Trading is set to resume today for the US stock market with value firmly in the lead for year-to-date performance for the major equity factors, based on a set of exchange-traded funds. In fact, a positive bias prevails across the board for stocks so far in 2019. Headwinds may be brewing via several areas of concern, including softer global growth and the ongoing partial government shutdown. But as the crowd returns to work after a long weekend, value enjoys a sizable performance edge in the new year.
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Macro Briefing: 22 January 2019
Senate unlikely to approve Trump’s plan to reopen gov’t: WSJ
Taliban attack on military base in Afghanistan kills dozens: NBC
Report finds a new previously undisclosed missile base in N. Korea: USA Today
China warns US and Canada on extradition of Huawei exec: SCMP
UK’s Labour Party moves closer to securing 2nd Brexit referendum: Reuters
US recession worries are on the rise: CNN
Americans’ outlook for economy has soured in the past 2 months: Gallup
IMF trims 2019 growth estimates for global economy: IMF
US Stocks Led Last Week’s Rebound
Global equities, real estate and commodities posted solid gains last week, offsetting losses in bonds. Overall, it was a mixed week for the major asset classes, but an upside bias clearly dominated.
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Macro Briefing: 21 January 2019
China’s economic growth decelerated to 28-year low in 2018: CNBC
Israel attacked Iranian forces in Syria: NBC
Is the Fed the source of this year’s rebound in stocks? NY Times
Senate GOP leader to introduce bill this week to reopen gov’t: Politico
Trump-Pelosi battle rages on over gov’t shutdown: WaPo
Missing US economic data due to shutdown leaves hole for macro analysis: MW
The rich have become richer since the financial crisis: Bloomberg
Consumer sentiment in US fell sharply in January: MW
US industrial output rebounded in Dec, but annual pace eased to 4.0%: CNBC
Book Bits | 19 January 2019
By Shoshana Zuboff
Review via Los Angeles Review of Books
Silicon Valley’s Phoenix-like resurrection is a story of ingenuity and initiative. It is also a story of callousness, predation, and deceit. Harvard Business School professor emerita Shoshana Zuboff argues in her new book that the Valley’s wealth and power are predicated on an insidious, essentially pathological form of private enterprise — what she calls “surveillance capitalism.” Pioneered by Google, perfected by Facebook, and now spreading throughout the economy, surveillance capitalism uses human life as its raw material. Our everyday experiences, distilled into data, have become a privately owned business asset used to predict and mold our behavior, whether we’re shopping or socializing, working or voting.
Zuboff’s fierce indictment of the big internet firms goes beyond the usual condemnations of privacy violations and monopolistic practices. To her, such criticisms are sideshows, distractions that blind us to a graver danger: By reengineering the economy and society to their own benefit, Google and Facebook are perverting capitalism in a way that undermines personal freedom and corrodes democracy.
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US Business Cycle Risk Report | 18 January 2019
The odds are still low that a new US recession has started, but economic momentum continues to slow. The headwinds remain moderate so far, but the potential for trouble later in the year is rising, in part due to the partial government shutdown.
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Macro Briefing: 18 January 2019
Trump blocks Pelosi’s overseas trip, citing gov’t shutdown: WSJ
Trump-Pelosi feud dims prospects for quick end to gov’t shutdown: Bloomberg
Key dates to watch for monitoring partial gov’t shutdown: CNBC
N. Korea and US planning to discuss possibility of 2nd Trump-Kim summit: Reuters
Signs of progress on US-China trade dispute support global stock markets: Reuters
BuildFax data suggests US housing starts fell in Dec: MW
US jobless claims fell more than expected last week: CNBC
Philly Fed Mfg index strengthens in January: MW
Global Economic Policy Uncertainty Index surged in 2018: Axios
Will Shutdown Risk End This Year’s Equity Sector Rallies?
The partial government shutdown could be a slow-moving train wreck for the US economy, but for the moment the crowd’s inclined to reprice the major equity sectors higher in the new year following 2018’s haircut. With the exception of utilities, year-to-date returns are positive across the board through yesterday’s close (Jan. 16), based on a set of sector ETFs.
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Macro Briefing: 17 January 2019
Pelosi urges Trump to delay State of the Union address: WSJ
UK’s May survives no-confidence vote: BBC
Jack Bogle, who launched index fund revolution, dies at age 89: CNBC
ISIS attack on US forces in Syria refocuses attention on US withdrawal: CNBC
US economy is ‘flying blind’ due to partial gov’t shutdown: Brookings
Half of debt in investment-grade bond funds are rated just above junk: WM
Business inflation expectations fell to 8mo low of 2.0% in Jan: Atlanta Fed
Import prices for US fell in Dec–largest drop since 2016: CNBC
Fed’s Beige Book: Concern among US businesses rising: WSJ
US homebuilder sentiment rises in Jan following 3-year low: MW
The Shutdown Begins To Weigh On The Economic Outlook
Will the US government’s stalemate over budget negotiations trigger a recession? In “normal” times this question would be dismissed as absurd. But the times they are a changin’.
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