Kent Jones
Summary via publisher (Oxford U. Press)
Around the world, populism has weaponized anxieties over globalization and other forms of cultural, social, and economic change. Many populist leaders have succeeded in conflating trade concerns with apprehensions over immigration, thereby creating potent campaigns to overturn existing trade agreements and the multilateral cooperation they embody. In the United States, avowed protectionist Donald Trump set out not only to raise tariffs, but to dismantle the system of global trade embodied in the World Trade Organization. In the UK, the Brexit referendum resulted in that country’s withdrawal from the European Union, ending its commitment to trade integration with the continent.
The ETF Portfolio Strategist: 30 July 2021
- US Small-cap stocks rebound, but the outlook is still mixed
- US bonds continue to edge higher as interest rate slip further
- Equal-weight global asset allocation leads our strategy benchmarks this week—and this year!
Signs of life in small caps: For a second straight week, small-cap shares rallied. The iShares Core S&P Small-Cap ETF (IJR) rose 1.7% for the week (through July 30), posting the strongest gain for our standard global opportunity set.
Personal Income’s Weak Rebound Clouds US Economic Outlook
Economists are expecting another decline in today’s June report on US personal income. That’s worrisome because this key indicator has been a relative laggard vs. the strong rebounds in employment, consumer spending and industrial production – collectively known in some circles as the Big Four economic indicators that capture the core of US macro activity.
Macro Briefing: 30 July 2021
* The Delta variant is a headwind for the US economic outlook
* Eurozone economy rebounded in Q2 from recession
* West embraces industrial policies to counter China
* CRB Commodities Index rose to 6-year high in Thursday’s trading
* Amazon reports another revenue gain but rise was below expectations
* US jobless claims fell last week, near pandemic low
* US GDP rose less than forecast in Q2, but still beat Q1’s gain (just barely):
Political Risk Continues To Weigh On China Stocks
The rout in China equities accelerated in recent weeks amid Beijing’s increasingly aggressive regulatory crackdown on its domestic businesses. The market bounced in Thursday’s trading session (July 29) after diving earlier in the week, but on a year-to-date basis a deep shade of red ink prevails for the country’s stock market.
Macro Briefing: 29 July 2021
* Senate advances infrastructure bill with support of 17 Republicans
* Federal Reserve says economic recovery continues ‘making progress’
* China tries to calm fears on Wall Street after regulatory crackdown
* Eurozone economic confidence jumps to a record high in July
* Inflation has become a political weapon in Washington
* US gasoline price ticks up, close to seven-year high:
The ETF Portfolio Strategist: 28 July 2021
Equal weighting has its advantages — and disadvantages. Whether you should use this model-free, perfectly unbiased approach to portfolio design is debatable. But in the realm of benchmarking, there’s a strong case to adding it to the mix.
US Q2 GDP Estimate Slips Further, But Still Set For Strong Gain
Tomorrow’s release of second-quarter US economic data from the government is expected to show output grew at a stronger rate over Q1’s robust gain, based on a set of nowcasts. In line with recent updates, however, today’s estimate reflects another downside revision relative to previous Q2 nowcasts.
Macro Briefing: 28 July 2021
* IMF warns that higher inflation could be more than transitory
* Tapering timeline in focus in today’s press conference with Fed’s Powell
* Apple, Microsoft and Google report huge profits for Q2
* Is the sharp drop in China stocks a buying opportunity? Not yet, says UBS
* US durable goods orders continued increasing in June
* US Consumer Confidence Index ticked up in July to new pandemic high
* US house price increase continued to accelerate, breaking records in May:
Introducing The US Macro Trend Index
Goldman Sachs cut its forecast for US economic growth in this year’s second half, citing slower activity in the services sector and the potential headwind from the spread of the Covid-19 Delta variant. Managing growth expectations down aligns with a new metric developed by CapitalSpectator.com: the US Macro Trend Index (MTI).