Will Value Stocks Overtake Growth Shares After The Election?

Citigroup analysts say the probability is rising for a recovery in the value risk factor, which has trailed the equivalent for growth stocks in recent years. It’s anyone’s guess if they’re right. The market gods are consistently shy about revealing such insights in advance. Perhaps, then, it’s no surprise that many forecasts in recent years have argued that value is on the cusp of a rebound only to see the relentless dominance in growth persist. But maybe it’s different this time.

Continue reading

Macro Briefing: 15 October 2020

Half of Americans say they would be reluctant to take new Covid-19 vaccine: WSJ
Europe battling resurgent coronavirus infections: CNBC
Thailand bans large gatherings amid pro-democracy protests: CNN
China’s consumer inflation eases to slowest in 19 months: Reuters
Record demand for China’s first direct bond offering to US investors: FT
Global oil demand expected to peak in 2030, Int’l Energy Agency predicts: MW
Mexican farmers attack soliders, seize dam in battle over US-directed water: NYT
Wall St trading boosts bank earnings as Main St operations stumble: NYT
Will long-suffering value stocks shine after election? Yes, predicts Citigroup: BBG

The ETF Portfolio Strategist: 14 Oct 2020

Calm Before The Storm? The markets continue to churn but most of the major asset classes continue to go nowhere fast. Surprising? Not really. With the US election less than a month away the markets seem to be holding their collective breath and ponder what may lie in wait on the other side. That starts with the obvious: Who will be president? A worthy question, but that’s just the opening bid.

continue reading at The ETF Portfolio Strategist

Macro Briefing: 14 October 2020

Eli Lilly’s Covid-19 antibody trial on hold due to safety concerns: SN
Supreme Court rules census counting can end before Oct. 31: CNBC
IMF cuts outlook for global growth in 2021: CNN
JPMorgan, Citigroup: US economic rebound continues to face risks: WSJ
Debate over the relevance of the equity size factor is heating up: II
China’s stock market value rises to record high of $10 trillion: FT
US’s weakest local economies face dire outlook in pandemic: Reuters
Eurozone industrial output continued to rise in Aug but at much slower pace: MW
US small business optimism continued to rebound in Sep: NFIB
US core consumer inflation’s 1-year change holds at moderate 1.7% for Sep: LD

Consumer Discretionary, Tech Lead Rebound In US Equity Sectors

All the US equity sectors have bounced off the Mar. 23 broad-market low, with consumer discretionary shares leading the way, based on a set of exchange traded funds through yesterday’s close (Oct. 12). Technology is a close second. On both fronts, the rallies have carried prices well above the broad market’s recovery since the depth of the coronavirus crash in late-March.

Continue reading

Macro Briefing: 13 October 2020

J&J halts Covid-19 vaccine trial due to unexplained illness in participant: SN
Democrats and GOP clash in start of Senate hearing on Barrett: FTE
Contracting Covid-19 a second time is a risk, new study finds: BBG
Drug makers eye the potential for big profits with Covid-19 vaccines: NYT
White House moves forward with arms sales to Taiwan: Reuters
Central banks have moved aggressively this year to finance fiscal spending: BBG
Wall St is looking for the upside in a ‘Blue Wave’: II
UK job cuts rose the most on record for three months through Aug: BBG
German investor sentiment falls more than expected in October: Reuters
Most big economies will struggle to regain this year’s losses in 2021: BBG

Macro Briefing: 12 October 2020

Senate hearing on Amy Coney Barrett begins today: CNN
Reviewing the stakes in the Supreme Court battle over Barrett: BBC
Stimulus talks stall in Senate: Vox
Europe’s economic recovery appears to be fading: NYT
Nobel prize in economics awarded for work on commercial auctions: CNBC
IMF holds annual meeting this week under economic cloud: BBG
China rolls out test of digital currency issued by the central bank: TC
10yr-3mo Treasury yield spread holds near 4-month high:

Book Bits: 10 October 2020

The Death of Human Capital?: Its Failed Promise and How to Renew It in an Age of Disruption
Phillip Brown, et al.
Summary via publisher (Oxford U. Press)
Human capital theory, or the notion that there is a direct relationship between educational investment and individual and national prosperity, has dominated public policy on education and labor for the past fifty years. In The Death of Human Capital?, Phillip Brown, Hugh Lauder, and Sin Yi Cheung argue that the human capital story is one of false promise: investing in learning isn’t the road to higher earnings and national prosperity. Rather than abandoning human capital theory, however, the authors redefine human capital in an age of smart machines. They present a new human capital theory that rejects the view that automation and AI will result in the end of waged work, but see the fundamental problem as a lack of quality jobs offering interesting, worthwhile, and rewarding opportunities.

Continue reading