The implied inflation forecast via Treasury yield spreads continues to creep higher, but today’s November report on consumer prices is expected to reaffirm that pricing pressure remains muted. With the US suffering another coronavirus wave, the odds remain low that inflation will accelerate sharply in the near term. But a vaccine rollout is close and the economy will likely strengthen in 2021. Combine that with the incoming Biden administration, which will be incentivized to juice animal spirits, and the groundwork appears to be set for firmer prices generally.
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Monthly Archives: December 2020
Macro Briefing: 10 December 2020
* Pfizer vaccine faces one last hurdle before US rollout
* House votes to fund government for a week as shutdown looms
* Covid-19 relief legislation force Facebook to sell Instagram and WhatsApp
* Covid-19 surge strikes South Korea and Japan
* Fitch raises growth outlook for China to 8% for 2021
* UK economy slowed to a crawl in October
* NY state’s pension fund will divest from fossil fuels
* Gold will suffer because of rising demand for bitcoin, JP Morgan predicts
* US job openings beat expectations with a modest increase in October
Weak Dollar Supports Foreign Bond Returns For US Investors
The decline of the US dollar this year has been a bullish force for American investors holding foreign bond funds. The sliding value of the world’s reserve currency is helping offset low and zero yields with capital appreciation.
Macro Briefing: 9 December 2020
* White House proposes $916 billion Covid-19 relief bill to Democrats
* US Covid-19 deaths rise to record
* Supreme Court denies Republican challenge to block vote for Biden in PA
* House passes veto-proof defense bill
* Deflation returns to China’s consumer prices for first time in 11 years
* JP Morgan expects rising demand and falling supply for equities in 2021
* US small business optimism slipped to 3-month low in November
Moderate Growth Outlook Holds For US GDP In Q4
As Covid-19 vaccines start to rollout in the West, the prospect of economic recovery strengthens. Many risks continue to lurk, of course, but for the first time since the pandemic started there are tangible signs of light at the end of the tunnel.
Macro Briefing: 8 December 2020
* Stimulus bill at risk as McConnell focuses on alternative plan
* Most of California goes into lockdown to combat Covid-19’s spread
* 90-year-old woman in UK is first to receive Pfizer vaccine outside trial
* Retired Army Gen. Lloyd Austin reportedly chosen as next Sec. of Defense
* Florida police raid home of former state Covid-19 data scientist
* UK Prime Minister Johnson aims for last-ditch effort to salvage Brexit deal
* Goldman Sachs will acquire 100% of securities joint venture in China
* German investor sentiment rises sharply in December on vaccine outlook
* Eurozone GDP for Q3 revised slightly lower
* US consumer-credit growth slowed in Oct
* US 10yr-3mo Treasury yield curve holds near highest level since March:
Global Rally In Risk Assets Continued Last Week
The recent bull run in the major asset classes continued last week as foreign high-yield bonds and US real estate investment trusts (REITs) shared first place for performance, based on a set of exchange traded funds for the five trading days through Friday’s close (Dec. 4).
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Macro Briefing: 7 December 2020
* Details on pandemic relief package expected from negotiators today
* Biden picks California Attorney General Xavier Becerra for top US health post
* China’s trade surplus widened to a record in November
* Sterling’s losses against US dollar continue as Brexit talks founder
* Car sales drive German industrial output sharply higher in October
* Slowdown in US payrolls threatens economic recovery
* US Treasury market’s implied inflation forecast rises to highest since May 2019:
Book Bits: 5 December 2020
Jason Hickel
Review via Commonweal Magazine
In his recent book, Less is More: How Degrowth Will Save the World, the anthropologist Jason Hickel attempts to translate the main arguments of degrowthers into an accessible manifesto. He insists both that continued global expansion is incompatible with human and ecological flourishing, and that a future beyond growth need not be an austere one. Abundance can persist long after growth ends.
The ETF Portfolio Strategist: 4 Dec 2020
Bullish Momentum Accelerates For Latin America Equities: Stocks listed across Mexico and South America are on a tear. Although this slice of global equities remains the only major region still nursing year-to-date losses, recent history is another story as the upside run for iShares Latin America 40 (ILF) continues pick up speed.