All the major asset classes declined in April’s first week of trading, based on a set of exchange-traded products. The losses market the first broad sweep of weekly red ink for markets since early February.
Syria, Russia say Israel launched missile strike on Syrian air base Wall St Journal
Hungary’s nationalist prime minister wins third term in power: Reuters
Trump predicts China will blink first in trade dispute with US: Bloomberg
Trump administration officials soften tone on trade dispute with China: WSJ
N. Korea says it will discuss denuclearization: NY Times
Kudlow: White House considering plans to undo parts of spending bill: Wash Exam
US hiring growth slowed sharply in March: Bloomberg
German industrial production fell by the most in over 2 years in Feb: Reuters
Forward curve for 1 month overnight indexed swap rate inverts: Bloomberg
Many US state govts struggling with weak revenue growth: The Economist
● Last Resort: The Financial Crisis and the Future of Bailouts
By Eric A. Posner
Summary via publisher (University of Chicago Press)
The bailouts during the recent financial crisis enraged the public. They felt unfair—and counterproductive: people who take risks must be allowed to fail. If we reward firms that make irresponsible investments, costing taxpayers billions of dollars, aren’t we encouraging them to continue to act irresponsibly, setting the stage for future crises? And beyond the ethics of it was the question of whether the government even had the authority to bail out failing firms like Bear Stearns and AIG. The answer, according to Eric A. Posner, is no. The federal government freely and frequently violated the law with the bailouts—but it did so in the public interest.
Companies in the US hired substantially fewer workers in March than economists expected, according to this morning’s monthly update from the Labor Department. But the sharp deceleration in growth looks like monthly noise, based on the steady moderate pace for the year-over-year increase in private employment.
Momentum-based strategies have led the factor-investing horse race for US equities in recent history, but the latest surge in market volatility may be its undoing. For the trailing 30-day period, the momentum factor’s modest loss leaves it in last place, based on a set of ETFs tracking key US-based factor strategies. By contrast, the best-performing factor strategy for this time window – core small-cap stocks – has managed to post a modest increase.
Trump considers an additional $100 billion in tariffs on China’s goods: Retuers
China vows to counter US protectionism “to the end, and at any cost”: Bloomberg
ECB board member says trade fears already pinching economy: Reuters
Fed chair Powell expected to defend gradual rate hikes: MarketWatch
Jobless claims in US jumped to three-month high last week: MarketWatch
US firms announce sharply higher number of job cuts in March: CNBC
US trade deficit near 10-year high in February: Wall St Journal
13 big mutual fund firms agree to rstart reporting active share data: Reuters
Slower labor force growth is a headwind for US GDP growth: SF Federal Reserve
The latest announcements by the US and China to slap trade tariffs on each other could take a bite out of economic growth. But at this stage it’s just talk. The potential for trouble in the months ahead can’t be dismissed. Meantime, the current estimates for first-quarter GDP growth in the US point to a continuation of the moderate expansion that prevailed in the final three months of 2017.
US-China trade battle: minor bump for economy if it doesn’t escalate: USA Today
White House says trade tariff talk is part of a negotiating tactic: NY Times
SE Asia considers trade-war blowback with plans for policy changes: Bloomberg
GOP to Trump: a trade war could have political cost in Nov election: Bloomberg
US expected to impose more sanctions on Russia: Washington Post
ADP: US private employment up a strong 241,000 in March: MarketWatch
ISM Non-Mfg Index posted slower but still-solid growth for US in March: CNBC
PMI: US services sector growth eased in March but remained strong: IHS Markit
Broad-based increase reported for US factory orders in Feb: Reuters
ADP estimate of US private payrolls: +1.9% y-o-y in March, highest in 18 months:
Last month’s review of return correlations highlighted the challenge of finding strong diversification opportunities among the major asset classes for designing and managing portfolios. Does the landscape offer better choices if we expand the opportunity set by adding alternative strategies to the mix?
US lays out plans for tariffs on 1,300 Chinese goods: CNBC
China vows to retaliate on US tariffs with “measures of equal intensity”: Reuters
Japan ponders upcoming meeting with Trump as trade-war risk rises: Reuters
Trump says he’ll send military to secure US-Mexico border: NY Times
Senior China diplomat offers support N. Korea-S.Korea-US summit: AP
Russia, Iran and Turkey meet to discuss Syria: Reuters
San Francisco Fed President named to lead NY Fed: Politico
Global mfg growth slows to five-month low in March: IHS Markit