* “Economic chaos” awaits if Congress doesn’t raise debt ceiling
* Time is running short for Biden-McCarthy debt-ceiling talks
* China increases its gold reserves for a sixth straight month
* US payrolls rose more than expected in April
* US economic activity appears to be stabilizing at slow growth pace:
Martin S. Fridson
Summary via publisher (Wiley)
How well does it pay to own the Standard & Poor’s 500 Index’s best-performing stock of the year? Over the 2012-2021 period, the one-year total return ranged from 80% to 743%. This book identifies the quantitative and qualitative traits of stocks that made it to #1 and tells the stories of how they got there. A key indicator, the Fridson-Lee Statistic, makes its debut in these pages. Aiming for the massive upside of the #1 stocks entails substantial risk. It’s not something to do with more than a small percentage of your portfolio. But attempting to pick the coming year’s top performer can provide an outlet for speculative impulses that might otherwise spoil a prudent, long-term investment plan. And by investigating the statistically determined best candidates for #1, you’ll gain important insights into stock selection.
Trailing yields have increased for most of the major asset classes recently, based on a set of ETF proxies. The question is whether the relatively high payout rates offset concerns for the possibility of capital losses in the near term?
* Uncertainty hammers regional bank stocks as confidence wavers
* US Q2 GDP nowcast ramps up to solid +2.7% via Atlanta Fed’s GDPNow model
* Global manufacturing activity remained slightly negative in April
* German factory orders plunged in March
* Growth in China business activity eased in April via PMI survey data
* US jobless claims rose last week, but remain low by historical standards:
The Federal Reserve raised interest rates for a 10th straight time on Wednesday, lifting its target by a 1/4-point to a 5.0%-to-5.25% range, the highest since 2007. But there are hints that the central bank may be set to pause at the next policy meeting in June and start cutting later in the year. Much depends on how the economic and inflation data compare in the updates during the weeks and months ahead. But for now, the crowd thinks the rate-hiking cycle may have peaked.
* Federal Reserve raises its target rate 1/4-point to 5.0%-to-5.25% range
* Policy-sensitive 2-year Treasury slides after Fed hike
* PacWest Bancorp shares tumble; latest US bank to seek financial lifeline
* China manufacturing business conditions “moderate slightly in April”
* Eurozone economy in April grows at “strongest pace since May 2022”
* ISM Services Index ticks up in April, reflecting modest growth
* US hiring at companies rebounds sharply in April via ADP data:
Raising interest rates always comes with risk for the economy, but the stakes are higher than usual at a time when banking turmoil appears to be reviving. Nonetheless, markets are expecting that the central bank will again lift rates at today’s policy meeting.
* Federal Reserve expected to raise interest rates again at today’s policy meeting
* Rate hikes should be put on pause after this week, says former Fed vice chair
* Regional US bank shares drop sharply despite rescue of First Republic
* House Democrats unveil plan to force vote on lifting US debt limit
* Leaders of top AI companies to meet at White House today
* Gold price rebounds above $2000 an ounce
* US factory orders recovered in March, boosted by aircraft bookings
* US job openings fell again in March, contracting at a deeper annual rate:
The expected long-run return for the Global Market Index (GMI) ticked down to a 5.9% annualized pace in April, fractionally lower vs. last month’s estimate. The forecast, based on the average estimate for three models (defined below), is near the lower range for realized performance in recent history, based on a rolling 10-year return.
* US government could run out of cash by early June, advise Yellen and CBO
* IMF lifts growth outlook for Asia, citing China recovery
* Eurozone manufacturing activity falls in April–first decline since January
* Eurozone annual inflation in April ticks up for first time in six months
* Actively-run ETFs are a small niche but growing rapidly
* US construction spending rose in March, first gain in four months
* US ISM Mfg Index edges higher, which suggests sector recession is easing:
