Today’s updates on sentiment in the US services sector and the Federal Reserve’s Labor Market Conditions Index (LMCI) offer more evidence for arguing that economic growth is slowing in the third quarter. There’s still a solid pace of output in services, but LMCI confirms the weakening trend that’s conspicuous in Friday’s disappointing release on payrolls for September.
Continue reading →

The expected risk premium for the Global Market Index (GMI) dipped again in September. GMI — an unmanaged, market-value weighted mix of the major asset classes — is projected to earn an annualized 3.2% over the “risk-free” rate in the long term. (For details on the equilibrium-based methodology that’s used to generate the forecasts each month, see the summary below). Today’s updated estimate, which is based on data through the close of last month, decreased 20 basis points from last month’s update.
Continue reading →

DoubleLine Capital’s Jeffrey Gundlach says that it’s too early to start buying junk bonds. Although below-investment-grade fixed-income securities have been sliding for more than a year, the negative momentum may not be over yet, he explains. “I’ll think about buying when it stops going down every single day,” he tells Reuters.
Continue reading →

● US employment growth falls sharply in September | Reuters
● US factory orders slide 1.7% in August–the most in 8 mos. | USN&WR
● US dollar’s rise is weighing on US economy | NY Times
● Rising credit spreads cast a dark shadow over macro outlook | Economist
● Eurozon Composite PMI: growth slows in September | Markit
● Retail sales unchanged in Eurozone in August | RTT
● Eurozone investor confidence at 8-month low in October | RTT