It’s been a year of revival so far for the previously trailing small-cap value space in the US stock market. Deciding if the party can last may depend on how stocks overall fare in the months ahead and whether the consensus forecast for a strong economic recovery is accurate.
* Former police office Derek Chauvin convicted of murdering George Floyd
* S. Korea exports — proxy for the health of global commerce — surge in April
* Pandemic reshuffles ranking of world’s largest economies
* Supply-chain disruptions taking heavy toll on small businesses in US
* China’s digital currency is new tool for striking back at critics
* Twelve states urge Biden to phase out gas-powered vehicle sales by 2035
* Property management is hot as demand for vacation rentals surges
* Bubble indicator for S&P 500 looking frothy again:
The recent rise in Treasury yields is on hold for the moment. So is the normally shifting sands of trailing yields for the various components of the major asset classes, based on a set of exchange traded funds. You can still find yield premiums in risk assets compared with government securities. But we’re now in a world of pondering the potential for higher inflation and higher interest rates, which further complicates the always precarious search for higher payouts.
* China President Xi calls for fairer world order as tension with US rises
* US risks falling behind China on capitalizing on climate change, says Blinken
* Energy-related carbon emissions set to surge nearly 5% this year, predicts IEA
* Solving the global supply shortage of computer chips won’t be easy
* Wall Street sees central bank digital currencies as next big disruptive force
* If inflation rises, many investors are poorly prepared, says adviser
* US Dollar Index fell sharply on Monday, slumping to 2-1/2 month low:
* More than half US adults received at least one dose of a Covid-19 vaccine
* Arms race heating up on Korean peninsula
* Investors focus on inflation concerns as earnings reports roll in
* Can hiring keep up with the accelerating economic rebound?
* China’s central bank calls bitcoin an ‘investment alternative’
* Global consumers stockpile extra $5.4tn of savings during pandemic:
* New housing construction in US reached 15-year high in March
* US Consumer Sentiment Index rises to one-year high in April:
Keeping up with beta, much less beating it, isn’t getting any easier in 2021. That, at least, is the ongoing message in our trio of proprietary portfolio strategies that add various flavors of risk management to a game plan that targets a globally diversified set of assets.
● The Day the Markets Roared: How a 1982 Forecast Sparked a Global Bull Market
Interview with author via Politico
Henry Kaufman, nicknamed Dr. Doom during his 26 years at Salomon Brothers, has a new warning. In his latest book, ‘The Day the Markets Roared: How a 1982 Forecast Sparked a Global Bull Market,’ he argues the influence of central banks has increased to the point that it might present its own risk to the financial system.
‘We’re moving to an environment, which I call statism, in which the federal government and the Federal Reserve dominate the economic and financial system. And that, at times, used to occur in wars. Not in peacetime,’ Kaufman said in an interview.
In this issue:
- Rallies reach across the asset class spectrum this week
- Portfolio strategy benchmarks deliver another week of solid gains
The US economic outlook continues to improve for the upcoming first-quarter estimate of gross domestic product (GDP), based on a set of nowcasts. Compared with Q4’s solid increase, Q1 output is on track to show a substantially stronger gain in the scheduled Apr. 29 release from the Bureau of Economic Analysis.