Monthly Archives: November 2023

Macro Briefing: 20 November 2023

* Microsoft hires Sam Altman, ousted CEO of OpenAI, creator of ChatGPT
* Radical libertarian populist Javier Milei elected president of Argentina
* Positive earnings surprises have fueled stock market rally, says strategist
* Strong labor market is why US avoids recession after rate hikes
* Foreign demand for US Treasuries slides as supply rises
* US housing starts rise for second month in October
* OPEC+ considers further oil production cuts as price sags:

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Book Bits: 18 November 2023

Milton Friedman: The Last Conservative
Jennifer Burns
Review via The New Republic
Jennifer Burns’s biography of the economist Milton Friedman arrives at a moment when his legacy is increasingly questioned. For no one is more closely linked with neoliberalism than Friedman, who preached the virtues of markets in popular books, on public television, and from his position at the University of Chicago. One of Friedman’s major accomplishments, as Burns describes it, is to have crafted the “basic intellectual consensus about free markets and limited government that powered twentieth-century American conservatism.” For his admirers, Friedman was a farsighted prophet of market economics, a first-rate academic who saw that the world needed more capitalism, not less, to deliver global prosperity. For others, he represents the market fundamentalism that has allowed the wealthy to capture too great a share of the gains of global growth in the neoliberal era, and led to the financial crisis of 2008.

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Research Review | 17 November 2023 | Return Expectations

Causes of Deviations from a Real Earnings Yield Model of the Equity Premium
Austin Murphy and Zeina N. Alsalman (Oakland University)
October 2023
A market-based forecast of inflation added to equity earnings yields explains much of the variation in stock market returns over multi-year horizons. Return deviations from the prediction are found to be negatively related to the current inflation rate (output gap) over annual (all) horizons. Existing inflation is discovered to be positively (negatively) associated with future higher interest rates (real money supply and long-term profit growth). However, long-term inflationary expectations are positively correlated with long-term real future profit growth and stock returns. These results support the hypothesis of equity returns being positively (negatively) related to inflation (countercyclical anti-inflationary policies).

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Macro Briefing: 16 November 2023

* Five key takeaways from Biden-Xi meeting
* US will avoid gov’t shutdown as Senate sends funding bill to Biden
* Wholesale prices in US fell 0.5% in October–biggest drop since April 2020
* NY Fed Mfg Index: regional business activity grew “modestly” in November
* Business inflation expectations steady at 2.5% in November
* US retail sales fell in October–first monthly decline since March:

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Macro Briefing: 14 November 2023

* House to consider stopgap spending plan to avoid government shutdown
* US forces attacked four times in Syria since US military strikes on Sunday
* World economy will top expectations in 2024: Goldman Sachs
* Oil demand remains strong despite recent price weakness, says OPEC
* World oil supply growth is exceeding expectations: IEA
* Markets shrug at warning of ratings outlook downgrade for Treasurys
* Exxon plans to become major lithium supplier for electric vehicles
* UBS expects Fed rate cuts in 2024 as policy-sensitive 2-year yield eases recently:

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