Investing in just about anything other than US stocks has been a winning strategy this year. Using a set of ETF proxies shows that American shares are still the only source of red ink among the major asset classes year to date, based on trading through Mar. 19.
Author Archives: James Picerno
Macro Briefing: 20 March 2025
Federal Reserve keeps its target interest rate steady and lifts its forecast for US inflation and lowers growth estimate for 2025. Most Fed officials continue to expect that the central bank will lower interest rates this year, despite higher inflation expectations. In a press conference yesterday, Fed Chairman Powell said: “Inflation has started to move up now, we think, partly in response to tariffs, and there may be a delay in further progress in the course of this year.”
A Fed Rate Cut May Be Near, But Not Today
The surge in macro uncertainty related to tariffs, including the possibility of a global trade war, has complicated the Fed’s already difficult task of setting interest rates to accommodate an unknown future. The added complication of factoring in how White House policy will evolve, and how that will influence future inflation and economic activity, is about as challenging as it gets when the main tool is the blunt instrument of adjusting interest rates.
Macro Briefing: 19 March 2025
US housing starts rebounded in February, but newly issued building permits — a leading indicator for residential construction — eased for a second month and fell 6.8% vs. the year-ago level. “January’s dramatic drop in housing starts, largely driven by exceptionally cold weather, reversed in February, but a decline in housing permits tempered the optimism. Looming tariffs are creating considerable uncertainty about construction costs, limiting activity,” advises Bloomberg Economics.
US GDP Nowcast Remains Close To Stall-Speed Pace For Q1
The recent downshift in estimates for US economic output in the first quarter persists, based on the revised median nowcast for a set of analytics compiled by CapitalSpectator.com. The sluggish median estimate for next month’s release of the official Q1 GDP report suggests that the economy will continue growing in the first three months of 2025, but the slide in the past few weeks highlights an increased vulnerability in Q2 and beyond.
Macro Briefing: 18 March 2025
US retail sales rebound less than expected in Feburary. The 0.2% rise last month marks a modest recovery from January’s steep decline. “Not a great report, but one still in positive territory despite how pessimistic consumers are about the future,” said Robert Frick, corporate economist at Navy Federal Credit Union. “But the main factor in consumer spending is consumer income, and that’s growing at a good rate and had an impressive leap in January.”
Risk-On Sentiment Falters For Global Asset Allocation Strategies
The appetite for risk has taken a hit in recent weeks, although the worst of the selling has, so far, been contained to US stocks, on a year-to-date basis. The rest of the primary markets around the world, by contrast, are still posting gains so far in 2025, based on a set of ETFs through Friday’s close (Mar. 14). The relative strength in markets outside the US has helped global asset allocation strategies remain relatively resilient. But with the mood souring due to the rising risk of a global trade war, confidence about the near-term future is vulnerable.
Macro Briefing: 17 March 2025
US consumer sentiment continued to slide in March, based on the University of Michigan’s survey. This month’s decline was broad based across groups by age, education, income, wealth, geography and political affiliation. “Sentiment has now fallen for three consecutive months and is currently down 22% from December 2024,” the director for the survey writes. “While current economic conditions were little changed, expectations for the future deteriorated across multiple facets of the economy, including personal finances, labor markets, inflation, business conditions, and stock markets.”
Book Bits: 15 March 2025
● How Not To Invest: The ideas, numbers, and behaviors that destroy wealth – and how to avoid them
Barry Ritholtz
Interview with author via Prof G podcast
Barry Ritholtz, the co-founder, chairman, and chief investment officer of Ritholtz Wealth Management and the host of the Masters in Business podcast, joins Scott to discuss his new book, How Not to Invest: The Ideas, Numbers, and Behaviors that Destroy Wealth and How to Avoid Them. They unpack why diversification is both boring and sexy, whether the U.S. market is overvalued, and if the alternative investment industry is one of the biggest grifts in economic history.
Looking For Safe Havens During A Stock Market Correction
The US stock market fell on Thursday, Mar. 13, closing 10.1% below its previous peak – a decline that many analysts define as a “correction,” which is a slide ranging from 10% to 20%. A “bear market,” according to Wall Street-speak, arrives when a decline exceeds 20%. The “B” word doesn’t apply, at least not yet, but stocks are clearly on the defensive. Yet some corners of global markets are holding up if not rallying. Here’s a quick review that highlights a select list of recent winners, based on a set of ETFs through yesterday’s close.