Jobless claims fell last week to a level that’s close to a five-year low. As a bonus in today’s data dump, the government also revised second-quarter GDP growth higher by a healthy degree: 2.5% vs. the preliminary 1.7% estimate. Today’s newly minted Q2 estimate is also quite a bit stronger than Q1’s 1.1% gain. The overall message, of course, is that the economy remains on a moderate growth track, or so the latest reports imply. That’s been the message all along, albeit with fits and starts from time to time. The ongoing capacity for the bears of macro to consistently argue the opposite suggests a predilection to ignore the broad sweep of numbers.
Daily Archives: August 29, 2013
Emerging Markets, Mr. Market’s Asset Allocation, & The Year’s Big Lesson
Investors this year are receiving yet another lesson on risk, this time in connection with emerging markets, which have taken it on the chin so far in 2013. The MSCI Emerging Markets Index is lower this year by roughly 14% through yesterday (August 28) while US stocks (S&P 500) are up nearly 15% and foreign developed-market equities are higher by almost 7% on a year-to-date basis. The fact that some markets are down and others are up isn’t surprising, but the relatively wide spread in performance numbers this year offers another excuse to consider why beating an unmanaged, market-value-weighted portfolio of all the major asset classes is so tough for any length of time.