The premise of the momentum factor draws on an empirical fact: price trends persist… until they don’t. The latter point is the tricky part and so it’s never quite clear when the party will end and a trend reverses. But based on the numbers through yesterday’s close (Feb. 28), it’s fair to stay that the crowd’s appetite for risk endured for another month in February, extending 2024’s upbeat kick-off in January via a set of ETF pairs that serve as risk proxies. Trends have a shelf life, but it’s not yet obvious that the expiration date is today.
Monthly Archives: February 2024
Macro Briefing: 29 February 2024
* Congressional leaders reach tentative deal to avoid government shutdown
* Biden administration will investigate Chinese cars as security threat
* Rate cuts will likely start this year, says Boston Fed Bank President Collins
* Dept. of Justice launches antitrust probe into UnitedHealth Group
* Why is bitcoin surging again?
* US economic growth revised down slightly to still-solid 3.2% rise in Q4:
US Recession Risk Stays Low With Moderate Q1 Growth Nowcast
Recent US recession forecasts look set to fail again for the first-quarter economic profile, based on the current lineup of Q1 GDP nowcasts. Output remains on track to slow in the first three months of 2024, but not enough to revive the warnings from some analysts that a new downturn is near as a highly plausible scenario.
Macro Briefing: 28 February 2024
* China’s EVs are going global–and Detroit isn’t ready to compete
* Bitcoin tops $59,000, near a record high
* US home prices increased to record high in December
* US Consumer Confidence Index slips in February–first decline in 3 months
* US durable goods orders fell more than expected in January, but…
* Subset of new orders (a proxy for business investment) rebounded:
Communications, Health Sectors Lead Rally In US Stocks In 2024
The strong year-to-date gain in the US stock market is broad based, led by shares in communications services and health care, based on a set of sector ETFs through Monday’s close (Feb. 26). But the party has yet to spill over into utilities and real estate, which remain downside outliers this year.
Macro Briefing: 27 February 2024
* US government remains headed for partial shutdown on March 1, but…
* April 30 may be more consequential for government shutdown risk
* Fed wants more “certainty” on inflation before rate cuts: Moody’s Analytics’ Zandi
* Hedge funds turn cautious on outlook for tech stocks
* Texas factory activity stabilizes in February
* New US home sales edged higher for a second month in January:
Looking Ahead To US Economic Data For February
The Federal Reserve remains data dependent, as the central bank’s chairman Jerome Powell likes to say, and perhaps that’s especially true now as policy makers weigh the prospects for when (or if) to start cutting interest rates this year.
Macro Briefing: 26 February 2024
* Fed’s favorite inflation gauge expected to rise most in a year
* Business economists expect rate cuts starting in June: NABE survey
* Is rising US stock market a factor that will delay interest rate cuts?
* Key chip maker TSMC opens first plant in Japan
* Buffett’s Berkshire Hathaway reports strong rise in operating earnings, but…
* Berkshire’s size implies stock will only slightly outperform in years ahead: Buffett
Book Bits: 24 February 2024
● Taming the Octopus: The Long Battle for the Soul of the Corporation
Kyle Edward Williams
Review via The Wall Street Journal
The question of corporate purpose is central to Kyle Edward Williams’s “Taming the Octopus,” a history of efforts by American government officials and activists to rein in corporate power and even harness it to their favorite causes. These efforts are based on the idea that the limited-liability corporation, “its tentacles wrapped around the globe many times over,” ought to be accountable. But, as the author asks: “Accountable to whom or to what?”
Will AI Compensate For A Low Expected Equity Risk Premium?
The surge in demand for demand for Nvidia’s computer chips for artificial intelligence (AI) applications inspires some observers to claim that a new era for the economy is dawning. AI, runs the thinking among the most optimistic minds in this realm, will reorder and solve any number of issues on the macro front.