Is the long-running drought in relative returns for foreign stocks vs. American shares starting to fade? It’s getting easier to consider the possibility as developed-markets equities ex-US continue to rise.
Monthly Archives: April 2023
Macro Briefing: 17 April 2023
* US and its allies grapple with how to reduce economic ties with China
* GOP House Speaker McCarthy set to recommend spending cuts on Wall Street
* Democratic senators favor forcing House vote on debt limit increase
* Banks may further tighten lending standards, says Treasury Sec. Yellen
* ECB to lift deposit rate to 3.75% peak in July, survey predicts
* ECB chief says she has ‘huge confidence’ that US won’t default on its debt
* Google reportedly developing AI-powered search engine to fend off rivals
* Big banks report surging revenue and profits for the first quarter
* US retail spending slump deepens in March:
Book Bits: 15 April 2023
Rob Verchick
Summary via publisher (Columbia U. Press)
One morning in Miami Beach, an unexpected guest showed up in a luxury condominium complex’s parking garage: an octopus. The image quickly went viral. But the octopus—and the combination of infrastructure quirks and climate impacts that left it stranded—is more than a funny meme. It’s a potent symbol of the disruptions that a changing climate has already brought to our doorsteps and the ways we will have to adjust. Rob Verchick examines how we can manage the risks that we can no longer avoid, laying out our options as we face climate breakdown. Although reducing carbon dioxide emissions is essential, we need to adapt to address the damage we have already caused. Verchick explores what resilience looks like on the ground, from early humans on the savannas to today’s shop owners and city planners.
10-Year US Treasury Yield ‘Fair Value’ Estimate: 14 April 2023
The 10-year Treasury rate continues to trade well above CapitalSpectator.com’s fair-value estimate, but the days of a large premium look numbered. As evidence mounts that inflation continues to ease, money supply remains sharply negative on a rolling one-year basis and the economy faces stronger headwinds, the odds are rising that the yawning gap between the current 10-year yield and our fair-value estimate will narrow.
Macro Briefing: 14 April 2023
* S&P 500 earnings for Q1 fell nearly 7%, according to estimates by FactSet
* Banks are now losing money on mortgages after sharp rise in interest rates
* China oil imports surge to highest level in nearly 3 years
* Senate Leader Schumer seeks regulations on artificial intelligence technology
* US jobless claims rose for first time in three weeks
* US wholesale prices fell in March, another sign of easing inflationary pressure:
US Consumer Inflation Trend Continues To Ease Through March
The Consumer Price Index eased more than expected in March, providing fresh evidence that pricing pressure has peaked and inflation remains on track to decelerate further in the months ahead. The core reading of CPI posted a firmer reading, but this looks like an outlier when viewed in context with a range of alternative inflation metrics.
Macro Briefing: 13 April 2023
* Rate hikes still needed, says San Francisco Fed President Mary Daly
* Fed expects a recession later this year, according minutes for March meeting
* US-Saudi oil pact breaking down as Russia influence in OPEC rises
* UK economy stagnates in February via GDP data
* China’s exports unexpectedly surge in March
* All but biggest banks face tough quarter for earnings reports
* Threat of war a factor for Buffett’s sale of shares in chipmaker giant TSMC
* US headline consumer inflation eases in March, but core trend ticks up:
Profiling Volatility Regimes For The US 10-Year Treasury Yield
Last month we looked at how stock market volatility ebbs and flows through time. Let’s pick up this thread and do the same for the bond market, based on the 10-year US Treasury yield.
Macro Briefing: 12 April 2023
* IMF warns of slowing growth and elevated recession risk
* France’s Macron’s comments on Taiwan bring sharp criticism in West
* Treasury Secretary says she’s “not anticipating a downturn” for US economy
* Fed officials divided over whether to hike rates again
* Fed rate hikes will end next month, predicts former Pimco chief economist
* EPA proposes rules that promote sales of electric vehicles
* Can AI beat the market? Don’t hold your breath
* US small business sentiment eased in March, holding below long-run average
* Tech stocks (XLK) are sharply outperforming broad market (SPY) this year:
US GDP Growth Nowcast Edges Higher For Upcoming Q1 Report
Recession forecasts for the US continue to swirl, but the risk still looks low from the perspective of expectations for the first-quarter GDP report that’s scheduled for April 27, when the Bureau of Economic Analysis will publish it’s preliminary report.