August 2018

Turkey edges closer to a full-blown financial meltdown: Bloomberg
Senate considers more sanctions on Russia: CNBC
Russia denounces latest round of US sanctions: Reuters
Bloomberg’s US consumer sentiment index rose to 17-year high: Bloomberg
Pence calls for US to develop space force: NY Times
Chicago Fed President: Inflation to hold at around 2%, the Fed’s target: MNI
US jobless claims continue to trend lower, down to low 213,000: MarketWatch
Wholesale trade inventories in US revised up to 0.6% gain for May: CNBC
Don’t confuse a highly valued stock market with an overvalued one: ETF.com
New research challenges loss aversion in behavioral economics: Bloomberg
US producer prices unchanged in July, pointing to tame inflation: CNBC

5-Year Treasury Market’s Inflation Forecast Dips To 3-Month Low

Economists are expecting that US consumer inflation will hold steady in tomorrow’s July update while Fed funds futures are pricing in another rate hike at next month Federal Reserve meeting. Yet the implied inflation outlook via 5-year Treasuries bears watching in the days ahead as it suggests that a new round of disinflation could be brewing. If so, the case may be weakening for another dose of monetary tightening.
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Macro Briefing: 9 August 2018

Israel and Gaza launch missile attacks on each other: BBC
Ohio race inspires Dems to see path to House takeover in fall: The Hill
China responds in kind with latest round of US trade tariffs: MW
Trade war with US causing rifts within China’s leadership: Reuters
Turkey’s currency at new low against dollar as tensions with US rise: Bloomberg
US will impose new sanctions on Russia for nerve agent attack in UK: Reuters
World’s key central banks raising rates despite macro risks: Bloomberg
NYC puts restrictions on Uber and other ride-sharing services: CBS
Policy sensitive 2 year Treasury yield, at 2.68%, holds near 10-year high: