The expected long-run return for the Global Market Index (GMI) ticked up to a 6.0% annualized pace in May, slightly above the previous month’s estimate. The forecast, based on the average estimate for three models (defined below), is near the lower range for realized performance in recent history, based on a rolling 10-year return.
Macro Briefing: 2 June 2023
* Senate passes debt ceiling bill, sending legislation to Biden to avert default
* Global manufacturing output rises in May but new orders continue to fall
* Arizona limits residential construction around Phoenix due to water shortage
* US manufacturing sector continues to contract in May via ISM Mfg Index
* Jobless claims edge up but remain relatively low
* Construction spending in US for April rises well above expections
* US companies hire more workers than expected in May via ADP estimate:
Major Asset Classes | May 2023 | Performance Review
Most of the major asset classes fell in May. The upside exceptions: US stocks and cash. Otherwise, red ink prevailed last month, based on a set of proxy ETFs representing the world’s primary markets.
Macro Briefing: 1 June 2023
* House approves bill to lift debt-ceiling limit, easing default threat
* Senate under pressure to quickly pass debt-ceiling bill
* Eurozone inflation falls more than forecast in May, dropping to 6.1%
* China mfg output growth rises to 11-month high in May via PMI survey
* Eurozone manufacturing recession deepens to six-month low in May
* Fed Beige Book highlights cooling economy
* US births fell slightly in 2022 vs. 2021
* Chicago PMI tumbles in May, reflecting deeper pace of mfg contraction
* US job openings unexpectedly rose in April:
How Long Will US Economic Resilience Last?
The warning signs continue to mount. Yet the US economy continues to defy expectations in some quarters that a recession is near. Granted, it’s arguably a precarious expansion that’s vulnerable on several fronts. But for the moment, in the face of seemingly overwhelming odds, a positive macro trend endures and that looks set to continue.
Macro Briefing: 31 May 2023
* House set to vote on debt-ceiling deal after it clears key committee
* China’s manufacturing sector contracts for second month in May via survey data
* Index funds have become tech-heavy growth funds
* Texas, a leader in wind energy, is turning against its green-energy industry
* Orders continue to slide for Texas manufacturing sector in May
* US home prices rise in March after falling for seven months
* US consumer confidence eases to 6-month low in May:
Debt-Ceiling Deal Faces Several Hurdles In Congress This Week
The agreement announced on Saturday by President Biden and House Speaker McCarthy that outlines a debt-ceiling deal may prove to be the easy part. The struggle to avert a US government default this week now turns to the tricky path of navigating the legislation through both houses of Congress.
Macro Briefing: 30 May 2023
* Biden and McCarthy look for votes to pass debt-ceiling bill
* Debt-ceiling deal, if passed, will be a new headwind for US economy
* Moscow attacked by drones as Russia bombs Ukraine capital for third day
* Nato troops injured in clashes with Serbs in Kosovo
* Biden and newly re-elected Turkish President talk F-16s, Sweden’s NATO bid
* N. Korea says it will launch satellites for real-time monitoring of US and allies
* China’s fading recovery highlights long-building economic risks
* Markets are downgrading expectations that a pause in rate hikes is near
* Small-cap stocks appear to be pricing in a recession:
Memorial Day 2023
Book Bits: 27 May 2023
Stephen D. King
Review via Financial Times
Economic history is rarely taught in universities these days. This is a pity, since it is a better guide to policymaking than Nobel Prize winning theses in economic theory. As a result, every two generations or so we are destined to repeat serious policy mistakes. In Britain the Truss government failed to study the Barber Boom of 1972-73 and arguably the world’s central banks too have failed to learn from the oil price shocks of 1973 and 1980.
Stephen D King’s highly readable and informative book provides a welcome antidote… King’s canter through 2,000 years of inflationary history — from Emperor Diocletian’s debasement of the coinage through to the Federal Reserve’s decision in 2021 to allow inflation to run at above the 2 per cent “central target” — is instructive. Money matters.
